Read How to Create the Next Facebook: Seeing Your Startup Through, From Idea to IPO Online
Authors: Tom Taulli
How to Create the Next Facebook: Seeing Your Startup Through, From Idea to IPO (25 page)
Work for hire:
A clause often found in a contractor’s agreement. It means the clients own all the intellectual property.
A
Accelerated vesting,
22
Accrual method,
107
Apple,
28
Bioinformatics,
181
Birchbox,
43
Business model
commissions,
128
customer fragmentation,
129
customer retention,
129
data selling,
127
Facebook
advertising business,
122
advertising system,
123
communications platform,
122
hire top people,
123
mobile advertising,
123
privacy,
122
revenues,
122
flawed,
128
Freemium,
127
gross margin,
129
innovation,
125
marketing,
129
payments business,
123
predictable revenue,
129
revenue drivers,
124
sustainable competitive advantage,
129
Business strategy
acqui-hire,
148
communications,
152
company’s patent portfolio,
148
compensation and benefits,
151
due diligence,
149
integration
customer care and cost cutting,
150
plan,
151
post-deal method,
150
resource allocation,
151
mobile photo sharing,
147
strong technology,
148
user-base acquisition,
149
C-Corp,
18
Chief executive officers (CEOs)
company growth,
134
data driven,
135
evils of politics avoidance,
134
–
135
Friendster,
131
passion for business,
136
photo-sharing concept,
135
trivial activities,
134
Zuckerberg
business card,
132
communication and attitude,
132
corporate imprinting,
132
criticism,
132
emerging problems,
133
Graham’s long-term strategic ideas,
132
town-hall meetings,
133
Cisco,
154
Common law trademark,
26
Company, selling
deal process
asset purchase,
157
breakup fee,
159
No-Shop Clause standard,
159
representations and warranties,
158
–
159
stock purchase,
158
valuations,
154
Cost to acquire a customer (CAC),
98
Customer lifetime value (CLV),
97
Customer relationship management (CRM) software,
7
Dealmakers
dividends,
91
due diligence,
94
Founder’s Activities,
93
information rights,
94
massive dilution,
84
negotiations
collaboration and aggression balance,
83
exploding term sheet,
83
hostile tactics,
83
no-prisoner’s approach,
83
silent approach,
82
pay-to-play,
89
protective provisions,
92
redemption rights,
91
valuation
comparable transactions,
84
critical deal terms,
86
option pool,
85
ownership percentage,
84
pre-money,
85
tax problems,
85
Digital sky technologies (DST),
50
Donation-based crowdfunding,
55
Earnings before interest, taxes, depreciation, and amortization (EBITDA),
106
Fair market value (FMV),
145
Financials
accounting fundamentals,
105
–
106
balance sheet
accounts receivable,
114
cash and cash equivalents,
114
Goodwill,
115
liabilities and stockholders’ equity,
115
marketable securities,
114
prepaid assets,
114
property and equipment,
114
–
115
cash flows statements
financing activity,
118
investing activity,
118
operating activity,
118
conservativism,
107
income statement
cost of revenue,
109
marketing and sales,
110
overhead costs,
110
research and development,
110
revenue,
109
Funding process
business plan,
46
investment stage
accelerators,
54
angel funding,
52
AngelList.com,
53
angel networks,
52
investors management,
56
old-fashioned networking,
53
–
54
IPO
authorized stock,
59
common stock,
59
company valuation,
60
outstanding stock,
59
preferred stock,
59
securities law,
61
seed series,
61
pay-as-you-go approach,
46
types of investors
angel,
46
superangels,
47
venture capitals (VCs)
carry,
48
limited partners,
47
venture rounds,
58
Generally accepted accounting principles (GAAP),
106
,
167
Gold Shares (GLD),
176
Go-to-market strategy
celebrity factor,
104
meetups,
102
PR
ad nauseam,
103
blogs and publications,
102
e-mail,
103
negative media coverage,
104
search engine optimization (SEO),
101
types of markets
blue ocean strategy,
96
innovator’s dilemma,
96
Yelp,
96
Groupon company,
37
HarvardConnection,
15
Initial public offering (IPO)
acceleration request,
170
archaic federal securities rule,
165
attorneys,
167
auditor,
167
authorized stock,
59
bake-off process,
168
class A and class B stock,
165
common stock,
59
company valuation,
60
credibility,
164
exchange selection,
169
financial reporting system,
166
gun jumping rule,
168
hiring key senior executives,
166
national exchange,
164
outstanding stock,
59
preferred stock,
59
Sarbanes-Oxley (SOX) law,
166
securities law,
61
seed series,
61
seat-of-the-pants approach,
168
secondary offering,
164
underwriter,
167
Intellectual property,
25
Internal Revenue Service (IRS),
23
Legal structure
83(b) election,
23
business transactions,
14
code protection,
28
common law trademark,
26
incorporation
advantages,
18
tax payment,
18
LegalZoom,
14
NDA,
16
noncompete agreement,
16
nonsolicitation agreement,
17
split equity,
20
stock options,
17
stock payment,
24
termination and change of control,
22
trademark application,
26
URL,
26
vested founder’s stock,
21
Yammer company,
25
Zuckerberg’s experience,
15
Letter of intent (LOI),
149
,
150
Limited Liability Company (LLC),
18
–
19
Matching principle,
107
McAfee’s strategy,
175
Minimum viable product (MVP),
72
–
73
Morse code,
2
Nondisclosure agreement (NDA),
16
,
74
Peak Theory of oil,
180
Personal computer (PC) project,
37
Pitch
criticism and comments,
76
deck
business model,
69
clutter,
64
common features of,
65
competition,
70
exit strategy,
65
financing,
72
go-to-market strategy,
70
Hollywood,
65
mission,
66
PDFs,
65
elevator pitch,
64
fake VC,
78
friendlies,
76
investor section,
79
NDA,
74
pecking order,
79
predetermined announcement date,
79
referral,
75
right VCs,
77