Evaluating startup offers and comp packages

The guys from Venture Hacks just posted regarding how individuals can evaluate job offers from startups. There are two parts (Part 1 and Part 2).

I thought this post was interesting because this past year I fielded similar questions from classmates who were evaluating opportunities with startups versus bigger, established companies. One thing I have seen fairly frequently in the past (and something I myself have done) is people who over-value their options. Most startup companies do not sell for Google or VMware-like prices, so you have to assume a moderate outcome (and therefore a moderate payout). Heck, some of them never sell and just go under. Just the nature of the game.

BTW, if you are really fired up about going to work at a startup after school, you might think about taking a VC class. It helps you understand the financing side of the startup world, and also comes in handy when you are thinking about how to value a startup's offer of employment.

J-term entrepreneurs getting some press

My friend Ryan Petersen from Cluster Y 2008 just had his startup ImportGenius discussed on the Freakonmics Blog. It was also recently profiled on KillerStartups.com as well. It's a pretty interesting concept.

You should also read this post Ryan wrote for the CBS blog about starting a business while in school. A must read for any applicant who is wondering why they should choose CBS as a place to launch their startup.

Reader email - J-term compared to Fall Term, VC/entrepreneurship, and NYC

Here is a note (slightly abridged to maintain writer's anonymity) I recently received from a reader:


John -

I came across your blog (actually, I pretty much read the whole thing) and would love your perspective on the CBS experience. I'm interested in the January term myself...I'd like to run a couple startups and then eventually move into VC. I'd love to hear what you thought of J-term (were you an outsider and/or felt like you missed out?), why you chose J-term, what you think of CBS in general for startup/VC focused folks, and how you like NYC (I ain't never been, if you can believe that).

Lots of questions there, and I'm sure you have little time, but whatever you
can pop back I'd love to read. Thanks!


Happy to help. Let me take these one by one...

1) "were you an outsider and/or felt like you missed out?"

I get this question fairly frequently and it is sort of a shame because it implies to me that a) I have done a terrible job of explaining the integration of J-termers and fall termers in previous posts or b) the school is doing a poor job of communicating the level of integration of J-termers and fall termers.

In short, the integration is there. We are all Class of 2008 - J-term, fall term - doesn't matter. We join all the same clubs, get to go all of the same events, take the same classes, and in our second year we're sitting in elective courses right along side fall termers (and sometimes in 1st term as well if you exempted out of stuff).

I think the recent GBA election results also speak volumes of how involved (especially this year) that J-termers are in the school. I think 2 or 3 of the GBA exec board (including the incoming GBA president) folks elected by the entire 1st year class were J-termers. That is pretty strong representation. BTW, alot of that I think has to do with J-termers who peer advised J-term 2009 and got them fired up about contributing (thanks Kabir & Venk!)

The only thing I "missed out" on was a summer internship, but at this point in my job hunt I don't think it really mattered anyways. And, if you think you'll miss having a summer internship (if you're career-switching, for example), then I wouldn't do J-term.

2) "what (do) you think of CBS in general for startup/VC focused folks"

We have a good crew of entrepreneurially minded folks at CBS. There are some great entrepreneurship and VC courses, and the administration is supportive. I think it's an awesome environment although I have nothing to compare it to (i.e. I have not gone to another business school so it would be unfair to compare).

The one thing that is somewhat less appealing for VC-focused people like myself is that NYC is not a hotbed of VC activity like Silicon Valley. Boston also has a leg up on NYC from a VC perspective in my opinion. However, there are a bunch of great firms in NYC - you just need to identify them and try to start working with them as soon as you can.

One thing I think the school could improve on would be integration between the engineering school folks and the MBA folks. There are a couple of classes that facilitate this sort of interaction but it's not culturally embedded. However, that is not to say that students can't take initiative and organize activities cross-school. In fact, one of my classmates recently set up a mixer between the two schools which was very well attended.

