Last night before a crowd of some couple hundred budding entrepreneurs, investors, and professionals in the entrepreneur community, Mint CEO Aaron Patzer presented a step-by-step narrative on how he built his company in three years to $170 million target for personal finance giant Intuit.
In a moment of nonchalance, Patzer, who spoke at the Juice Pitcher event, hosted by TheFunded.com and Vator.tv, admitted to Adeo Ressi, the founding member of The Funded, that he sold Mint for cash to Intuit, so it didn't matter to him what happened to Intuit's shares.
Nonetheless, it's a great resource for entrepreneurs. Keep this article and video bookmarked and share with your fellow entrepreneurs.
Here are some of the highlights of the presentation, in which Patzer used Mint's actual numbers to suggest a model for startup-building:
- Phase 1: Once you have a mature idea, raise $100,000 from friends and family to build a prototype
- Phase 2: Prototype complete, raise $1 million and launch an alpha into the market.
- Phase 3: Once you have some traction, raise $5 to $10 million to scale up.
Phase 1 Expenses (1st $100,000):
- Founders: $30,000/year
- Engineering 1st hires: $30,000-50,000/year
- Office: $400/cube/month
- Tech: $10,000
- Legal: Deferred payments for 0.50 - 0.75% of company
Phase 2 Expenses (seed round):
- Salaries: $50,000 - $90,000/year ($450,000/year for 5 people)
- Overhead: +20% ($100,000/year)
- Legal: $25,000 + $2,000/month ($50,000/year)
Phase 3 Expenses (Series A)
- Salaries + Overhead: $200,000/year/person
- COGS: many one-time expenses add up to about $150,000/month
- Legal: $10,000-$50,000/month