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8/6/2019 Haas Entrepreneurs 11-17-09
1/12
Adrenaline Startups and Rapid-Fire Marketing
@
www.TandemEntrepreneurs.com
8/6/2019 Haas Entrepreneurs 11-17-09
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Where is Your Risk?
Private & Confidential
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Capital
Conventional Funding Milestones
Risk ()
Valuation
Idea isFeasible
Product Traction
SeedFunding
R&DCapital
Go-to-MarketCaptial
ExpansionCaptial
$0.5M $3.0M $8.0M $13.5M $150M
Based on slides fromVinod Khosla
8/6/2019 Haas Entrepreneurs 11-17-09
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Proven
Team
Proven
Value
Proven
Business
Proven
Channel
A Different Set of Milestones
CustomerValidation
CustomerDiscovery
ProductValidation
PartnerDiscovery
ChannelDiscovery
PartnerValidation
ProductTuning
PricingDiscovery
ChannelScaling
ChannelValidation
ProductExpansion
PricingOpt
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Today: Market Fit is Cheaper to Explore
Private & Confidential
Build Young Teams, Open Source
Deploy With Low Cap-Ex: The Cloud
Market With Social Distribution/Marketing
10x lower Cost to Establish Adoption
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Proven
Team
Proven
Value
Proven
Business
Proven
Channel
Heads I win, Tails I dont Lose Much
CustomerValidation
CustomerDiscovery
ProductValidation
PartnerDiscovery
ChannelDiscovery
PartnerValidation
ProductTuning
PricingDiscovery
ChannelScaling
ChannelValidation
ProductExpansion
PricingOpt
$0.5M $1.5M $20M
Burn
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Conventional Venture Capital
Private & Confidential
5 yr returns are negative
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Whats Changed : Exits Are Smaller
12%
73%
57%
23%
Data from
100M+
< 30M
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Proven
Team
Proven
Value
Proven
Business
Proven
Channel
Model Supports Many Possible Exit
CustomerValidation
CustomerDiscovery
ProductValidation
PartnerDiscovery
ChannelDiscovery
PartnerValidation
ProductTuning
PricingDiscovery
ChannelScaling
ChannelValidation
ProductExpansion
PricingOpt
$0.5M $1.5M $20M
Burn
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Investment Models Compared
Private & Confidential
Conventional Model Invest in a 5% chance of creating a few 100M+ Business
Capitalize the business with US $3-5M - A Round
Success = Big Exitsand founders make 10s of millions
New Model
Invest in the likely chance of creating MANY 10M+ Businesses
Capitalize the business with US $500,000 of initial capital Success = Cash Flow or Exits where founders make millions
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Increasing the Probability of Success
Redefine Success to include Smaller Exits
Contain the Market Risk Quickly and Cheaply
Get an A+ Team
Private & Confidential
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Tandem Entrepreneurs
Seasoned Entrepreneursworking in tandem with multiple
Small Founding Teams
applying
Modest Capital
to efficiently build
Simple Highly Leveraged Services
and take companies to
High Probability Exits
Private & Confidential