3) "how (do) you like NYC"


NYC is a great place to be. I have spent about 6 years of my adult life here and it is definitely one of the places I think everyone should try to live in at least for a bit. It's also a huge advantage for the school when in comes to bringing in business leaders to speak, advise, or teach. People love coming here, and often they need to come here because that's where they are doing business.

MBA Business Plan competition

This looks kind of cool - lots of good VC firms involved as well...


The 8th Annual MBA Jungle Business Plan CHALLENGE
Presented by MBA Jungle Magazine

April 2008

Register now at www.mbajungle.com/businessplan
Submit executive summaries by March 15, 2008

You’ve competed against the best from your school; now compete against the best in the world!

Nearly 50% of past finalists have gone on to start their companies. You can’t afford to miss this!

Win thousands of dollars in cash and start-up services. Showcase your ideas to partner level VCs at firms like: Sequoia Venture Capital, Charles River, Goldman Sachs, Merant, Allegis Capital, Pequot Ventures, Intel Capital, JP Morgan Capital, and Ridgewood Capital

For more information and updates, check out the website: www.mbajungle.com/businessplan

RecordMyCalls.com covered in USA Today!

The startup I worked with last year, RecordMyCalls.com, was covered today in USAToday (online and print). Woo hoo!

questions from an applicant interested in VC

I thought this question from a prospective student interested in VC would be helpful to the audience, so I am reposting here.

...From what I gather, VC recruiting is heavily based on networking. Are there any opportunities to work with VC firms through course work or projects? Do VC firms actually try to recruit MBA graduates or is it pretty much a one-way traffic that relies on contacts? Does Lang Center offer any help to obtain a job in VC? Realistically, how many students get an offer in this industry?...

My response:

There are opportunities through coursework to meet VCs. It's fairly one way in my experience - you reach out to them and try to get them interested in sponsoring you for a project, internship, etc. There are very few that post opportunities publicly.

Be prepared to work very hard in building a strong network both in the VC and entrepreneur communities. Ideally, you want to develop one or two areas of market expertise, find unfunded companies in those spaces that have potential, and use this as a pitch when you talk to VCs. If you really want to do VC, I would recommend starting all of this NOW - before going to school. You might even consider lining up a VC internship in the months prior to starting school, to give you a head start.

The Lang Center won't directly help you get a job in VC but it will give you the chance to work with startup companies, develop your own business plan, etc. The entrepreneurship resources at the school are great.

I know this sounds like a lot of work - and it is - you'll be busting your butt a lot harder than your classmates who are able to leverage on campus recruiting (banking, consulting, etc).

Anyways, I hope this helps. Keep looking at the blog, I have numerous posts tagged 'venture capital' that are relevant. And if you have questions, please feel free to let me know, or better yet, post them on my blog so the commnuity benefits.

Support student entrepreneurs and pre-register for Intrabid!

This is another note from the guys at Intrabid. Please try out their service - pre-registration is going on now, and its quick and painless (or at least the founders tell me it is...and they're good guys so they're probably telling the truth :)

Here's an abridged version of what they just sent out to me...


As of today, you can pre-register for our service at http://www.intrabid.com/registration.php. Once we are going live, pre-registered users will receive a preliminary password and can immediately start auctioning with fellow students and benefit from our corporate discounts. 


We would really appreciate if you could take a couple of minutes to contribute to our marketing efforts in either or all of the following ways:

-Pre-register at http://www.intrabid.com/registration.php, it really just takes 10 seconds;
-Invite all of your Columbia and NYU friends, and any friends at other universities, to our Facebook page on http://www.facebook.com/group.php?gid=7664679641

Intrabid

I figured I would give a shotout to the guys who started Intrabid. Holger and Nico are guys who were in my Launching New Ventures class and are launching their company while they are still in school.

The reason I think the company is providing a useful service is that most commerce between students at CBS (selling books, selling furniture, finding someone to sell them an extra Follies ticket, etc) is done via email lists. In this day and age, email is a pretty clunky way to handle it, and Intrabid plans to mediate these interactions through a community-based website.

