Founders and Fundraising
How Important Is Your Location When You’re Raising Money?
I think this Marc Andreessen quote says it all about the importance of a startup’s location regarding fundraising: Location risk — where is the startup located? Can it hire the right talent in that location? And will I as the VC need to drive more than 20 minutes in my Mercedes SLR McLaren to get…
Read MoreHow Do You Manage Your Costs Early On?
“Are you personally signing every check?” Bill asked me at dinner. I had worked for Bill years ago. Bill was seriously old school in his approach. “Yes, I am,” I replied. “That’s good,” he said. “That’s an important tool for you to keep control of the spending.” Bill was right. Signing every check was important.…
Read MoreHow Hard Is It To Be An Entrepreneur?
Being an entrepreneur is easy. Every day people decide to start up businesses. And voilà, you are an entrepreneur. And voilà, most of these new entrepreneurs will fail. So why do so many entrepreneurs fail? Let me click off the reasons, stream of consciousness style: A. You haven’t validated your business idea. I’ve talked to…
Read MoreWhat Should You Do When A Cofounder Quits And Holds Your IP Hostage?
I know the pain too well of cofounders quitting. I had two cofounders (“Jim” and “John”). I was the CEO, Jim was the marketing guy, and John was the engineering guy. We had worked together previously, and we understood the plan and direction we were going in. We started pitching VCs after working on the…
Read MoreHow Important Is It That Founders Have Over 50% Equity?
I think the question implies that the founders need to protect themselves from getting screwed, so having 51% ownership means they can’t be outvoted. Let’s say you start with 51%. Then you raise money and over time your stake is diluted to 20%. What are you going to do? Here’s the reality: There is always…
Read MoreHow Can I Get A Fortune 500 Executive To Be An Advisor?
A person is not great just because they are a COO or a CEO. They are no better or smarter than you are. That being said, treat this person (and all people) with respect. Let me give you two simple tips for how to reach out to a potential mentor: A. You have to give…
Read MoreShould I Work With My Best Friend As A Cofounder?
I had a very close friend who was a co-founder of my company. Here’s what happened: “You have an EQ of zero!” Ken yelled at me. “What the hell is an EQ?” I asked. “Perfect!” Ken screamed back. Then he hung up the phone. Those were the last words Ken ever said to me. Just…
Read MoreIs It Good To Approach Multiple Investors At The Same Time?
YES! Absolutely go to multiple VCs in parallel. I was fortunate to be an Entrepreneur in Residence (EIR) at a leading Bay Area VC. I learned something very important: A VC will invest in one company for every 100 face-to-face meetings a partner takes. The only fighting chance you have is pursuing multiple investors. My…
Read MoreWhat Are Some Good Questions To Ask A Potential Cofounder?
I had known and worked with one of my co-founders for over twenty years. Two of my co-founders came through recommendations of other co-founders. Another co-founder and I worked together and had known each other for about nine years. The one thing all my co-founders had in common was they all came through trusted sources.…
Read MoreWhat Do VCs Look For In A Pitch?
Reid Hoffman, founder of LinkedIn and VC at Greylock, has a great post on pitching What I Wish I Knew Before Pitching LinkedIn to VCs. My own two cents based on my experience is: A. Think visually. VC’s like graphics, not text, so don’t overload your presentation with text. B. Grab your audience in the…
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