Legendary Venture Capitalist Reveals 10 Tips For Startups
Thursday, November 6th, 2008Legendary Silicon Valley venture capitalist John Doerr, polled executives from the companies his firm, Kleiner Perkins, has funded, and came up with 10 tips for new and struggling tech startups in the current economic environment:
- Act now and act fast, including, if possible, raising more capital.
- Whatever tough decisions you make, be careful to preserve the vital core of the business.
- Save or raise 18 months or more of cash.
- Defer capital expenditures. For example, instead of buying more PCs or more software, use web-based applications.
- Negotiate with suppliers and vendors to get more favorable (longer) payment terms.
- Get everyone in the company selling - not just your products and services, but your ideas and the company itself. Focus on increasing revenues.
- Replace cash-based bonuses with equity-based bonuses. Consider a voluntary salary deduction program to keep staff on.
- Invest cash in a safe place e.g. Treasury bonds.
- Monitor indicators of whether and the extent to which revenues are coming in. Ideally, you’ll want indicators that tell you whether you’ll be getting revenues or not 90 days in advance.
- Regularly communicate with staff, investors, and customers.
