Five Questions You Must Answer Today

Richard RosenblattCEO and FounderDemand Media

Q1.) Why Are You Doing This ?

What does this kind of passion look like ?

A. Because I am in love with this idea

I’m passionate about lots of things…

Elements I focus on:• Consumer products that are made possible by the

Internet• Models that leverage and exploit the network effect• Media models that can be reinvented• Opportunity to work with amazingly smart people• Ability to make money for my investors, teams, and

friends

None of these are why I like to start companies

My passion is Self-Publishing

1994

2003

2007

Q2.) Do you have the best crew?

Your Crew is Bigger than You Think

Founders

Executive Staff

Board of Directors

Service Providers

Investors

Functional Staff

Advisory Board

Don’t settle on any of these groups; pick the best

Q3.) Who Will You Take Money From ?

Anyone

Compatibility

Sector experience

Temperament

Explicit Value

Fund position

It Really Pays To Think This Through

Savings Account

Friends & Family

Angels

Strategic Partner

Early Stage VC

Later Stage VC

Private Equity

Venture Debt

DistinguishingCharacteristics

Q4.) What is Plan B for Your Company?

Things Rarely Go According to Plan

Many start-ups have to run a broken play

Program in “Optionality”

• Know “what else” this could become• Always be testing alternative things

– Business models; segments; product offerings

• Let passionate staffers pursue their pet ideas• Good place to use partners• Killing these off is OK too…

Q5.) What Outcome Do You Want ?

A.) The right one

King of my hill.ColbeckHillClimb Media ($10mm)$300k bootstrap

Get what the market gives you.PanosPluck ($70mm)$17m VC raise

Go big or go home.RosenblattDemand Media (Outcome

TBD)$355m PE raise

Many Factors Will Play A Role in the Answer

• Timing• Size of the idea• Financial partners• Quality of the team• Stamina• Your spouse

Be honest – and organize accordingly

Let’s Review the Test

• Why are you doing this?• Do you have the best crew?• Who would you take money from?• What is Plan B for your company?• What outcome do you want?