Here is the blurb they just sent to a bunch of students at school. Check out the site if you have a chance and support CBS entrepreneurship!


Dear fellow students,

Have you ever felt annoyed by all the NOTICES, MARKETPLACE, and REAL ESTATE mails of students wanting to sell furniture, textbooks or any other items that fill up your Columbia mailbox? Or do you want to sell items to your fellow students and see no other opportunity than sending out mails with all the hassle that comes along with it? We developed the solution for you: Intrabid.com – The Community-Based Auction.

For those who don’t know us, Holger and I are second year MBA students at CBS who developed Intrabid.com over the past year. In short, Intrabid is a community-based online marketplace through which college and graduate students can auction products and services amongst their peers on campus and buy new items at exclusive student discounts from established corporate partners. As such, we envision being a one-stop shop for college and graduate students where they can buy and sell any product or service in a secured and closed environment. We obviously expect all of you to be our first users once we officially launch. In the meantime, already check out the Intrabid teaser on http://www.intrabid.com or take a tour of the platform on http://www.intrabid.com/tour_auctions.php.

We plan to launch our pilot at Columbia University and NYU, so please forward this mail and talk about Intrabid to any student you might know outside the business school at Columbia or at NYU. We are counting on your support,

Nico & Holger

Great plug for my startup on Consumerist!

The startup I work at, RecordMyCalls.com, got reviewed on Consumerist.com! Great news for us - Consumerist is a very well-trafficked website and popular with the consumer protection crowd.

Tonight, I spent some time with a CBS alum who is off starting his second company. He sold his first company (started right out of CBS) to Factset and now him and his partner (CBS guy, too) have started a cool location based messaging service called RadiusIM. It works on all the existing IM networks and lets you see where your friends are.

Looking forward to tommorrow (Friday) - it's the first Friday in a long time that I don't really need to be anywhere. Looking forward to doing some chores around the house as well (I know, lame :)

Tommorrow night one of my pals from Cluster Y is having a birthday party uptown, which I'll probably hit later on. He's a guy who is starting a company (data backup service for laptops) while in school. I swear, not everyone at CBS is an entrepreneur...

I'm definitely going to this event hosted by the Technology Business Group

This looks like a good event and very relevant to my life at the moment...


Do you have a business idea but unsure about how to build the technology?

Should business people look for a technical co-founder? Or start and then hire engineers?

Outsource the development? How? Where?

Come hear Nicolas Vandenberghe, a successful entrepreneur and founder of 4 startups, discuss his experience managing the technical aspects of a start-up.

Guest Speaker:

Nicolas Vandenberghe
Founder & CEO of ITerating.com
Former Entrepreneur-in-Residence at DFJ Gotham

RecordMyCalls.com

I figured I would take this opportunity to plug one of the startups I'm working with. I've been helping them out since the summer and been having a great experience so far.

The startup is called RecordMyCalls.com and they allow you to record phone calls from any phone, any time, any place, without buying additional hardware or software. You can signup online and start recording calls within minutes.

It's a very useful service and has helped multiple people avoid lawsuits (he-said-she-said stuff is easy to prove when you have a recorded phone conversation backing you up). It's also useful for personal stuff - we had a customer who was trying to memorialize a voicemail message that was about to be deleted from her box. The voicemail was from a loved one who had just passed away, and so she was able to transfer it to her RecordMyCalls.com account where she now has permanent access. There are also tons of other uses, which I won't get into here.

Here is some recent press about the service and also something written up about us on About.com.

OK, the advertisement is over :) But I would encourage you to check out the service if you have a chance. You can get your 1st 15 minutes of recording free if you register with the code 15FREE.

Thanks for listening and back to your regularly scheduled business school related programming. :)

Global Social Venture Competition

Against my better judgement, and against my vow to myself not to overload next semester, I am planning on entering the Global Social Venture Competition. I have a pretty good idea that I don't think anyone has executed on yet, so I figure, what the hell, let's give it a shot. I am trying to get my clustermate who I worked with on the Outrageous Business Plan competition to work on it with me. If not I think I am going to ask some of my peeps in Launching New Ventures if they'd like to team up. I need to get an exec summary in sometime in January and then the full plan in February.

