Getting Paid: Compensation Design Best Practices at Startups

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By: Ali Rahimtula, Anthony Tjan, Dick Harrington

  1. Introduction

Few topics are of higher interest and concern amongst startup management teams than compensation. Surprisingly, however, there has been relatively little written on this subject.

In early stage startups and venture-backed companies, this issue has special significance because cash is scarce. Mistakes early on can doom a startup. As a company evolves, equity becomes more valuable and the design of a compensation scheme needs to become more scientific and thoughtfully planned. Continue reading

Characteristics of Internet and Internet Enabled Companies

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By Christopher W. Brody, Ali Rahimtula

Introduction

From time to time, we have been asked what characteristics successful Internet, or Internet enabled, companies have in common. In surveying existing successful companies, we came up with the list below. Please bear in mind that no company necessarily had all of these characteristics, but all successful companies had at least some of them. Continue reading

Fundraise Like a Pro Using this Internal SaaS Metrics Playbook

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Introduction

One of the greatest pleasures of my job is meeting many early stage entrepreneurs every week. I estimate that about 70% of the companies I meet have SaaS or subscription-based revenue models. Because of this, and because a core area of our investment mandate is to invest in enterprise SaaS businesses, I wrote this piece, which was initially an internal guide to explain how to systematically analyze a company’s SaaS metrics.

What follows is a set of analytical methods that a VC may use during diligence or the general decision-making process.

This piece is intended for SaaS entrepreneurs raising a financing round. Understand how investors use SaaS metrics and how best to present them and you will increase the likelihood of getting venture funded. Continue reading

Beyond Bitcoin: Commercial Applications of Blockchain Technology

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Introduction

Much has been made of the potential of bitcoin, the currency, but the venture capital community is increasingly focusing on the commercial potential of the underlying blockchain technology. Perhaps more interestingly, executives at large and sophisticated incumbent financial institutions and financial technology companies that I have spoken to, by and large, do not dismiss the technology. They believe it has legs and are studying the technology with a goal to enhance their product offerings. In short, many incumbents have a blockchain strategy. The general spirit is that the blockchain is like the Internet; sure, some businesses were disrupted and rendered obsolete, but the Internet made most financial services and other industry products better.

While many questions remain, the blockchain’s core features – decentralization, speed, low take rates, and stability (i.e. hard to hack) – allow it the potential to reinvent many industries. Beyond banking and payments processing, there are fascinating commercial applications to capital markets, insurance, legal technology, advertising, and government, among others. In each industry, there is the potential for significant efficiency gains (i.e. current functionality delivered faster and more cheaply) but also disruption. What follows in this piece is a synthesis, in simple language, of some of the most exciting commercial applications of blockchain technology we may see across these major industries in the future. Continue reading