Court Lorenzini is a true serial entrepreneur. With several successful exits under his belt, including building one company with a market cap of over $11B, he has certainly created an impressive portfolio of startups.
On the Dealmakers Show, Lorenzini talked about growing up in the bay area, how to validate your startup ideas, and how long you should stay with your startup. Plus, strategies for gaining early credibility and pushing growth, and the power of knowing your future revenues
Listen to the full podcast episode and review the transcript here.
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Being Born Into The Bay Area
Court Lorenzini had the amazing experience of being born in Silicon Valley.
His father may be one of the original founders of Silicon Valley. An angel investor and venture capitalist.
The group he was a partner of would get together at each other’s homes each month. They would host a dinner for the others, and then over drinks and dessert, would have an entrepreneur come in and pitch them.
That meant that as a child, twice a year, he would get to sit in and listen to the pitches, the following debate about the investment opportunity. By the time he was in high school, he had been a part of dozens of pitches and valuations by VCs.
His curiosity and ambition to advance his career took him to study engineering at Duke, then at Stanford and Berkeley.
After graduating, Lorenzini had the chance to move to Switzerland and work there. An experience that he still counts as one of the greatest of his life.
On returning from Europe, he joined Cisco. Still, a relatively young company that had recently gone public. During the time he was there managing software development, they saw sales grow from $200M to $4.5B, in just four years. Making them one of the fastest-growing companies in history.
It was a place where he felt he could learn about management, leadership, hiring, and going fast.
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Building Your Portfolio Of Startups
Court says that he had always aspired to starting his own company. It was when he ran back into a friend from college who had been working at Microsoft, and they began talking about what was next that they decided to team up and start something together.
He moved up to Seattle to get to work on it and still lives there in the Northwest today.
Court’s first startup was what he describes as one of the very first eCommerce companies. Launched right around the time Jeff Bezos began doing his thing with Amazon.
After selling this first company, he spent some time on the other side of the table at a venture capital fund. In addition to valuing companies, he also jumped in to save some of those needing help. He realized that he really loved being an operator.
His next company was Docusign. Which came about from acquiring the IP and name from another business. It clearly turned out to be a huge success. Not only going public but at one point reaching a market cap of the north of $60B.
Among the factors that made it so successful was being able to get cash from its customers upfront. So they had cash flow. Having a very low churn rate meant a high long-term customer value. Which made it possible to raise a lot of funding over many rounds, and still have predictable revenues.
Landing Microsoft As A Customer & Starting DocuSign
They also landed Microsoft as an early customer. Providing great credibility for pitching and selling to other customers. Among those was the National Association of Realtors. Which plugged in the technology as a white-labeled product to their over two million members. That provided ongoing growth.
Still, even having grown that company to such a huge valuation, which now has around 8,000 employees, Court says that he is really most proud of the corporate culture, which has led the company to be ranked as one of the best places to work.
His third company focused on licensing IP. Which he says turned out to be a good business. Though perhaps not as famous as Docusign.
The fourth startup was definitely more of a learning experience than a huge win. Even though the company was growing at 50% a month, their reliance on one huge customer ended up finishing them off. Within just three months of that customer finding a cheaper alternative, they were out of business.
Lorenzini told the Dealmakers audience that according to his calculations, the optimal amount of time for a founder to stay with a startup is five years.
In turn, this allows entrepreneurs to build perhaps five startups over their careers. A portfolio if you will. Like from an investment perspective, it greatly increases the odds of overall success, one of those being a big outcome.
He has applied this to his own ventures. Now embarking on his fifth venture.
Court Lorenzini loves working with entrepreneurs, and at the early stages of companies. Over the years of investing, he has found that the majority of failures all come back to the founding team.
So, his latest venture is focused on helping founders connect, more efficiently and with purpose, for more effective teams. No matter if this is right at the beginning, or a few years in when someone else needs to be added to the executive team.
Storytelling is everything which is something that Court Lorenzini was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Listen in to the full podcast episode to find out more, including:
- How to qualify your business ideas before you start
- The benefits of greater visibility into your income streams
- More lessons Court has learned through starting and scaling five business