The Tech Entrepreneur's Survival Guide: How to Bootstrap Your Startup, Lead Through Tough Times, and Cash In for Success by Schoner, Bernd;

Short description:

The tools and insight entrepreneurs need to defy the odds and build a profitable tech startup

Long description:

Most technology startups never make it to the fundingstage, and only a small percentage of those that are venture-backed generate a positive return for their investors. An even smaller number of startupfounders enjoy a truly prosperous exit.

Bernd Schoner cofounded his tech startup during the dot-com bust, navigated it through market crises and internal turmoil, brought it through the global financial meltdown intact, and eventually sold it to a multibillion-dollar, multinational public technology company.

In The Tech Entrepreneur's Survival Guide, Berndshares what he learned and what he wished he knew at the time. He explains the major phases in a technologycompany's life cycle, helping entrepreneurs avoid common pitfalls and survive crises when they strike. He guides readers from the initial bootstrapping process through venture-capital financing and provides valuable advice on how to sell a technology company profitably--even in a challenging economic environment. Every chapter presents solutions to realworld issues that could otherwise have fatal consequences for a tech venture.

Aspiring tech entrepreneurs will learn to:

• Set up shop: build the team, assemble necessary startup assets (including technology and intellectual property), get legal and financial affairs in order
• Secure capital: ask for money, nail the term sheet, ask for more money
• Get out: know when to sell, who to sell to, and how to make it a happy exit for all stakeholders, includingthe employees

Written with deep insight, refreshing candor, and a dash of humor, this comprehensive guide to the often harsh realities of startup life is indispensable for entrepreneurs at any stage.

PRAISE FOR THE TECH ENTREPRENEUR'S SURVIVAL GUIDE:

"A genuine narrative from the field, with battle scars and self-reflection. Reading this book will help you avoid many pitfalls." -- Nicholas Negroponte, professor at the Massachusetts Institute of Technology Media Lab

"There's a lot of great insights and practical advice for the entrepreneur in this book, stuff you normally won't read or hear unless you buy some hard-bitten company founder a few drinks. If you are launching a technology startup, reading this book is the thing you should do first." -- Mark Roberti, founder and editor in chief of RFID Journal

"I wish I had read Bernd's book when we founded The Echo Nest. Bernd touches on all the major issues in the initial formation stages of a tech company and many of the problems that come up when the company matures. If you are thinking of founding your own tech startup, read this book first." -- Tristan Jehan, cofounder of The Echo Nest

"A visceral, behind-the-scenes guide to technology entrepreneurship. Bernd tells it like it is and presents a universe of solutions to tricky startup situations that can significantly improve the odds of success. Indispensable." -- Larry Begley, cofounder and managing director at .406 Ventures

"The best-laid business plans never survive contact with reality. Bernd has provided a comprehensive guide to anticipating the unexpected in the life of a startup." -- Neil Gershenfeld, professor and director of the Massachusetts Institute of Technology Center for Bits and Atoms

Most technology startups never make it to the fundingstage, and only a small percentage of those that are venture-backed generate a positive return for their investors. An even smaller number of startupfounders enjoy a truly prosperous exit.

Bernd Schoner cofounded his tech startup during the dot-com bust, navigated it through market crises and internal turmoil, brought it through the global financial meltdown intact, and eventually sold it to a multibillion-dollar, multinational public technology company.

In The Tech Entrepreneur's Survival Guide, Berndshares what he learned and what he wished he knew at the time. He explains the major phases in a technologycompany's life cycle, helping entrepreneurs avoid common pitfalls and survive crises when they strike. He guides readers from the initial bootstrapping process through venture-capital financing and provides valuable advice on how to sell a technology company profitably--even in a challenging economic environment. Every chapter presents solutions to realworld issues that could otherwise have fatal consequences for a tech venture.

Aspiring tech entrepreneurs will learn to:

• Set up shop: build the team, assemble necessary startup assets (including technology and intellectual property), get legal and financial affairs in order
• Secure capital: ask for money, nail the term sheet, ask for more money
• Get out: know when to sell, who to sell to, and how to make it a happy exit for all stakeholders, includingthe employees

Written with deep insight, refreshing candor, and a dash of humor, this comprehensive guide to the often harsh realities of startup life is indispensable for entrepreneurs at any stage.

