Download - Derisking A Business Venture - TechAviv - January 2009

Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.

De-Risking A Business VentureIncreasing Value by Decreasing

Assumptions

Steve Barshstevebarsh.com [email protected] +1.215.888.2101 twitter: sbarsh


3 – 7 Key Assumptions

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Common Assumptions

Demand (huge problem)

Market size Feature set Positioning /

differentiation Product

development Pricing Sales cycle stevebarsh.com3

Competition Team Execution Marketing Financials &

forecasts Capital Exit value


Stop Waving, Start Pointing!

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De-Risking

Identify risks & assumptions Before or while

developing product

Before pitching De-risk the risks

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De-Risking Goals

Convert assumptions into knowledge At the lowest cost As quickly as possible

Consume intellectual capitalbefore venture capital

Decrease assumptionsto increase value

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Experiment / Test & Research!

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•Hypotheses to prove• Valid experiments toprove or disprove• Release early, measure, learn, iterate• Research• Valid proxies you can use• So, it’s / were just like ____• Be ready to defend


3 Main Takeaways

1. Key assumptions

2. “Experiments” to test

3. Convert assumptions into knowledge Low capital Increase value

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See Also

Redeye VC Blog: Failing Cheaper by Josh Kopelman, First Round Capital.

Common Mistakes Made by Entrepreneurs by Mark Henricks.

How To: Raise Money in a Down Economy by Eric Ries at KPCB.

stevebarsh.com9


De-Risking A Business VentureIncreasing Value by Decreasing

Assumptions

Steve Barshstevebarsh.com [email protected] +1.215.888.2101 twitter: sbarsh