Both Sides of the Table

APRIL 6, 2014

Seek “disconfirming evidence” The strange thing about most reference calls is that by the time the hiring manager is calling she is often already pre-disposed to hiring the candidate. One obvious example is that HR can make a few calls that the hiring manager doesn’t make.

Technical Review 302

Technical Review Hiring Later Stage Employee 302

Both Sides of the Table

SEPTEMBER 29, 2009

This came in part due to the huge influx of money into VC but also because hedge funds and private equity shops with no VC experience wanted part of the action. The company had a huge burn rate but investors and management brought that under control by late 2008. disclosure: I am thankfully no longer on this board).

Burn Rate 263

Burn Rate Valuation Pre-Money Valuation Private Equity 263

Both Sides of the Table

SEPTEMBER 28, 2014

But the biggest thing to know is this: Companies who are scaling quickly in revenue and with a high gross margin often should invest as much capital in growth as they can manage responsibly because when you find a product / market fit and your company is growing at a very fast scale you want to capture market share before competition sets in.

Burn Rate 383

Burn Rate Balance Sheet .Net Valuation 383

Both Sides of the Table

FEBRUARY 23, 2015

He wants a chance at changing life’s circumstances with building equity value that might free him and his family from the rat-race of 529 accounts, property taxes, summer-school tuitions and even spending some cash on aging parents. He still has the dream. He has the hunger. I’m not saying it’s even desirable.

Technical Review 150

Technical Review Liquidation Preference Silicon Valley IP 150

Both Sides of the Table

MAY 19, 2010

Huddle allows users to maintain an interconnected network of secure online workspaces for file sharing, ideation, project management and virtual meetings. I don’t like going against Google Docs or against 37Signals for project management. Provides an enterprise collaboration and storage platform. 60k unique visitors in March 2010.

Partner 240

Partner New York City Cofounder Syndicate 240

Both Sides of the Table

SEPTEMBER 12, 2010

Many of the growth equity firms have had outbound dialing programs for years. Growth equity firms typically target profitable businesses that are often not technical in nature. Perhaps outbound dialing / emailing programs worked well for growth equity firms in their core business. These kind of companies were seldom startups.

Programming 294

Programming Entrepreneur Private Equity Equity 294

Both Sides of the Table

SEPTEMBER 23, 2010

Typical questions: What do you think of management? Convertible or equity? How well do you know them? Have you reference them? Have you looked at competition? How well financed is the competition? What is their market traction? How much are they raising? How much is soft-circled (committed)? At what valuation? Cap or warrants?

Entrepreneur 292

Entrepreneur Technical Review Stealth Valuation 292

Both Sides of the Table

MAY 23, 2010

a loan) that is later converted to equity at the time of the next financing. If no financing happened then this “note&# may not be converted and thus would be senior to the equity of the company in the case of a bankruptcy or asset sale. It starts as a debt instrument (e.g.

Startup 290

Startup Burn Rate Warrant Bankruptcy 290

Both Sides of the Table

DECEMBER 20, 2009

Trilegiant Corporation , (who is owned by Avis Budget Group (yes, that Avis & Budget), in turn owned by the private equity group Apollo Management ) does business as PrivacyGuard and has engaged in the most unethical of business practices I have come across in years. Hiding from something? What do you think?

Direct Marketing 263

Direct Marketing Private Equity Sacramento Marketing 263

Both Sides of the Table

AUGUST 14, 2010

This is a related post that will not only help you get the results you want more effectively but will also help earn the respect of your senior people (whether management or your board). As your senior manager I’m happy to help you any time you need. You always have a boss, whether you’re a mid-level manager, SVP or CEO.

Equity 342

Equity Hiring Developer Management 342

Both Sides of the Table

APRIL 14, 2010

management, founders, angel investors) get any money. It also gets the new investor concerned that management (common stock holders) will not be incentivized because they realize that the investors will take most of the money unless there is a big upside scenario. Deal with the small ownership allotted to management.

Venture Capital 289

Venture Capital Liquidation Preference Common Stock Dividend 289

Both Sides of the Table

APRIL 28, 2010

Summit is a hugely respected firm in Silicon Valley and a long-term “institution&# but they’re better known as more of a “private equity&# investor meaning that they do later stage investments in much larger companies that are profitable. What I found strange about this funded was the fact that it was led by Summit Partners.

