By Roy Goldenberg
Globes, Tel Aviv, Israel.
It isn’t easy founding a start-up, even for a great idea. Four top investors and entrepreneurs offer some tips for beginners.
MyHeritage Ltd. founder and CEO Gilad Japhet. The genealogy social network, which has raised $49 million, was chosen as the most promising start-up by “Globes” in 2013.
1. Do your best to finance your company yourself until you are able to obtain traction from customers. It will be worth it. You will get more interest from investors and a much better valuation so your investment will pay off.
2. Always check and perform due diligence on the investment partner before raising funds. Not just from business side but also personality side. You may think the money is important and the personality isn’t, but then you may find that you are stuck with someone unpleasant for the rest of your journey. Kickstarter and the likes are great sources of funding, check if they are applicable to your business.
3. Growth is the drug of the Internet. Companies that are growing fast are excused if they are not profitable or do not even have revenues. Challenge yourself to ensure that your product/business is going to generate sustained strong growth for years. If you think the answer is negative, consider changing your plans. It is not always necessary to think prematurely about monetization and cash flow, which is liable to affect the distribution of the product and limit the business‘s growth potential.
4. Grant stock options to ALL your employees. Everyone should be motivated to make the business a success.
Lool Ventures founding partner Avichay Nissenbaum. He has signed off on two exits, with the sale of SmartTeam and Yedda. He previously served as a VP at AOL Inc. (Nasdaq: AOL) and manager of AOL Israel Ltd.