I skipped Happy Hour tonight...I have been skipping it a fair amount this semester. It's funny, I would hardly be caught dead last year missing a Happy Hour, and now I don't bat an eye when I skip. This weekend, however, there are two J-term b-day parties, so I am going to get my dose of CBS socialization regardless :)

Oh yeah, I have a ton of work to do this weekend, too (shocker)...

Congratulations, your application to Kauffman Fellows Program was successfully submitted.

Just submitted the application and received that lovely message. Now I have to wait a few months :) If I hear anything, I will let you all know.

Hope you're enjoying your Wednesday.

Burning the candle at both ends

Today I spent most of the day working on my Kauffman Fellowship application. It's due tommorrow. Two of the three recommendations are submitted, and my essay is almost ready to go (as ready as it can get given the deadline is tommorrow). I wish I had more time to spend on it (like my business school essays which I slaved over for months) but the way this semester is going (5 classes, 2 internships), I am just trying to make it to the finish line in one piece :)

Actually tonight I saw a blog written by a guy who applied for the fellowship last year. Unfortunately, he wasn't selected, but he provides alot of good information. He also blogs about his job as a product manager at Google, which is equally interesting. Anyways, I'd recommend you start here and then poke around his blog as you like.

The companies that we'll be visiting on the Technology Business Group Silicon Valley trip was just announced, and I have to say that the organizers appear to have done a GREAT job at lining up some kickass companies. Companies include:

Facebook
Intel
Yahoo
eBay
VMware (nice)
Cisco
Storm Ventures
DFJ Frontier
Technology Crossover Ventures
Intel Capital
Innovacom

As much as I am bummed that I am now not going on the Southeast Asia trip, I think this is a great networking opportunity that can't be missed. At least for someone like me :)

Special Guest in class today, interview updates

Fred Wilson was one of the guests in Adam Dell's Business Technology and Innovation class today. Fred is one of the two partners at a premiere NYC VC firm called Union Square Ventures and really well respected in the US venture community. He talked about his career in VC, how he ended up doing what he is doing, and touched on some industry trends. I also got to ask him a question about one of his portfolio companies, Etsy. Fred's firm is very small and I don't know if they'll add staff any time soon, but I am positive it would be an awesome place to start a career in venture capital.

Second, I wanted to give some anecdotal updates on interviewing invites for my fellow J-termers, specifically related to consulting jobs. I have spoken to more than one person who received an invite from McKinsey, and everyone I talked to (maybe 4 people who had not worked in consulting previously) who was looking for a consulting job got some interviews. Of course this by no means guarantees anything related to final job outcomes, but it's certainly an encouraging first step.

Blogging from Uris Hall

Sitting out here in Uris killing some time before I go meet one of my clustermates for lunch at a kosher joint!

Just met with Adam Dell and the rest of my project group for the Business, Technology, and Innovation class I'm taking. We're going to be creating a website to help entrepreneurs find and raise capital using an open source/community contribution model. Right now we're just in the planning stages but the goal is to have something out there by the end of the semester.

I have one more phone interview with the VC firm that I've been talking to, so I think that assuming that goes well, I should have the part-time gig.

Last night I hit a networking event downtown - the Web 2.0 Meetup. Sun Microsystems hosted the event at a nice pool hall in the city called Slate. And they also provided the food :)

Launching New Ventures

We had our first Launching New Ventures class today. It is taught by a serial entrepreneur named Cliff Schorer and another entrepreneur named Brendan Burns. Cliff is the entrepreneur-in-residence at the school and Brendan was CBS '93 (I think) and now working on turning around a startup that was on the verge of failing. Both of them seem very accomplished and I can already tell they are going to be a tremendous resource to anyone who is starting a business while they are at Columbia (and after).

