You are previewing The Tech Entrepreneur's Survival Guide: How to Bootstrap Your Startup, Lead Through Tough Times, and Cash In for Success.
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The Tech Entrepreneur's Survival Guide: How to Bootstrap Your Startup, Lead Through Tough Times, and Cash In for Success

Book Description

Most technology startups never make it to the funding stage, and only a small percentage of those that are venture-backed generate a positive return for their investors. An even smaller number of startup founders 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, Bernd shares what he learned and what he wished he knew at the time. He explains the major phases in a technology company'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, including the 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

  1. Cover
  2. Title Page
  3. Copyright Page
  4. Dedication
  5. Contents
  6. Acknowledgments
  7. 1: The Entrepreneurial Dream
  8. PART I: BOOTSTRAPPING: VENTURE CREATION OUT OF THIN AIR
    1. 2: Should I or Should I Not Venture into Entrepreneurship?
      1. Timing
      2. Career Planning
      3. Money, Uncertainty, and What Really Matters
      4. When Is Enough, Enough?
      5. Don’t Lose Sight of the Big Picture: It’s Your Life!
    2. 3: Startup Assets
      1. Ideas
      2. Early Customers
      3. Patents and Offensive IP Strategies
      4. Defensive IP Strategies
      5. Copyrights, Trade Secrets, and Know-How
      6. What to Pack in Your Bag
    3. 4: Cofounders
      1. Attitudes
      2. Skills and Roles
      3. Immigrant Founders
      4. Together We Will Prevail
    4. 5: Early Funding
      1. Revenue, the Best Source of Funding There Is
      2. Incubators and Accelerators
      3. Angels
      4. Free Money, Courtesy of Your Government
      5. Banks and Loans
      6. Crowdfunding
      7. Creative Money
    5. 6: Administration
      1. Legal Representation
      2. Corporate Form
      3. Corporate Compliance
      4. Bookkeeping and Taxes
      5. Payroll and Mandatory Benefits
      6. Insurance
      7. Office Space
      8. Housekeeping
    6. 7: Compensation
      1. Equity: A Startup’s Most Important Currency, but What Is the Exchange Rate?
      2. Vesting, Cliff Vesting, and Accelerated Vesting
      3. Cash and Benefits
      4. Deferred Compensation
      5. Compensation Packages
      6. Let There Be Justice, if You Can Afford It
  9. PART II: EQUITY FUNDING: A DOUBLE-EDGED SWORD
    1. 8: Venture Deals
      1. Understanding Private Equity and Venture Capital
      2. Which Firms to Seek Out
      3. Term Sheets
      4. Liquidation Preferences: The Biggest Nuisance of Them All
      5. Due Diligence and Closing
      6. Taking a Bite from the Apple
    2. 9: Raising a Down-Round
      1. Going Back to the Well
      2. B, C, D, E, F . . . Rounds
      3. Strategic Investors
      4. When Things Get Really Desperate
    3. 10: Right-Sizing
      1. Firing for Nonperformance
      2. Reduction in Force
      3. Showing Executives the Door
      4. It’s Not Your Fault
  10. PART III: EXIT: SELLING YOUR BABY
    1. 11: Startup Dynamics in Crisis
      1. Tired Founders
      2. Impatient Investors
      3. When to Sell?
      4. Never, Ever Give Up!
    2. 12: Exit Strategies
      1. Hiring an Investment Banker
      2. Poor (Unprofitable), but Pretty!
      3. Financial Valuation
      4. Protecting the Team
      5. All’s Well That Ends Well
    3. 13: Corporate Life
      1. Acquisition Philosophies
      2. Living Up to One’s Own Promises
      3. Before You Start All Over Again
  11. Notes
  12. Index