As discussed in my recent post about a TiE event on Chicago start ups, there are many factors to consider when taking in funding and employees. Don Dodge discussed in great detail Paul Graham’s The Equity Equation post.
So I’d like to ask the blogosphere, “How does one judge this inflection point of being better off with this asset, person or money infusion?”I’d say this is an especially tough question when the many startups aren’t focusing on the priorities in the correct order. When I advise a start up or look to join an Internet, Web 2.0, search engine or mobile start ups, I look for the following things:
1) A workable revenue plan either now or that can be communicated in a believable timeline and/or a data model that collects opt-in data that would allow monetization once scaled.
2) An understanding that bringing in a person with strong knowledge of data models and marketing methods early in the process is critical to success and to reducing the revisions to applications later. A CTO without a logical end goal is all too often a wasted resource that could and should wait until there is a clear execution vision.
3) People that have a passion for creating, implementing and executing on an idea first and foremost.
4) A willingness to march into a new direction without limiting beliefs. This is where breakthroughs originate.
Again, in the end it’s all about judgment and knowing the current teams strengths and weaknesses! I wish you well in your start up ventures.