The class was a mix of introductions ("Hello my name is X and my business idea is Y"), lecture (business plan overview, course format, etc), videos (we saw interviews with the founders of Apple, Microsoft, and Fedex), and presentation of business ideas. The course TA is already operating an apparel company and ran us through part of his investor presentation, and another one of my classmates shared the pitch for his computer data backup service.

There were a bunch of interesting ideas, and many people in the room who were in various stages of the venturing process. There were also some students who were running multiple businesses, or who had started other businesses in the past. I'm looking forward to helping everyone in the class develop their ideas. I'll keep you all posted on this course as I am pretty confident it will be one of my faves this year.

Tech Meetup Tonight!

It's that time of the month again -- the NY Tech Meetup. It's a chance for local techie entrepreneurs to demo their products or services to the greater community, which includes other techies, VC's, and various and sundry other folks. This week there are some interesting presenters, including a guy from Amazon who is going to talk about S3 and EC2 and another guy who has created an information market for parking spots (sound familiar? :) It's happening down at Cooper Union at 7pm, so I better get moving...

Back in Beantown

I'm back home in Boston for a couple of days. I'm going to hit the Red Sox game with my Dad tomorrow and then hang out with my Mom and little brother on Thursday before heading back into the city. Perhaps I'll catch some fireworks as well! Or maybe a flyball - I think our seats are on the short porch in right field at Fenway, and their opponent, the Tampa Bay Devil Rays, are pretty awful.

This past Saturday night I DJed at the 5-way birthday party held by some of my J-term compadres at a loft on Canal Street. It was a great party and the organizing birthday boys also made it into a fundraiser to support some of our classmates who are planning to run the NY Marathon this fall. I hadn't DJ'd for a live audience in over a year, so I was worried about there being some cobwebs, but my set went over really well and I heard alot of good feedback. I'm hoping to get out on the turntables alot more this coming year.

Next week the company I'm interning for is going out to informally talk with investors, and I will be coming along to listen and learn. I'm very excited for this since it will give me a chance to meet VCs in person and hopefully start establishing relationships. My plan is to try to get some sort of VC-related independent study for the fall, so I need to get cracking in the next month to make that happen.

On the way up from NYC to Boston tonight I also caught up with my friend who is starting a software company. I'm giving them advice on their business plan, fundraising, etc, and helping them prep for an analyst call next week. (By analyst I mean IT industry analyst, not VC analyst). There is also some talk of me going out to an industry conference with them in September to help them market and sell the product, which would be fun.

Also, I wanted to share a posting from PsyBlog that talks about why career planning is time wasted. I thought this was a great article, and hopefully makes you feel better if you're stressed out about which post-MBA career path to take. As my wife always says, "It will all work out." So just listen to my wife and you'll be fine. It has worked pretty well for me :)

On Monday I attended the 1st annual East Coast Venture Competition which was sponsored by VC firm DFJ Gotham and took place at Columbia. It was a really great event, especially considering it was the first one (they have one out West too, but this was the first on the East coast). A couple of guys from Princeton took first prize (250,000 in funding) for their chemically enhanced bacteria-resistant catheters and one of CBS's own won the surprise 2nd prize - $100,000 in funding.

The CBS winner was a company called Greenware, founded by a 2nd year who just graduated. Basically, they make ecologically friendly paper plates. It sounds simple but is actually very hard to do. The plates are microwavable, washable, and look good, too. I think they're onto something, and apparently the VC's do, too!

I also had the pleasure of meeting Tim Draper, who came out to judge the event. For those who don't know, he is the 'D' in DFJ, and one of the world's most successful VC's. It was kind of like meeting a rock star (albeit a rockstar that only MBAs and VC geeks like myself would appreciate :)

Actually, I just put some links to some videos of Tim on the right side of the blog -- it's him singing his VC-themed song, 'The Riskmaster'. Corny, but funny. Future MBAs will get a kick out of it (and others may cringe).

Kudos to DFJ - they put on a great event.