Author: Gordon Daugherty

startup compensation

Founder & Early Employee Compensation

In the earliest days of a startup venture, there are no published compensation rates or even good studies to use as guidance.  That’s because each company and founder situation is…

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convertible note

Setting the Max Authorized Amount on Your Convertible Note

Let’s assume you have already determined $500K is the ideal amount of money to raise in your current fundraising round (see related article titled “How Much Should You Raise”) and…

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sales compensation

Documenting Your Sales Compensation Plan

I can’t tell you how many startups go through the effort to think through the best method to compensate their sales team but don’t take the next step to document…

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stock pricing

Pricing Your Stock in the Early Days

I get the following question all the time from US-based startups: how should we price our individual units of equity? (shares of stock for C-corps; units for LLC’s)  It’s a…

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legal costs

10 Tips for Controlling Legal Costs

It’s amazing how quickly legal costs can add up. If you’re running a startup, it’s possible that your legal costs are second or third highest amongst all of your expenses....

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convertible note extension

Extending Your Convertible Note

You didn’t plan for it to happen this way but you’re reaching the maturity date (end of term) on your convertible note and didn’t raise money in an equity round…

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cool code names

Cool Code Names

How cool is it to use a code name for an important project rather than “version 2.5” or “next gen”?  Same for a company acquisition or game-changing strategic initiative that…

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product roadmap

Prioritizing Your Product Roadmap

If you already have an experienced product manager on your team, they are probably/hopefully following some well-established product management process. But what about the early days of company formation before…

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When Offered Help, Be Ready

Throughout your startup’s evolution you’ll find that you do a lot of networking with others that can potentially help you.  This includes potential business partners, employees, advisors, angel investors and VC’s.  Regardless…

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Visualizing the Interactions Between CAC, Churn and LTV

Visualizing the Interactions Between CAC, Churn and LTV

Anyone that has taken an accounting class or learned basic business financials knows the interaction between key elements of a P&L (revenue, cost, expense) and a balance sheet (assets, liabilities,…

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startup focus

Tools for Maintaining Focus

Regardless of a company’s size and stage, maintaining focus is often a critical success factor.  This doesn’t suggest nimbleness and flexibility are bad.  Quite the opposite, as focus and flexibility…

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sales commission compensation plan

A Variant of the Straight Line Sales Commission Plan

In the spirit of keeping a sales commission plan simple, many sales executives choose to use a simple straight-line methodology.  In other words, 88% achievement of the sales goal equates…

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startup mistakes

Absolute Versus Relative Sales Commission Plans

Compensating a sales team is a tricky and sensitive endeavor that requires a lot of advanced planning.  I previously wrote about my 5 Golden Rules of Sales Compensation.  But even if…

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MBO bonus plan

MBOs Demystified

“Show me the incentive and I’ll show you the outcome” is a quote from Charlie Munger often used to describe the direct relationship between special compensation and behavior. Certain roles…

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exit strategy

Answering the “Exit Strategy” Question

You’ve just completed a great investor pitch with heads nodding and good interaction.  You’re about to ask “Does this opportunity interest you enough to explore an investment?” when instead you get…

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competitive positioning

Comparing Yourself Publicly to the Market Leader

Market leaders almost never compare themselves to competitors publicly because it gives their competitors legitimacy and potentially shows nervousness about them.  But what if you’re #3, #5 or lower in…

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The “Yeah, Right” Rule

Similar to the “So What” rule, every time you make a claim, prediction or forecast, imagine your audience is thinking to themselves “yeah, right!” in skeptical fashion immediately after seeing/hearing your…

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comparing SAFE to convertible note

Comparing the SAFE to Convertible Notes

Initially made available by Y Combinator (YC) in 2013 and subsequently updated in late 2018, the SAFE investment instrument was intended to improve on the highly popular convertible note used…

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trial conversions

Optimize Free Trial Conversions via Nurturing

Are you a SaaS company that has an icon like this on your website to promote a free trial offer to interested prospects?  If so, once they start the free trial do…

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establishing valuation

Establishing Valuation Before Revenue Traction

Once you have a product in the market with an increasing number of paying customers, your valuation will increasingly be driven based on financial and operational metrics.  Don’t get me…

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acquisition LOI

Revealing Excessive Info Before Getting an Acquisition LOI

When an interested acquirer approaches you, they will naturally ask for as much information as you are willing to give them.  But how much and what type of information should…

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competitive positioning

An Unfair Advantage All Startups Have Against Big Companies

It’s not innovation or company culture or a determination to win.  Those are all important but successful big companies have at least some of those things too.  Startups often have…

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choosing a startup advisor

Selecting an Advisor

The title of this article suggests you’ve already decided that you need one or more advisors.  But spend time with your co-founders discussing this to make sure you agree it…

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startup advisor compensation

Compensating an Advisor

How much equity should you give to compensate an advisor?  Should the shares carry any special provisions like anti-dilution or change-of-control acceleration?  What about giving the advisor cash compensation?  Tough…

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advisor value

Maximizing Value From Your Advisor

Startups commonly give 0.5% equity or more to attract an experienced advisor (see related article titled “Compensating an Advisor”).  Sometimes after a few months they find themselves wondering if they…

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Da Vinci – Simplicity

“Simplicity is the ultimate sophistication” – Leonardo da Vinci

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elevator pitch

Your Elevator Pitch Only Needs to Accomplish One Thing

There’s a reason it’s referred to as an “elevator pitch” – it must be expressed in a few sentences and no more than 15-20 seconds.  And that might even be…

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Unknown – Preparation

"Measure twice, cut once" - Unknown (English proverb) - H. Ross Perot (US Presidential debate, Oct 1992) - C. Gordon Daugherty III, M.D.