Venture Capital 270

Venture Capital Cofounder Spain San Diego 270

Both Sides of the Table

NOVEMBER 11, 2013

I often advise startup companies not to try and pin all of your brand equity into an announcement. Dana was an investment professional before becoming CFO so it’s nice to have somebody with both investment perspective and fund management experience in charge of building out new services. A brand is a marathon, not a sprint.

Ireland 324

Ireland Jordan Portfolio Flash 324

Both Sides of the Table

JANUARY 21, 2010

You never got around to agreeing exact equity splits but you had many conversations about it. How to manage costs - One of the biggest frustrations that people have with lawyers are unexpected costs. I write about some of the lessons in my post on Startup Mistakes. In every firm there are A, B and C players.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Both Sides of the Table

JANUARY 1, 2016

You don’t have unlimited equity to dole out. I’ve spent hours this week reading about the firing of the head coach and personnel manager of the football team I support – The Philadelphia Eagles. What I’m talking about is making tough decisions. As a leader you live in a world with limited resources.

Leadership 150

Leadership Southern California San Diego Hiring 150

Both Sides of the Table

MARCH 17, 2010

Side note: LA seems to have had some success in mega deals led by private equity firms as evidenced by DemandMedia and Chris DeWolf’s latest company backed by more than $20 million in private equity. Recruiting will be different – You can build a great management team in LA. So it’s always a trade-off.

Silicon Valley 290

Silicon Valley Technology Los Angeles Southern California 290

Both Sides of the Table

MAY 13, 2018

The most important advice I could give you before you set out in fund raising mode is to understand that fund-raising a sales & marketing process and needs to be managed. You need to figure out how much time to spend with each prospect and you need to rigorously manage your time and the calendar. an investment in your company.

Term Sheet 332

Term Sheet Due Diligence Campaign Sales 332

Both Sides of the Table

DECEMBER 1, 2009

I advocate treating them like a co-founder in every way except when they join and how much equity they get. You might be great at networking and leading but bad at planning and managing. Are you a leader vs. a manager? - You may be introverted and need the more externally facing person. Are you technically inclined? -

Hiring 289

Hiring Cofounder Dilution Startup 289

Both Sides of the Table

OCTOBER 14, 2015

You can read it in VCs discussions about hedge fund managers, activist investors or the need to have dual-share voting structures. The truth is that the brutal reality of public markets is that they self correct much more quickly than our shitty little private equity illiquid corner of the universe.

Burn Rate 150

Burn Rate San Francisco Private Equity LP 150

Both Sides of the Table

JULY 10, 2010

Michael is a very accomplished corporate executive in his own right having run Sega Gameworks and helped IPO EuroDisney as well as having been on the founding team of DreamWorks SKG (where he helped them raise their first $900 million in equity). Is a super-simple online management and admin tool for real-world groups. We discussed: 1.

IPO 242

IPO Venture Capital Private Placement Cofounder 242

Both Sides of the Table

JULY 11, 2010

These are not to be confused with incubators like YCombinator or IdeaLab which look to invest in your company and take equity positions. I also had lunch there which was served buffet style with the rest of the office, which apparently costs $5 / day and you just let the office manager know in advance so they can plan numbers.

San Francisco 285

San Francisco Incubator Silicon Valley Startup 285

Both Sides of the Table

MARCH 31, 2012

Many MBA programs still cater too much to the needs of large, corporate management jobs or prepare students to enter big consulting companies or investments banks. Sales people aren’t always motivated only by cash – especially in early-stage business you need to focus on equity because cash won’t be plentiful.

Startup 319

Startup Early Stage Sales Cofounder 319

Both Sides of the Table

MAY 15, 2010

But when the finally convert the debt to equity the round gets filed with the SEC and thus journalists often pick up on it. AdReady – Develops software tools and management platform that assists content publishers and ad agencies with the creation of display ads. They also avoid Reg D. Primarily targets SMBs.

Stealth 285

Stealth SEC Advertising Accredited Investor 285

Both Sides of the Table

JUNE 5, 2015

” Today I want to talk about how a VC thinks about equity pricing on your round and particularly if you’re coming off of a convertible note. If you have 8 senior managers in place and I don’t think you’ll need as many people I might accept an option pool of 8% unallocated.

Pre-Money Valuation 150

Pre-Money Valuation Option Pool Post-Money Valuation Dilution 150

Both Sides of the Table

MARCH 11, 2010

Fail fast = quit and give up easy = spaghetti against the wall = no clear strategy going into your business = no ability / willingness to try and pivot as market conditions change = easy way out = today’s management mantra that will be laughed at in 10 years. Who started this meme? Should you take it? add a buffer.

