10 Lessons for Entrepreneurs from PrivCo Founder

September 27, 2012
Copyright © 2012 PrivCo Media LLC. All Rights Reserved.
Entrepreneurial Strategy:
From Initial Idea to Raising Venture
Capital to Selling Your Company:
Top 10 Lessons Learned
By Sam Hamadeh, JD/MBA
Founder, VAULT.com
Founder & CEO, PrivCo

Speaker Background
Sam Hamadeh
PrivCo’s Founder and CEO
Founded online job and career information
leader Vault.com
Sold majority stake in Vault.com to major
private equity firm in 2007 for $100M
MBA in Finance from Wharton and JD from
the University of Pennsylvania Law School
Extensive background in finance and private
company research with experience at Morgan
Stanley and Goldman Sachs; license
corporate attorney with corporate
finance/securities specialty

PrivCo: The Leader in Private Company Financial Intelligence
• PrivCo is the first and only provider of financial and business data on
major privately held companies.
• PrivCo provides detailed financial and business data on over 56,000
major private companies – and over 39,000 private market deals - in a
single searchable source.
• Data on private company investors, M&A deals, VC funding and more.
• PrivCo acts as a Bloomberg for major private companies.

THE IDEA:
Industry Knowledge is Key
Key Lesson 1

FOCUS WINS
(Before you conquer the world, maybe first
try conquering Jersey)
Key Lesson 2

VALIDATE IDEA
Key Lesson 3
First Hand Observation of Behavior: not market research
• Mock Sales Calls
• You as a Founder or Founders MUST do this PERSONALLY
 Make cold calls
 Make sales calls and set up sales meetings as if you already have
the product
 Print up business cards, go to meetings, bring sales presentation
and pitch as if product exists
 Present sales contract & pricing, and ask customer to buy
 What you will learn is priceless

“Minimally Viable Product”:
LAUNCH 1.0 FAST
Key Lesson 4
version
1.0
customer
feedback
iterate
product
version
2.0
customer
feedback
iterate
product

scaling sales & marketing too
soon is the biggest startup
KILLER
Key Lesson 5
[SEE SAM’S CASE STUDY “Customers Aren’t Buying Our Product. Our
Startup Must Have a Marketing Problem.” ON SCALING SALES &
MARKETING TOO SOON, LEADING TO THE STARTUP’s FAILURE]

FUNDING AND VCs
Key Lesson 6
Avoid VCs unless and until absolutely necessary
• VCs do NOT know anything about running a startup
• If you do go to VCs, have a real reason: SPEED TO
MARKET TRULY IS MISSION-CRITICAL, CAPITAL
INTENSIVE BUSINESS etc.

COSTS KILLS STARTUPS
Key Lesson 7
• Keep fixed costs low – no marketing, minimal
staff (better to have 4 A-players who have skin in
the game than 8 people where most are average
performers)
• Cash buys you time to make mistakes, evolve,
change product or business model. CASH and
TIME are every startup’s life blood

HIRE SLOWLY,
FIRE QUICKLY
Key Lesson 8
• Use Hiring Tests (coding for programmers, mock
sales calls for salespeople, mock writing for
content position, etc.)
• Managing techies/programmers: unique animals
(“How can you tell an extroverted programmer
from an introverted one?”)

WHEN TO SELL
AND HOW
Key Lesson 9
• Wait for buyers to start approaching you first
• Never negotiate with just one interested party,
once in play, solicit multiple offers
• Alternatives to selling (paying dividends, tender
offers, secondary market sales, minority stake
sales)

WRITE DOWN IDEAS
IMMEDIATELY!!
Key Lesson 10
Keep Lists and Reminders
I think this is the key to productivity in business (and life in general).
When you think of something you need to do, type it in
IMMEDIATELY in your phone as you’re thinking of it. Genius strikes
at the strangest places: while on the toilet, at the gym, in bed right
before sleep. Memory is short. Jack Dorsey sketched Twitter on a
piece of paper at a coffee shop the moment the idea hit him. Had
he waited there may not be a Twitter. Brilliance is fleeting.

exhibit: Twitter sketch

WSJ Study: 3 out of 4 VC backed startups fail
“If you beats those steep odds and do make it, give back
& help other budding entrepreneurs.”
Being an entrepreneur is hard work, the beginning can
be very stressful with endless hours
“Employees get to have good weeks and bad weeks.
Entrepreneurs have good hours and bad hours.”
“Saturdays are Fridays with better traffic.”
– Silicon Valley Entrepreneur
“The problem with being your own boss is…there’s no
one to steal from.”
Closing

But with risk can come reward.
There’s no more rewarding and fulfilling career than
being an entrepreneur and creating something from
nothing in an industry you love.
It’s worth it in the end so if you have it in you…go for it!
Good Luck.

For a demonstration of the PrivCo
platform, please contact
sales@privco.com or 212-645-1686.

10 Lessons for Entrepreneurs from PrivCo Founder

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