Dave Morgan, founder (and $275 million seller) of Tacoda (to AOL) and newly named chairman of the Tennis Company, stopped by as a guest on Naked Media this week and told us what media entrepreneurs (or any) need to stay afloat, and have a successful business.

1. Control. Make sure the capital structure is such that you can keep control of the business, do the things you need to to make it grow, etc. Don’t go for the biggest valuation, but rather the right valuation. If the money you get is too big, and sets too-high expectations, the pressure to generate enough cashflow and create a large liquidity event (meaning get someone to buy the company at a high value) will be a lot of pressure that’ll hurt your ability to make choices you may need to ensure the health of the biz. Don’t take the biggest amount of money, take the best. Corollary: Don’t be the last investment in a venture fund, because then the cycle will be shorter, and they may need to have you sell in, say four years, rather than 7-10. You don’t need that pressure. In other words, it’s not just which venture (or other) fund puts its money behind you, it’s also which of their funds it is.

2. Hire slow, fire fast. Don’t rush to hire someone just to fill a position, because you need a body. And if someone is not working out, get rid of them quickly, because you probably can’t fix that. He said that after rounds of cuts at Real, his company previous to Tacoda (which was also sold for big bucks and became ad network Real 24/7), the remaining employees eventually did better, were more productive.
3. Always be thinking about the exit. Now, he acknowledged that a day earlier at ContentNext’s EconAds seminar he said one shouldn’t form a business thinking about the exit. But you do have to understand the mentality of the folks putting up money behind you. There are three ways to go: public offering, trade sale (meaning a company buys you), or shut down. (The math is such that it’s nearly impossible to generate enough cash to keep a business going to make more for the investors than if it were sold.)
4. Know your money’s timeline. If you take money from investors, such as venture capital fund, be mindful of the cycle. You don’t want to be the last investment in a fund, because they’ll be near the end of a 7-10 year cycle, and instead of having, say 7-10 years to get your business in shape to sell, they’ll need to create a “liquidity event” in maybe 4 years.
5. Organic growth is fine. Now is a fine time to start a business and grow it organically. IE, you maybe don’t want to go for all this funding, and instead start and grow it yourself.

We spent the first 25 minutes or so talking about his new gig at Tennis — how to make everything from Tennis.com to Tennis magazine to some tournaments and events into a much bigger, better business, all of which was very instructive for doing B2B media, to the enthusiast community in general. The show was live. Watch for the on-demand version.