A 90-minute introductory discussion on what it is like starting a company that will go through the venture funding process.

1. Startups 101
Mark Hary - Executive in Residence
Vonzos Partners (www.vonzos.com)
https://slideshare.net/MarkHary
https://linkedin.com/in/markhary
https://medium.com/@mark.hary
https://markhary.github.io
Twitter: @hary_mark

2. Activity
1. Break into groups of 5 where you know the least amount of people
2. Tell the group your name and birthday
3. Last person to have birthday in calendar year is spokesperson
4. Everybody state one thing that they hope to get out of this talk so
that they consider it an excellent use of their time
5. Sit on it - at the end - we will go through what I did not address in
round-robin/panel fashion

3. Overview
How to eat an elephant...
Starting a Company: What to Expect
Transforming Idea into an Asset
Product
Market
Go To Market Strategy
Product Market Fit
How to Acquire First Customers
How to Grow & Scale
When/How to Approach Investors

4. My Journey
De Anza College
BS Mechanical Engineering, Santa Clara University
MS Aero/Astro, Stanford University
2000 - Co-founded
Sensing Systems
2011 - 2d3
acquires Sensing
2015 - Boeing
acquires 2d3 Sensing
2016 - Angel investor
2019 - EIR
@ Vonzos

5. Starting a Company:
What to Expect
“Everybody fights, no one quits”
- Johnny Rico, Rico’s Roughnecks
Starship Troopers
Buckets of blood, sweat, and tears
Ability to argue passionately but
commit to solidarity
Make your own luck
Persistence and determination
Prioritization and work/life balance

6. idea <<< product < business < asset
Idea = $0.10 / 12
Product = Customers want it
Business = Customers pay for it
Asset = Your property that has value
Transforming an
Idea into an Asset1
Value
Asset
Business
Product
Idea
$0
1https://medium.com/@mark.hary/transforming-an-idea-into-an-asset-d2facd7e24f5

7. Defensible IP
● What keeps somebody else from
copying you?
● Otherwise
○ First mover advantage
○ Fastest mover advantage
○ Technical superiority
Innovative
● Why isn’t someone already doing this,
or if so, who are your competitors, and
what is your competitive advantage?
● Solve a real problem of real customers
who are willing to spend real money for
your solution.
Product
Muiderslot Castle in Holland

8. Market
TAM: Total Available Market
SAM: Serviceable Available Market
SOM: Serviceable and Obtainable Market
Looking for $1B TAM minimum
TAM
SAM
SOM
Example: Restaurant (e.g. McDonald’s)
TAM: People who eat
SAM: People who have money
SOM: People within driving distance

9. Go To Market Strategy
LTV CACt
# Customers
Enterprise
Channel
Inbound
Outbound
You told us about the market…
You told us about the product…
How will you connect them?
The road to $100M ARR and your asset
100 → 1k → 10k → 100k → 1M

10. Product Market Fit
1. Establish Need, Schedule, Budget
2. SaaS Metrics 2.0 - David Skok1
Terms You Should Know
● Monthly Recurring Revenue (MRR)
● Customer Acquisition Cost (CAC)
CAC = ($ spend)/# customers
● Lifetime Value (LTV)
LTV = MRR * months
● Months to Recover CAC (MtRC)
MtRC = CAC / MRR
● LTV:CAC
● Churn = ΔCustomers/Customers
Characteristics of strong PMF:
● # customers increase w/out spend
● CAC =~ $0
● LTV = high
● MtRC << 18
● LTV:CAC >> 3
● Churn = 0
Need Schedule
Budget
1 https://www.forentrepreneurs.com/saas-metrics-2/

11. How to Acquire
First Customers
Pro tips:
● Technical and business domain expertise is
useful
○ How do you know product is needed?
○ How do you know how people spend money?
● Develop a set of user stories
○ What are they doing?
○ How do they do it now?
○ What is painful about it?
○ How does this alleviate pain?
● A customer has need, schedule, budget
● Spread the word
○ Viral marketing/word of mouth is free
○ CPC is expensive
● Pick right GTM strategy1,2
1https://www.advanceb2b.com/thegrowthhub/the-mission-matrix-
saas-go-to-market-strategy
2https://medium.com/@mark.haryIt’s EASY!!! Do something!!
South Park S02E17

12. How to Grow & Scale
● Asset = Func{Business[Product(Idea)]}
● Just do it. When in doubt, do. Fail fast.
● Data-driven decision making from inception
○ MAU/DAU, Churn, # customers, CAC,
LTV:CAC
○ Make decisions to impact metrics; do A/B
testing; figure out what works and adjust
quickly
● Grow revenue: inbound, outbound, channel,
enterprise sales
● Be profitable1
● Trade discount for cash up-front, invest back
in customer acquisition
Beware opportunity cost
1https://slidebean.com/blog/startups/slidebean-profitable
Organic Growth vs. Venture Growth
The Tradeoff is Who Gets a Vote

13. When to Approach
Investors
Don’t Forget Corporate Venture Capital
(Strategic Investment Groups)
Parul Singh. FounderCollective. Sep 25, 2018.
“https://medium.com/swlh/raising-seed-capital-heres-your-2018-guide-
on-how-to-do-it-successfully-c73c42530598”

14. How to Approach Investors
Approach seeking funding the exact same way you approach
building a sales pipeline:
● Warm >>> cold
● Research your targets (entity & individuals) by expertise, focus, and stage
● Get introduction through your networks, double opt-in best
● Have concise pitch ready (30-3-30 rule) w/ ask
● ⭐ Work w/ an EIR ⭐
Need network? Target incubators, accelerators, pitch days, labs,
bootcamps, strategic investment arms/corporate VC, and trade shows.
Investors frighten easily, do not stalk or surprise your prey.

15. Thank You
1. Reconvene groups
2. Revise questions if you’d like
Rapid fire - 1 min!