Are you planning to start your web startup? Sooner or later you might find yourself contemplating on these three questions: What is the good startup size? Who should be in the initial core team when looking for funding? And finally, what is the realistic cash-flow burn rate for a small startup before receiving any funding? In this video, the man behind Revision3 answers these three questions.
Adelson thinks that it is fun to be one of the first 10 people in the early stages of a startup. It is an important pivotal point. He reasons that when you are in that early stage and there are less than ten people working in the company, you tend to wear multiple hats. This is an amazing experience claims Adelson. It is one of those rare moments where you might get to do jobs that in a larger company you are never qualified to do. This is where you can show your skills. Adelson advises you to hire when you have more than 20 employees.
Addressing the second question, Adelson says that after you receive your first funding, you typically need one decent finance person who can focus on the books. It could be a marketing and sales VP. Another person you need to have in the group is a technology leader like a CTO or VP of engineering who can really own both operations and engineering at the beginning. Adelson advises that you have to wait for the need or success of your startup before hiring an extra person in the team.
Lastly, he tackles the last query on cash burn. Adelson explains the meaning and types of cash burn. Cash burn is how much money you are spending. There are two different types of cash burn: gross burn and net burn. The latter is the total cost; the former is gross burn minus revenue. Adelson advises that you have to watch out on your net burn.
Run time: 5:30 minutes
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Do you have other startup questions bugging you? Post them below to start a discussion.
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