Both Sides of the Table

MAY 28, 2018

There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. Founder: “$8–10 million” VC: “What’s your current burn rate?” Founder: “$250k / month.” Founder: “Um. Why are you raising so much?” Let me check my plan.”

Burn Rate 247

Burn Rate Valuation Pre-Money Valuation Dilution 247

Both Sides of the Table

FEBRUARY 6, 2013

Quick summary: Be careful not to have too many co-founders. I don’t think VCs care as much about co-founders & economics as people think. Equally – a great VP Finance can be leveraged well to take on finance, legal, HR and much of the operational tasks. For the wrong reasons. Limit the number of VCs.

Cofounder 388

Cofounder Early Stage Startup Silicon Valley 388

Both Sides of the Table

MAY 9, 2018

I left the meeting and had to attend a 3-hour board meeting where two founders have been fighting and each want the other one fired. But your co-founder had been senior at one of the big enterprise software companies and if I remember correctly American Express had run a big pilot with you. Some were interesting, some weren’t.

Software Review 381

Software Review Churn Rate Due Diligence New York 381

Both Sides of the Table

FEBRUARY 12, 2019

why the hell has seed financing declined so much in the past 3 years?? And this era ushered in by Amazon changed everything from the age of founders to the skill sets required to the structure of the VC industry and even to the layout of cities (yes, I would proclaim that boldly that Amazon AWS affected city development).

Venture Capital 328

Venture Capital Technical Review Seed Stage IPO 328

Both Sides of the Table

OCTOBER 19, 2014

I first met Andrew Stalbow , the founder & CEO of Seriously in August of 2013. and Petri was co-founder and head of creative at Remedy Entertainment that launched the hit PC games Max Payne and Alan Wake. By September 26th we had submitted a term sheet which was signed on October 4th and financing was closed in less than 30 days.

Technical Review 373

Technical Review North America Los Angeles Cofounder 373

Both Sides of the Table

AUGUST 14, 2017

I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders. But unlike the popular press reporting of this conflict — 80% of the time it is founder-to-founder conflict and not investor-to-founder conflict.

Cofounder 217

Cofounder Stock Options Equity Technical Review 217

Both Sides of the Table

NOVEMBER 14, 2017

As the idea went from innovating on software & systems to launching a company to rolling it out in the field brought on Rahul Gandhi as his co-founder to physically launch the company. Sam & Rahul have worked closely together on “innovate & operate” since the earliest days of MakeSpace. Seriously, this happens.

Operations 286

Operations New York City Technical Review Startup 286

Both Sides of the Table

NOVEMBER 29, 2014

This week I wrote about obsessive and competitive founders and how this forms the basis of what I look for when I invest. And that’s what differentiates founders and early employees. So even after raising a $16 million A-round I still paid myself a paltry salary. So I did, in fact, invest in myself. They choose a different path.

Founder 409

Founder Salary Startup Early Stage 409

Both Sides of the Table

JUNE 30, 2016

Amongst the most often asked questions I get from founders is, “How much money should I raise?” Reflexively founders want to raise as much money as they can because they figure it will give them more resources, better chances of competing and a longer runways before they have to do the often painful job of asking, yet again, for money.

Pre-Money Valuation 292

Pre-Money Valuation Valuation Early Stage Startup 292

Both Sides of the Table

MARCH 24, 2014

Helping companies get to next financing round successfully: I was just beginning this phase in Sept 2010 and said so. I’ve now been involved with many other successful foll0w-on financings. Sourcing high-quality leads : 9/10. Working with early-stage teams : coaching, mentoring, setting strategy, rolling up sleeves: 9/10.

Los Angeles 387

Los Angeles Intellectual Property LP Venture Capital 387

Both Sides of the Table

APRIL 26, 2016

The key to being able to run a business that isn’t yet profitable (on operating margin) is availability of capital to finance losses and preferably at a cost that isn’t too punitive to the founders and employees. Sustaining short-term losses is all predicated on ability to finance the losses through venture capital or other means.

Metrics 150

Metrics Cost Acquisition Startup 150

Both Sides of the Table

MAY 19, 2013

My internal compass has always steered me strongly toward the belief that founders who can scale with their startup companies are better to back that founders who eventually need to hire a CEO. Very few founder CEOs go into the job ever expecting to give up their seat. We set out to find Jonathan’s “co-founder.”

