How to Build a Billion Dollar Startup Company

Tips for Startups and Investors

 

From the Billion-Dollar Startup Course

 

Startup investing course - Billion dollar startups, who, what, and how "unicorns" and startup companies are created - by startup investor/venture capitalist Ross Blankenship; learn how to invest in startups. The fundamentals of billion dollar startups and high valuation companies include a review of the people, execution, timing, and detailed financials that make these companies turn into billion dollar valuation unicorns.  

Like the S&P, Moody’s credit rating systems, or Morningstar research for ranking public companies, we built our own proprietary, private market investing formula and ranking of the next billion dollar startups. Until now, we have never released our proprietary formula; we’re sharing this for the first time because you deserve to know how venture capitalists think, and how you too can make money investing in the right startups. We score every startup we meet on a scale from 0 to 100 using the following investment formula.  

The following startup formula was released from the top selling book on startups and venture capital, titled "Kings Over Aces."

 

Before you make any investment in startups, ask yourself, the startup founders, and others, the following questions:

 

I.   People (See Chapter 2 of Kings Over Aces)

The fundamental questions: 

1.     Are the founders all-in? 

2.     Does the founding team have a hacker, hustler, and social media guru?

3.     Does the founding team have a potential "icon," i.e. the next Steve Jobs or Bill Gates?

4.     Would you trust the founders with a blank check? (Based on a thorough background & credit check)

5.     What experience have the founder(s) had with money?

6.     Do the founders listen to your ideas? 

7.     How many of the founding people are still on board?

 

 II.  Product (See Chapter 3)

The fundamental questions: 

1.     How much do you enjoy using the product?   

2.     What is the likelihood the product will be around 20 years from now?

3.     How favorably do customers speak about the product?  

4.     How big is the actual market for this product?

5.     Can you convince your biggest skeptic to buy the product?

6.     Do customers keep coming back to buy the product?

 

III.   Execution (See Chapter 4)

The fundamental questions: 

1.     Does the product create a need or "must-have-it" in businesses or consumers?

2.     Does the product spark memorable marketing conversations?

3.     Does the product empower a community of evangelists?

4.     Has the company become the thought leader, or the follower?

 

IV. Timing(See Chapter 5)

The fundamental questions: 

1.     Is this a revolutionary, first-in-class product or the most amazing upgrade to an old system?

2.     If it hasn't been done before, why hasn't it? 

3.     Does the startup have an exit strategy: either staying private and being acquired, or having an Initial Public Offering (IPO)?  

 

 V.  Financials  (See Chapter 6)

The fundamental questions:

1.     How soon will the startup make money?

2.     What's the startup's valuation?

3.     What equity stake will you obtain and is it enough to stay interested?

4.     Will your investment help allow for at least 18 months of sustainability? 

5.     If there’s an exit, what’s your potential upside?

Angel Kings' Billion Dollar Cybersecurity Fund - AngelKings.com

Angel Kings' Billion Dollar Cybersecurity Fund - AngelKings.com

 

We always ask tough objective and subjective interview questions; and we always calculate a “1 to 100” startup score. To learn specific scoring ranges for each question, visit AngelKings.com.

 

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There’s also another part of the decision making process above that’s not mentioned: it’s called your gut feeling or better known as “intuition.”  Whether you’re a card player, investor, doctor, lawyer, or any other profession, you often rely on your intuition in cases where things don’t add up quite right or you don’t have enough information to make an informed decision. In fact, when you’re investing in startups, you won’t have the same publicly released information as you would investing in a company listed on the NASDAQ or NYSE; thus, you have to be more logical and patient in your investment strategy. You need to use your intuition less often in startup investing before writing a check. After all, for every startup success story you’ve heard where someone invested in a “billion dollar” idea because of a purported gut feeling, there are thousands more who lost their money because their gut was dead wrong. 

 

This is why the Angel Kings’ investment formula is important for startup investors and venture capitalists; it makes important decisions more reliant on facts than intuition. Use as much of the formula as you can, ask the questions in the following chapters, but if there’s a missing piece that doesn’t add up to our 90 score… you’ve got to be willing to say “no.” In the startup world, it’s about saying “no” more than saying “yes” that will lead you to higher returns on investment.     

 

As in law, your burden of proof for investing in startups is beyond a reasonable doubt. And thus, our formula too is geared towards investing in companies that score a 90+ or more before we would ever say yes to invest. 

Learn and get insight into how to create a billion dollar company with our venture capital and startup course today.

 

Get 7 Inside Tips on How to Build a Billion Dollar Startup:

 

  Learn how to create a billion-dollar company in the book "Kings Over Aces."

 

Learn how to create a billion-dollar company in the book "Kings Over Aces."

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