Let’s say you have an idea for a startup. How do you begin the process of finding cofounders and employees, creating a corporation, handing investors, growing the company, etc.? There are lots of details about building a startyp that are usually a mystery to the newly initiated founder. Usually you have to learn this stuff on the job, making mistakes along the way.
But not anymore. Last night I saw a 45 minute presentation by Mint CEO Aaron Patzer at a startup competition event called Juice Pitcher on the Microsoft campus. The event, which is put on by TheFunded and Vator.tv, put a handful of new startups on stage to show their stuff and compete for a top prize. Between pitches, Patzer took the stage and told the story of Mint, in detail. His company just sold for $170 million to Intuit.
Patzer takes the audience (and now you) from the beginning of Mint, and gives some incredibly useful device. He talks about the early days of Mint, where he lived on $30,000/yr and hired engineers at just a little more salary by offering them significant equity. He also says that, as a rule of thumb, every engineer in a pre-revenue startup adds $500,000 in valuation. Every business guy lowers the valuation by $250,000, he half jokingly quipped. In its earliest days, Mint was burning $150,000/year, he says, for 2 founders and 1 engineer/contractor.
Patzer also spoke about financial modeling, keeping costs low throughout the life cycle of the company, and Mint’s revenue model. He also gives suggested goals and milestones for each successive funding round. One interesting fact – today Mint, which is free, generates $30/year/user from various offers and value added services.
There are lots of additional details, including, for example, various hidden costs in financings (mostly legal).
If you are a startup founder, you’ll want to bookmark this and refer back to it. It’s absolute gold.