Questions to ask yourself when planning a startup and thinking of seed funding
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This is a guest post by Anthony Mitchell, InternationalStaff.net (http://internationalstaff.net)
What questions should high-tech entrepreneurs be asking themselves as they plan a new enterprise?
What questions will seed-fund managers ask applicants for funding?
Borrowing from the open-source software movement, a new seed-stage investment fund in Seattle has published a questionnaire that they use to create a level playing field among applicants for funding.
The questionnaire suggests a thought process that entrepreneurs can reference to help structure their business ideas before deciding whether or how to move forward.
This new investment fund is called the Founders Co-op (http://www.founderscoop.com/). Its limited partners include many of the Seattle-based heavy-hitters in early stage investing, especially online ventures.
The Founders Co-op is part of the new movement in early stage investing that sees companies being launched with little or no staff outside of the founders (and their outsourcing or vendor connections). It is anticipated that the entrepreneurs to be funded will usually consist only of the techies who are actively engaged in product development.
Because the cost of launching online ventures has dropped in recent years, many of these ventures will never need traditional sources of venture capital, only early stage funding. The questionnaire is consistent with this new style of streamlined entrepreneurialism that is well suited for both Pakistan and the U.S.
In their questionnaire, the Founders Co-op asks that each question be answered in 120 words or less and that the questions not be edited. The Founders Co-op credits Y Combinator (http://ycombinator.com/) for help with ideas on the open application process.
Although the Founders Co-op has not expressed an intention to fund startups outside of the U.S., their questionnaire is relevant for startups in Pakistan.
Here is their questionnaire:
1. Please list your company’s name, URL (if any) and phone number (preferably cell).
2. What does your company do?
3. What’s new about what you’re doing?
4. What do you understand about your business that other companies don’t?
5. How will you acquire customers?
6. How will you make money?
7. Who are your competitors, and who might become competitors?
8. If your project is software, what development stack will you use?
9. If you’ve already started working on it, how long have you been at it?
10. If you have an online demo, what’s the URL?
11. How long will it take before you have a prototype? A beta? A version you can charge for?
12. Why would your idea be hard for someone else to duplicate?
13. What are the biggest unknowns or risks in your idea (what keeps you up at night)?
14. For each founder, please list: name, age, school, degree, email address, personal URL (if any); and present employer and title (if any)
15. What products or companies have any of you built before? (Include URLs if possible)
16. How long have the founders known one another and how did you meet?
17. If you’re already incorporated, when were you? Who are the shareholders and what percent does each own?
18. If you’ve previously received funding, how much did you take and at what valuation(s)?
19. If you’re not incorporated yet, please list the percent of the company you plan to give each founder, and to anyone else (advisors, etc.).
20. If you expect to have any major expenses beyond salary, hosting and development tools, what will they be?
21. How long do you expect to work on this idea?
22. Do any founders have other commitments for the next 12 months?
23. Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project?
24. Was any of your code written by someone who is not one of your founders? If so, do you have the right to use it? (Open source is OK)
25. Please share one personal fact about each founder that helps us understand who you are as a person.
9:04 am
Absolutely brilliant questionnaire!
Thanks for sharing.
9:19 am
Thanks.
4:34 pm
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