Technical Review 303

Technical Review Cofounder Analytics Founder 303

Both Sides of the Table

OCTOBER 11, 2016

We then help surround founders with other talent who want to join important causes but don’t have the startup idea themselves. We help founders through difficult moments, we help coach, we act as sparring partners, we help them resolve conflicts when they’re fighting with co-founders and we help them deal with adversity as well as successes.

Venture Capital 150

Venture Capital Fractional CTO Cofounder Early Stage 150

Both Sides of the Table

SEPTEMBER 10, 2021

And the loosening of federal monetary policies, particularly in the US, has pushed more dollars into the venture ecosystems at every stage of financing. What Has Changed in Financing? They might be ideas they hatch internally (via a Foundry) or a founder who just left SpaceX and raises money to search for an idea.

Pre-Money Valuation 471

Pre-Money Valuation Valuation Venture Capital Early Stage 471

Both Sides of the Table

MAY 4, 2013

Should I trust my instincts for founders and products or should I be more focused on the market size or business plan? ” As far as “terms” go I’m 100% aligned to have the most vanilla, founder-friendly terms I can. And I listen to the reasons their co-founders quit their well-payed job to join them.

Early Stage 361

Early Stage Deal Flow Investment Bankers Technical Review 361

Both Sides of the Table

JUNE 22, 2011

I recently spoke at the Founder Showcase at the request of Adeo Ressi. I said that at the Founder Showcase, too. And for many of these they were (over) funded 7-10 years ago and don’t necessarily all represent great returns for investors or founders. Or worse yet they may never get financed. Have a cushion.

Saudi Arabia 309

Saudi Arabia Valuation IPO Technical Review 309

Both Sides of the Table

MAY 2, 2015

Clearly the founders and senior executives of a company are the most valuable resources and their time should be maximized on the most valuable tasks. I watched Ophir Tanz achieve much in his early days at the Founder & CEO at GumGum, which has now become quite a large business. I have written about the next phases many times.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Both Sides of the Table

SEPTEMBER 29, 2013

” From the hyperbolic Jason Calacanis weighing in that “The petty VC’s did everything to deride [Naval, the co-founder of AngelList]” as though the industry was collectively s g its pants that AngelList was going to put us out of business. founder fighting. strategic direction. That would add too much overhead.

Syndicate 356

Syndicate Syndication Cofounder Early Stage 356

Both Sides of the Table

JUNE 28, 2018

My friend Michael Broukhim, founder & co-CEO of FabFitFun and I recently had a catch-up meeting for 3-miles on the Santa Monica “Bird Trail” No company has ever elicited so many questions by friends, colleagues, entrepreneurs, fellow VCs and journalists as has Bird, the company that pioneered the electronic scooter as a service market.

San Francisco 256

San Francisco Valuation Technical Review Los Angeles 256

Both Sides of the Table

MAY 4, 2013

Should I trust my instincts for founders and products or should I be more focused on the market size or business plan? ” As far as “terms” go I’m 100% aligned to have the most vanilla, founder-friendly terms I can. And I listen to the reasons their co-founders quit their well-payed job to join them.

Deal Flow 347

Deal Flow Early Stage Investment Bankers Technical Review 347

Both Sides of the Table

JANUARY 6, 2014

When you first start your company and raise initial venture capital your board probably consists of 1-3 founders and 1-2 VCs. Most experienced VCs won’t push you to give up founder control at this stage of the business nor should they. Founder’s perspective. You’ll get empathy. Experience. Relationships.

Technical Review 325

Technical Review Early Stage Software Review Los Angeles 325

Both Sides of the Table

OCTOBER 12, 2014

In the old days there weren’t many fights about whether angels would take their prorata rights in financing rounds. Have you noticed the increase of founders selling their personal stock in what is known as a “secondary?” That is the most founder friends AND angel friendly way of doing it that I have found.

Technical Review 336

Technical Review Later Stage Early Stage LP 336

Both Sides of the Table

OCTOBER 30, 2014

She had raised seed funds from a who’s who list of investors including Andreessen Horowitz, Founders Fund, Marissa Mayer, Mark Cuban, Troy Carter and so on. Through many meetings discussing strategy, approach, recruiting, financing, etc. And finally it comes down to the good old instinct test.

Technical Review 418

Technical Review Software Review Due Diligence CTO Hire 418

Both Sides of the Table

SEPTEMBER 13, 2011

You have two founders and it was agreed that one would get the CEO role so the other needs to call themselves president or COO. They will often run all of the daily reports into them covering off for finance, sales, marketing, biz dev & HR. I was the CEO of my startup and my co-founder was the president.

