Dr. Sean WiseStartup Canada's Mentor of the Year (2014)

Over $2B in capital raised for seed stage startups over the last 15 years. I've made 13 seed investments this year alone. I've spent the last 15 years in Venture Capital. 20,000 elevator pitchers heard. 5 seasons with Dragons' Den / 3 seasons with The Naked Entrepreneur. 2014 Mentor of the Year, Startup Canada

Recent Answers

What are some things that first time entrepreneurs should consider? In general or before quitting their day job?

I wrote a book on this topic with legendary investor Brad Feld. We based it on hearing more than 20,000 opportunity pitches. On Dragons Den on Shark Tank and first hand in our decades in the seed stage startup industry.

We found entrepreneurs should not quit their day jobs until they have:

- found something you are obsessed with
- enough money to live for 6 months
- found an unmet market need that they have unique insight on
- tested it with early adopters
- confirmed that your solution could add exponential value to those early adopters

We also found that access to early adopters was a key Barrier. One often mitigated when the founder is also a customer (ie member for the customer segment).

For more: https://www.amazon.com/dp/B06Y16VJ4L/ref=cm_sw_r_cp_awdb_OmMxzb6AF69QA

Hope that helps.
Onward and Upward
Dr. Sean Wise, BA LLB MBA PHD
Partner, Ryerson Futures
A seed stage fund and accelerator

Give a Google of "talent triangle". I have found that the majority of successful start ups have people with: Business acumen, domain knowledge and operational experience. E.g. (reverse order) someone who understands how to build it, someone who understands what customers want and someone who can help execute. A hacker, a designer and a hustler.

Of those three corners in the talent triangle what are you weakest on? Let that guide you.

When 40% of your pilot customers insist on continuing to use your product you know you have something.

When 40% of the visitors to your MVP click on the "by now button" only to find out it doesn't work it is time to monetize.

When 40% of the people you show your paper based wireframes say "I buy that and will even give you a preorder"

Ideas are worthless.
How you comes from execution.
Work with early potential customers let them be your guide to monetization.

Actually this is an accounting issue commonly referred to as "revenue recognition". How you recognize and record sales is dictated by both the tax regulations and corporate policy.

Go to the website of your national government tax agency and input "revenue recognition".

As long as you comply with generally accepted accounting principles (GAAP) most likely be fine. But FYI, we recommend our portfolio companies track revenue as money in the bank and sales as part of the sales funnel.

While I agree with Tom, I think you might also try some crowd funding. Nothing confirms demand like users buying before it exists.

Use a video walk through of the iOS app to demonstrate the product, then reach out to the android community to see if it resonants with them. If it does they will pay. If it doesn't then be happy you didn't sink money into building it first.

As a seed stage investor (13 deals in the last 12 months) I'm happy to tell you it is easier than ever before to meet seed stage investors. Here are a few ways:

1) conect with founders in your city who have been funded. Ask for their advice. Impress them and let them introduce you to their investor.

2) apply to an accelerator (eg techstars) and nail it on demo day. The audience is filled with seed stage investors.

3) attend an event featuring the seed investors and ask for their advice after the show. Requests for advice are a great way to showcase your venture.

4) kickstart your project. Raise funds and engage early customers. Nothing impresses as much as sales and users.

5) leverage clarity, LinkedIn and product hunt.

6) use the same service providers (eg lawyers, accountants) ask them for an intro.

7) find out where their funds originate from and ask those LPs for an intro.

8) apply to present to your local angel group.

If I look at the deals we've done this year. 80 percent come from the channels above. Until then -- bootstrap it.

You should not scale until you reach product market fit. You should not scale unless of your cost of acquisition is greatly below your lifetime value of customer. You need to know how to run profitably small before you scale big.

That being said a good benchmark is don't scale until 40% of your users would pay rather than lose your solution.

Users are a sign of traction a.k.a. proof of concept. Most angel investors want to fuel growth and help you strive for product market fit. If you're following the lean startup model - most angels will only engage once you found problem solution fit and are reaching for product market fit.

That being said 10,000 users is a typical benchmark.

Great question. I have spent 15 years in the seed stage startups and now is a great time to be building and funding a mobile startup. We (my seed VC fund) invest in a lot of mobile startups that are pre revenue. Typically in the range of $50,000 for 5%.

That being said, having an MVP isn't enough. First try to bootstrap your way to early users. Customers are better than investors for a variety of reasons, including: no dilution and access to user feedback. Then try kickstarter, especially if this is a b2c app. Nothing proves you have a hot product like early users, especially those early users willing to put their money in first.

Next I might turn to an accelerator like Techstars or DreamIT. This programs offer you way more than just cash. These programs offer: mentorship, education and buzz. All very helpful assets in the early days.

Hope that helps, drop me a line if you wish to know more.

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