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investor research criteria

Investors’ Research Varies Widely Before Making a Decision

Each individual investor and venture fund is different in the way they like to interact during their investment evaluation. This difference is pronounced amongst angel investors and less so for…

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strategic partnership

Get the Strategic Partner to Come After You

The courtship almost always starts with the small company approaching the HQ of the big company they desire as a strategic partner.  Usually, the big company is too distracted or…

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Keller – A Turn in the Road

"A bend in the road is not the end of the road . . . unless you fail to make the turn." -- Helen Keller

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improving webinar attendance

Increasing Webinar Attendance

Business prospects are now accustomed to taking themselves through 60% of the sales journey (see related article titled “Prospects Take Themselves Through 60% of the Sales Journey“) but at some point…

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setting strategy

Try Strategy Horizons Versus a Timeline

Here’s the scenario.  You’ve got people asking you to express your strategy as a set of milestones extending through a certain amount of time.  This puts you in the mindset…

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Don’t Be Afraid of Exclusivity

It finally happened.  You’ve been trying to get the attention of a huge prospective strategic partner and finally they gave you a chance to explain the value you can bring…

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negotiating valuation cap

Justifying the Valuation Cap Amount in Your Convertible Note

In a previous article I explained what convertible notes are and when they are commonly used (see article titled Convertible Note Basics).  Now I’d like to dive into one of…

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startup fundraising

How Much Funding to Raise for Your Startup

Hopefully you are reading this before you decide how much to raise.  I’m referring less to the earliest funding raised (perhaps from friends and family) just to get your minimum…

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startup storytelling

Use Storytelling to Describe the Problem You Solve

As a startup founder seeking investment, your pitch deck must effectively communicate the problem your product solves. Learn how to captivate investors with powerful storytelling that conveys the true essence…

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pitch deck flow

Typical Pitch Deck Flow (Topic Order)

Your pitch deck will become the single most valuable communication tool for external audiences of all types. You will use it for multiple purposes, but especially presentations to investors. If…

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channel recruiting

Build Out a Channel By Swimming Upstream From Your Deals

You have a product that is ideally suited for a channel-based distribution strategy.  But every time you approach a prospective channel partner, they expect you to already have landed some…

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startup business plan

“Don’t Waste Time on a Business Plan” Doesn’t Mean Don’t Plan

I’m afraid the current “don’t waste time creating a business plan” mantra is doing unintended damage.  It’s leaving the impression on first-time entrepreneurs that they don’t need a plan of…

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A Quote Defining Luck

"Luck is what happens when preparation meets opportunity" - Seneca (1st century Roman philosopher) - Abraham Lincoln - Darryl Royal (former UT football head coach) - Oprah Winfrey

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startup scalability

The Difference Between Growth and Scalability

I often hear startup founders say things like “We want to scale” or “We scaled a lot in the past six months.” In most cases, they should have used the…

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Co-Marketing Explained

Thanks to HubSpot for this valuable explanation of what co-marketing is and what some of the common forms are (article here).  One of my blog categories is devoted to business development (BD).  BD…

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convertible note basics

Convertible Note Basics

Are you scratching your head trying to figure out how convertible notes work?  They are form of convertible security that is so commonly used for pre-seed and seed rounds of…

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startup marketing

Why Isn’t a Marketing Professional One of Your First 10 Employees?

If you’ve seen my bio or LinkedIn profile, you’ll know I’ve served three stints as a CMO and roughly half of my professional career has been spent in a marketing…

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pr is dead

PR is Dead – Or Is It?

The PR industry that is focused on high tech has been going through a continual transformation since the early 2000’s when the Internet started taking center stage for publicity.  I find a…

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raising prices

Thought About Raising Your Prices Lately?

Effective pricing strategy involves part art and part science.  But it’s not a “set it and forget it” aspect of your business plan.  Once you start getting some traction for…

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startup fundraising

When Prospective Investors are Looking for Predictability

If you're fundraising during the very early formation of your company, your ability to predict the future will be very difficult.  Of course, you can imagine and dream what might...

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Wayne Gretzky – Take the Shot

"You miss 100% of the shots you never take." - Wayne Gretzky

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business development

More BD Resources = More Chaos

The term “business development” can mean a variety of things for a company, but the one that relates to securing strategic partnerships is the one related to this article. It…

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