Steven CardinaleEntrepreneur & blue ocean innovation expert
Bio

Founder CID Management (Acquired '15). Wharton MBA. Multiple startups from SaaS to healthcare. Entrepreneur, business geek, startup advisor, and tech fanatic. Angel Investor in technology



Recent Answers


You'll need to figure out the WiiFM (What's In It For Me) for the attorneys. If they are not engaging it is because what you are offering is not peaking their interests. I know that's a hard edged answer, but I'd rather say something that may not be easy to hear but is honest than anything else.

Understanding the supply side of your market, the lawyers, what they want, what problem they are solving, and why they want it, is a crucial as understanding the demand side.

Doing an in-depth avatar and customer profile including their why is vital.

Let me know if you'd like to discuss on a deeper level.


Frameworks for new ideas, new innovations, and entrepreneurial models don't truly provide a good measurement of the connections between a company and success for an investor. I haven't seen VC's use SWOT analysis, Porter's 5 forces or Blue Ocean Strategy mapping in any real significant way.

The venture market is looking to reduce risk along a couple of vectors:

1.) Technical - Can the product be built in the way the founders say it can be built? This is where proof of concept and prototyping really matter if the product is anything but a standard development cycle (ie. standard App, SaaS, traditional Agile software cycle).

2.) Marketing - Can you reach customers at scale in a cost-effective manner? This implies that you understand your market well enough to identify high quality paying customers and know how to reach those customers through cost-effective channels. I have seen some VC's review the customer adoption lifecycle and develop market percentages (ie. from the book Crossing the Chasm, https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/). But I haven't seen this from a large majority of firms.

3.) Market - This is the biggest risk VC's take and the one you'll have the most difficulty and the one that is the most important to overcome. Will the dogs eat the dog food? Once you build it will they come? These are the kinds of questions VC will ask and no one has a solid model on how to answer. Other than customer velocity. If you can show increase customer adoption velocity on a MoM basis, that in itself is the real-world data and can be extrapolated.

There are other components to a company: management, financial, operational, that VC's will dig deep into. And those have their own metrics and heuristics.

Please set up a call to discuss further if you have specific questions.


Salary + Bonus + some type of equity typically set up as options. At this point, I would not be giving out actual stock but rather allow this individual to participate in the stock option plan.

From the brief description, this hire seems to be a first technical hire and not a technical co-founder. If you are paying market rates in terms of salary + bonus compensation then the equity component should be at the market level, potentially around 1%. However, that will get diluted as additional equity is distributed. Fred Wilson gives a good class on "Employee Equity" for free at https://livestream.com/Skillsharelive/MBAMondays/videos/490550

Definitely 4-year vesting schedule with 1-year cliff as suggested by Adam Lieb.

Make sure you have NDAs, assignment of invention agreements, confidentiality and good employment agreements in place. That will make a substantial difference when going out for funding, in the case of any disputes, and for acquisition.

Also, ensure you have a solid development plan adequately communicated. This should define what developers should pay attention to (ie. security must be included in all development protocols) and no outside software as modules without approval from management.

Work through these issues on my last company from initial developer through to large development team, both in-house and off-shore.

Let me know if you'd like to discuss any more.


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