Technical Review 325

Technical Review Startup Cofounder Due Diligence 325

Both Sides of the Table

MAY 27, 2013

In this period (less than 2 years) he has brought on incredibly talented senior execs is sales, marketing, product management, client services, finance, vp engineering and more. It consists of a highly intelligent and opinionated founder – Nick Halstead. In his spare time he raised nearly $30 million. It is really working.

Advisory Board 365

Advisory Board CTO Hire Fractional CTO Los Angeles 365

Both Sides of the Table

JANUARY 22, 2014

When you look at a deal so much of what you’re trying to understand are the skills, resiliency , work ethic, motivation and team dynamics of the founders. Nothing blows up great opportunities faster than founders who are constantly fighting. I’ve seen other VCs who seem to never have time to get their hands dirty.

Portfolio 364

Portfolio Chicago Sales Incubator 364

Both Sides of the Table

SEPTEMBER 22, 2012

“Why do founders want to take the VCs’ money? Founders will continue to take the “growth at all options” path that leads to privacy & trust creep at places like Quora. Growth, again. The constraint between good ideas and growth operates in both directions.

Silicon Valley 390

Silicon Valley Venture Capital Startup Technical Review 390

Both Sides of the Table

JULY 16, 2010

So super angel and seed funds are proliferating – As a result there has been an explosion in the number of amazing early-stage investors such as Softtech VC , Floodgate , Felicis Ventures , K9 Ventures , OATV , Lowercase Capital , Founder Collective , and many, many more. Nobody understands this better than First Round Capital.

LP 311

LP Technical Review Early Stage Silicon Valley 311

Both Sides of the Table

JULY 1, 2010

This applies to both founders and to VC’s that work with them. I spent a ton of time with the CEO and VP Finance understanding the businesses, its customers and its operational challenges. But I work hard not to “skip&# below the CEO or founders.

CTO Hire 308

CTO Hire Management Technical Review Part-Time VPE 308

Both Sides of the Table

JANUARY 26, 2010

I wrote a blog post about being hands on where I argued that startup founders need to be hands-on or in my words, “you can’t run a burger chain if you’ve never flipped burgers.&#. It’s different when you’re co-founders and one person gets the title COO. Who does finance report to?

Entrepreneur 286

Entrepreneur CTO Hire Cofounder Early Stage 286

Both Sides of the Table

SEPTEMBER 18, 2014

It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. I know how to structure around that to protect the founders from getting screwed on a multiple liquidation preference.

Venture Capital 417

Venture Capital Liquidation Preference Valuation Term Sheet 417

Both Sides of the Table

SEPTEMBER 8, 2010

Howard Lindzon weighed in with his comments : “As a CEO of a venture backed business myself and founder of many others, I would add one thing… Thick Skin. I have been involved as an investor in many CEO / founder disputes including many that are not in my portfolio. If you fail, you need to start all over.

Ireland 319

Ireland Sales Bankruptcy Germany 319

Both Sides of the Table

NOVEMBER 29, 2010

Justyn Howard, founder of Sprout Social has a blog post that he’s written about his experiences of migrating from scrappy tools to more efficient ones (i.e. And this is especially important since the people who get sucked into this admin the most are the founders – the people who you most want focused on high-value tasks.

Warrant 333

Warrant Germany France Cost 333

Both Sides of the Table

FEBRUARY 25, 2019

Here are some observations I have from this exposure: If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. The founders of a company are fighting. It sounds obvious, I know.

LP 269

LP Startup Burn Rate Stock Options 269

Both Sides of the Table

FEBRUARY 19, 2019

Startups that are backed by professional financial investors almost always have a Board of Directors that consists of some set of founders, investors and sometimes independent directors. These are truly protective even though sometimes founders find them to be an unwelcome level of approval required. hiring & firing the CEO.

Startup 204

Startup Dilution Government Stock Options 204

Both Sides of the Table

APRIL 10, 2014

The founders are (or should be) the most valuable resources in the company and scaling implies that you bring in others to help accomplish tasks that allow the founders to get more leverage. In some cases this is about getting routine tasks off of the founders plates. These things don’t happen by themselves.

Startup 381

Startup PR Finance Hiring 381

Both Sides of the Table

AUGUST 2, 2014

Like inside bridge rounds where investors want to protect themselves from the company getting sold prior to the next financing and leaving the bridge funding without adequate returns. Surely there is some amount of extra returns that will get set aside for founders – but what is right and what is fair?

Cap Table 346

Cap Table Cofounder Stock Acquisition 346