PRAISE FOR THE TECH ENTREPRENEUR'S SURVIVAL GUIDE:

"A genuine narrative from the field, with battle scars and self-reflection. Reading this book will help you avoid many pitfalls." -- Nicholas Negroponte, professor at the Massachusetts Institute of Technology Media Lab

"There's a lot of great insights and practical advice for the entrepreneur in this book, stuff you normally won't read or hear unless you buy some hard-bitten company founder a few drinks. If you are launching a technology startup, reading this book is the thing you should do first." -- Mark Roberti, founder and editor in chief of RFID Journal

"I wish I had read Bernd's book when we founded The Echo Nest. Bernd touches on all the major issues in the initial formation stages of a tech company and many of the problems that come up when the company matures. If you are thinking of founding your own tech startup, read this book first." -- Tristan Jehan, cofounder of The Echo Nest

"A visceral, behind-the-scenes guide to technology entrepreneurship. Bernd tells it like it is and presents a universe of solutions to tricky startup situations that can significantly improve the odds of success. Indispensable." -- Larry Begley, cofounder and managing director at .406 Ventures

"The best-laid business plans never survive contact with reality. Bernd has provided a comprehensive guide to anticipating the unexpected in the life of a startup." -- Neil Gershenfeld, professor and director of the Massachusetts Institute of Technology Center for Bits and Atoms

Table of Contents:

Acknowledgments ix
1 The Entrepreneurial Dream 1
PART I
BOOTSTRAPPING:VENTURE CREATION OUT OF THIN AIR
2 Should I or Should I Not Venture intoEntrepreneurship? 13
Timing 14
Career Planning 17
Money, Uncertainty, and What Really Matters 22
When Is Enough, Enough? 25
Don?t Lose Sight of the Big Picture: It?s Your Life! 27
3 Startup Assets 29
Ideas 30
Early Customers 32
Patents and Offensive IP Strategies 34
Defensive IP Strategies 41
Copyrights, Trade Secrets, and Know-How 44
What to Pack in Your Bag 49
Cofounders 51
Attitudes 52
Skills and Roles 54
Immigrant Founders 60
Together We Will Prevail 67
5 Early Funding 69
Revenue, the Best Source of Funding There Is 70
Incubators and Accelerators 74
Angels 76
Free Money, Courtesy of Your Government 78
Banks and Loans 84
Crowdfunding 87
Creative Money 90
6 Administration 91
Legal Representation 91
Corporate Form 94
Corporate Compliance 103
Bookkeeping and Taxes 107
Payroll and Mandatory Benefits 108
Insurance 110
Office Space 112
Housekeeping 117
7 Compensation 119
Equity: A Startup?s Most Important Currency,but What Is the Exchange Rate? 119
Vesting, Cliff Vesting, and Accelerated Vesting 126
Cash and Benefits 130
Deferred Compensation 135
Compensation Packages 138
Let There Be Justice, if You Can Afford It 147
PART II
EQUITY FUNDING:A DOUBLE-EDGED SWORD
8 Venture Deals 151
Understanding Private Equity andVenture Capital 152
Which Firms to Seek Out 153
Term Sheets 157
Liquidation Preferences: The BiggestNuisance of Them All 166
Due Diligence and Closing 171
Taking a Bite from the Apple 177
9 Raising a Down-Round 179
Going Back to the Well 180
B, C, D, E, F . . . Rounds 185
Strategic Investors 189
When Things Get Really Desperate 195
10 Right-Sizing 197
Firing for Nonperformance 198
Reduction in Force 199
Showing Executives the Door 205
It?s Not Your Fault 209
PART III
EXIT:SELLING YOUR BABY
11 Startup Dynamics in Crisis 213
Tired Founders 213
Impatient Investors 216
When to Sell? 220
Never, Ever Give Up! 227
12 Exit Strategies 229
Hiring an Investment Banker 229
Poor (Unprofitable), but Pretty! 232
Financial Valuation 238
Protecting the Team 245
All?s Well That Ends Well 251
13 Corporate Life 253
Acquisition Philosophies 253
Living Up to One?s Own Promises 257
Before You Start All Over Again 261
Notes 263
Index 265