Venture Capital 319

Venture Capital Startup Silicon Valley Warrant 319

Both Sides of the Table

OCTOBER 14, 2009

It’s just that many companies waste equity on advisory boards, pick the wrong advisers or set up advisory boards with the wrong expectations. As an entrepreneur you don’t want 5 investors on your board because then board decisions will be more representative of investor concerns than management concerns.

Advisory Board 215

Advisory Board Strategic Investors Venture Capital Later Stage 215

Both Sides of the Table

APRIL 14, 2012

You are either bought for stock or for equity. Strategic must be a hugely defensive move or a move that the management team of the buyer believes could drive a huge increase in future revenue to more than cover the costs of having acquired your company. Not as an enticement to get a buyer to pay up after the deal. Think about it.

Valuation 316

Valuation Balance Sheet Dilution Term Sheet 316

Both Sides of the Table

APRIL 25, 2011

The founders could reinvest this in growth (0% tax, focus on future equity growth) or take the profits of $12 million and divide amongst the founding partners. If you really want to do a product business then hire a professional manager for your services company, quit that job and focus 100% on your product company.

Silicon Valley 332

Silicon Valley IP Dividend Finance 332

Both Sides of the Table

SEPTEMBER 2, 2009

The VCs basically have liquidity in management fees along the way, in the sense they get paid decently along the way. But the day after you’ll wake up and see yourself more as a manager than an owner. Ironically our business started to perform very will by 2004 but by then management had lost the dream of a huge upside.

Founder 329

Founder Liquidation Preference Term Sheet Participating Preferred 329

Both Sides of the Table

JANUARY 31, 2011

One investor played chicken with me by threatening not to approve my next-round financing unless I gave him more equity. The management team wasn’t strong enough. And I had all the VCs play head games with me. He wasn’t willing to put in more money but he had “blocking rights.&# I had 10 days of cash.

Entrepreneur 384

Entrepreneur Startup Salary Egypt 384

Both Sides of the Table

MAY 5, 2011

These kinds of connections seldom emerge from middle management who view the immediate threats more than the long-run benefits. Steve Ballmer, Bill Gates and other senior teams from Microsoft need to want to promote local startups. But Jeff, Bill, Steve as well as Howard Schultz, the executive team at CostCo, etc. I have done the same.

Seattle 317

Seattle Silicon Valley Technical Review Los Angeles 317

Both Sides of the Table

NOVEMBER 8, 2010

They clearly have a very talented management team yet are clearly held back by the Innovator’s Dilemma from their shareholders that binds them. They raised $100 million from Providence Equity Partners at a $1 billion valuation and have thus proven that they understand that a degree of independence is vital for their success.

Video 292

Video Technical Review Advertising Distribution 292

Both Sides of the Table

JANUARY 22, 2011

One investor played chicken with me by threatening not to approve my next-round financing unless I gave him more equity. The management team wasn’t strong enough. And I had all the VCs play head games with me. He wasn’t willing to put in more money but he had “blocking rights.&# I had 10 days of cash.

Entrepreneur 176

Entrepreneur Startup Salary Egypt 176

Both Sides of the Table

JUNE 29, 2011

It’s as though we forgot the management mantra of the 90′s about “core competencies&# or the most common VC advice to entrepreneurs: Focus. As some of the last generation of startups have gotten bigger many VCs have also chased later-stage investments that were traditionally dominated by growth equity or mezzanine funds.

Venture Capital 296

Venture Capital Software LP Early Stage 296

Both Sides of the Table

OCTOBER 22, 2009

He’s joining you because your company offers him/her the hope of the big equity package but likely the step forward in his career that he’s been looking for. I was able to hire the former European head of sales for the largest document management player in the world. I had given him a small equity stake in my company.

Hiring 327

Hiring Startup Equity Sales 327

Both Sides of the Table

FEBRUARY 24, 2019

When an entrepreneur takes on investors who take equity (i.e. The board is where large equity investors get their representation. Founders on the other hand recognize that over time they are likely not to have complete control of the board of directors of the company they founded.

Warrant 187

Warrant LP Cofounder Founder 187

Both Sides of the Table

FEBRUARY 23, 2010

Because you’re a startup he cuts you a deal (these sales guys are so good at this to work for only $120k basic in exchange for some equity [no, I'm not sales person bashing - I think sales reps are the lifeblood of any company - I'm just offering my realistic sense of a sales person's salary negotiation strategy!]. yes, I'm joking.

Channel 293

Channel Startup Sales Partner 293