Series A Crunch: Forget Freemium

What is your business model? Do you have one, or is it TBD?

Is it Freemium?

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Series A Crunch: Obsession With Exit

Do you know the difference between a business model and an exit strategy?

Are you building a business that has a real, viable business model?

Or are you trying to do an Instagram?

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Series A Crunch: Tyranny of the TAM

What is TAM? Perhaps, the biggest factor in whether a VC funds you or not. TAM = Total Available Market.

Note: Top Down TAM doesn’t matter. You need to present a Bottom-Up TAM Analysis.

And to get funded, that TAM needs to be very large. Billion. Two billion. Ten billion.

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Series A Crunch: Customers vs. Investors

What have you been doing for the last six months? Chasing customers? Chasing Investors?

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Series A Crunch: Real vs. Pseudo Entrepreneurs

Much is being said on a daily basis about the Series A crunch. This is our series on the subject. In short, byte-sized posts, I will give you my thoughts on how to deal with the issue. Please note, this advice is entirely for entrepreneurs, not investors.

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Having Trouble With Series A Funding?

There is a lot of talk right now that Series A funding has gotten difficult for the tens of thousands of entrepreneurs who have received angel financing over the last 18 months. Some data from PEHub:

According to the University of New Hampshire’s Center for Venture Research, the number of active angel investors topped 300,000 last year, up 20 percent from 2010. The ranks of the matchmaking service AngelList also swelled, with 2,500 investors joining the community last yearalone, most of them in the last six months. (When AngelList got its start in the spring of 2010, it listed 80 accredited investors.) A study from UNH shows that angels put a fresh $9.2 billion to work in the first half of this year, a 3.1 percent increase over the same period in 2011.

Meanwhile, the number of firms that are actually investing is dwindling, despite the best efforts of partners to save face. The NVCA pegs the official number of “active” traditional firms at 500, but according to NVCA President Mark Heesen, this number is misleading, because at least 200 of the firms only do a deal or two a year.

Last year, some 66,230 companies received $22.5 billion through angel investors, up from 36,000 receiving $15.7 billion in 2002, according to the Center for Venture Research at the University of New Hampshire.

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Seed Capital Using Crowdfunding: Korstiaan Zandvliet, CEO of Symbid, Amsterdam (Part 3)

Sramana Mitra: For investors with zero or limited experience in pre-seed or seed investment, what do you do to mitigate their risks? Of course, this is a highly risky business. How do you recommend or help your investors evaluate deals?

Korstiaan Zandvliet: I think the second part of the interview addresses risk analysis and risk management from an investors’ side. From the side of Symbid, the reference to risk is mentioned in the How-It-Works-section on the website and in the Terms & Conditions one has to agree with before making an investment. Also, the opportunity to retract shares and reinvest them in another idea is one way to mitigate risk to a certain amount. However, it remains so that with any form of investing, risk is part of the deal. It is up to the investor how much he or she is willing to risk losing. >>>

Seed Capital Using Crowdfunding: Korstiaan Zandvliet, CEO of Symbid, Amsterdam (Part 2)

Sramana Mitra: What are the core benefits that your community offers to the investors?

Korstiaan Zandvliet: There are several motivations for investors to invest, so the benefits differ accordingly. What the community offers to all investors is engagement and information/updates about the plan. The entrepreneur provides the latter by answering questions, sending out emails, or placing status updates about the progress of the idea. Other than that, part of the community is mainly involved with the idea and doesn’t participate much in discussions. Other investors enjoy posing questions or information in relation to the idea they came across or answering questions that are aimed at the entrepreneur in general if they know the answer. >>>