October 18, 2014

Going beyond the 10 slides. Make sure your startup has a plan and a budget.

When raising seed or venture capital, having a traditional 10 slide presentation (plus backup slides) works well to communicate what your doing to traditional VCs and seed-stage investors and will go along way in raising capital.

However, you should spend quite some time thinking about different scenarios for the next 12 to 24 months and creating traditional budgets for those scenarios and not only create the slides. Having a plan and budget is much more valuable than most first-time technology entrepreneurs probably think.

It might be all about product, product, product the first 12 months of a startup, but if you run out of money you're dead, dead, dead and then product won't help you.

You should build a budget and a plan that allow you to raise enough cash to cover your costs for 12 to 18 months. At the end of the period you should be at cash-flow breakeven or have reached a milestone that will allow you to raise more capital.

If you're building digital services for mobile or the web, guessing your revenue is very difficult and quite risky unless you have some sales already. So assuming zero revenues is reasonably conservative from a cash perspective. But you should be able to estimate your costs quite well once you think through your team, business model, market and product.

By doing that thinking, you should have a good sense of how many people you need and how much to pay them, how much you need to spend on marketing (you're unlikely to grow entirely for free), office space, insurance, attorneys fees, travel etc. Figure out when different costs materialise and add it all up.

You will be a lot smarter about your business and more likely to succeed in both raising capital and building a company if you put in the time to understand how your costs will develop.

As the saying goes: "Plans are worthless, but planning is everything."

October 16, 2014

Apple mentions Lifesum at Special Event

Today at Apple's Special Event (14:30 minutes in) Apple mentioned Lifesum as an example of apps that are integrated with HealthKit. Very honored to be highlighted and proud of the team's work.

We are hiring.

January 1, 2014

If you're getting healther in 2014 - use Lifesum

If you've made a New Year Resolution to become healthier in 2014, you really should use Lifesum (formerly ShapeUp Club). Available on the App Store for iPhone, in Google Play for Android and on the web. Active members lose, on average, 6 kgs in 3 months and this year I personally intend to be one of them.

We made lots of improvements to Lifesum in 2013 and James Pember of Swedish Startup Space summarized them very well in a tweet: "Holy shit. The new @Lifesum app is beautiful. Masssssiiiive improvement!"

December 11, 2013

ShapeUp Club upgrades and becomes Lifesum

Today ShapeUp Club is announcing its new name and brand: Lifesum. The Lifesum brand better captures our ambition to help people change their behavior and improve their lives.

Head over to Lifesum.com or download the updated Lifesum app from the App Store or Google Play.

September 30, 2013

Swedish Syndicates Better Than Angellist? (if implemented by 3rd party)

I got a comment to yesterday's post on Angellist Syndicates, unfortunately unsigned.

"Agree. Frustrating that Syndicates are only applicable to Delaware based startups. My question is how long will it take for Angelist to move into the Nordics with Syndicates - or will someone copy the model first?"

I agree with the issue, which also includes US tax filings for investors, and hope that someone will copy the model and implement locally. Maybe FundedByMe?

September 29, 2013

Angellist Syndicates could boost Swedish seed investing

Angellist recently launched Syndicates. Syndicates allows active seed-stage lead investors to expand their capital base by allowing other angel investors to co-invest in startups. In exchange for access to good startups, the other investors pay carry, i.e. a share of any profits, to the lead investor. Basically it is a very lightweight fund structure.

As a structure, Syndicates could be helpful for the Swedish startup environment. Given that individual Swedish seed stage Internet investments are small (around 100 000 SEK being a common), ways to simplify pooling capital to a 1-2 million SEK seed round would be helpful to Swedish startups. Some of the advantages with the Syndicate fund structure seems to be:

  • The company gets to deal with one fund headed by one active investor instead of a party round of 10-20, mostly passive, individuals. Having one investor to deal with instead of 20 makes the day-to-day work of running a company easier.
  • An active investor gets additional upside from taking the lead investor role, which generally includes negotiating initial terms and board/advisory board work. The clear lead role also creates one angel investor that has the incentive to make sure that the company and new venture capital investors don't steamroll the rights of seed stage investors.
  • For individual seed stage investors it is difficult to get portfolio diversification without investing about 1 million SEK. With Syndicates, where the investment can start at between 6000 and 15 000 SEK, it is possible to get diversification at 100 000 SEK. This should make it more interesting to invest some savings in early-stage companies.
The structure would be helpful both for traditional private rounds and equity crowdfunding rounds (like Angellist and FundedByMe).

If there were a few Swedish Syndicates, my guess is that another 10-15 million SEK in annual qualified private seed stage capital would open up. With that direct private capital, another 10-20 million SEK would likely be available from venture investors and public funds as matching capital. It doesn't sound like much, but it would be a significant addition to the available Swedish Internet/mobile startup funding.

September 28, 2013

Exit proceeds needed to fuel the growth of the Stockholm startup scene

The latest rumor is that King has filed to go public in the US. Going public is a fairly natural step once a company grows big, especially if it has external investors. As King has large operations in Stockholm, the proceeds from an exit could be very good for the Stockholm startup environment. What Stockholm have in terms of, by European standards, larger technology startups (Klarna, Spotify and King being the big three) and a growing growing pool of startup talent, it lacks in early-stage financing (also known as angel or seed-stage investing).

My hope is that employees, and potentially the founders, of the big three and other startups will take some of the gains from shares and share options and invest in the next generation of startups (in addition to building their own). Capital from individuals with operational experience and personal networks is one of the things that are needed to take Stockholm startup environment to the next level.