Investor Ready

5 Startup Lessons I Learned While Becoming a Pilot

Posted by on Jul 1, 2014 in Goals, Investor Ready, Setbacks, Startups

As a recently licensed private pilot, I feel truly alive when flying a small plane. In a single flight I can feel pride, humility, fear, joy, and triumph. This list of feelings also crops up on a regular basis for my co-founder and me as we work to build our publishing startup, causing me to reflect on the similarities between learning to fly and building a startup. Here are my top five flying lessons that also apply to my startup efforts: 1. Practice, Fail, Learn. There is nothing stickier than a lesson learned by f’n it up the first few times. We had just landed, and the 1946 Champ rolled down the runway at good clip when my instructor told me to take over and taxi us back to the hanger. Feeling confident that we were safe on the ground, I took the stick. For the first few hundred feet I had things under control. In an instant, I felt the back end of the plane start to swing to the right. My instructor called for more right rudder, but I reacted too slowly. The plane made an abrupt left turn, the left wing dipped and almost struck the ground. Finally, the plane came to a quick stop sitting...

Learn More

Staying Alive – Know Your Burn Rate

Posted by on Jun 13, 2014 in Angel Funding, Investor Ready

“What is your burn rate?” When angel investors ask this question, founders of investor-ready startups have the answer ready to go. Cash is the lifeblood of any business, and investors ask about the burn rate metric because they can use it to make a simple calculation that tells them how long your startup has to live, and how far any new investment will take you. As a founder, you need to develop a clear understanding of your startup’s burn rate not only to be ready to answer potential investors, but also for planning purposes. Managing cash flow is one of the key success factors for any startup. Burn rate for a startup is defined as how much money you spend each month to keep the startup alive. A burn rate calculation should account for all costs, including: Direct Product/Service Costs. Direct costs associated with monthly sales, such as cost of goods sold, partner or affiliate fees, and so on. Sales and Marketing Expenses. Estimated sales and marketing costs, including travel to customer sites, trade show fees, marketing costs, pay-per-click advertising fees, and so on. Founder and Employee Pay. Salaries and wages to keep everybody showing up early and staying late. Keeping the Lights On. Other ongoing expenses such as...

Learn More