Miscellaneous Mint Case Supplement (LTV, Tuesday, Week 3 [Bonus!])
launching-technology-venturesyear-twoSuper-useful discussion of nuts and bolts of early-stage venture, by Mint founder Aaron Patzer (introduced by Adeo Ressi!): http://www.youtube.com/watch?v=cRfV0YfvDP4
Some notes:
Phase 1 = Garage (<$100K) Goal is to build a prototype. Pre-revenue valuation = +500K/engineer -250K/biz guy - Takeaway: need someone to write code; need to build! Really? Engineers building for first year; biz people "relatively idle" First engineer/contractor got 2% equity. $400/cube/mo. Phase 2 = Seed (<$1M) 5-6 ppl. 3-4 engineers, 1 product/frontend, 1 biz generalist burn = 600K/yr Legal fees on 700K will be 20-30K. Unit economics matter more than forecasts when raising A; everyone says they'll be huge. Mint's Projections from Lead-Gen & CPA during seed pitches = exactly right; even now. $30/user/year. Build up your pitch from chronological sequence of what a user does on your site. Phase 3 = Series A (>$1M)
Burn = $6M/year
Need to be profitable within 2 years (or at least not growing too fast)