Both Sides of the Table


Recruiting. It is the bane of every startups existence because it takes up so much time, it is so competitive to sign people and it feels like unproductive time because it’s not moving the ball forward on product, engineering, sales, marketing, biz dev, fund raising. It consumes time and energy and the payoff doesn’t come for a long time.

But of course great teams build great companies and great startup leaders know that they must always be recruiting.

Yet most startup companies I’ve ever worked with or observed make one crucial mistake: They assume that their recruitment process for a candidate is over when that person accepts his or her offer. The truth is the process isn’t over until after the employee starts with the company, updates her LinkedIn profile and emails all her friends.

In fact, it’s worse than that. The moment your future head of sales, marketing, product or even junior developer says “yes” is the moment you’re most vulnerable of losing them. I’ve written about this before relating to any sales process – You’re Most Vulnerable After You’ve Won a Deal – and the same is true in recruiting.

Recruitment is war and the enemy (people competing for talent) won’t accept defeat easily. Don’t fight 90% of the war. You must win.

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When VCs Play Defense

When VCs Play Defense


Posted on Sep 18, 2014 | 0 comments

Somehow the world seems to be spinning faster these days than just a few years ago. The frantic pace of technology cycles, the amount of tech news, the blogs, the conferences, the demo days, the announcements, the fundings, the IPOs. It’s exhausting. Perhaps unsustainable.

It got me thinking about the advice that I often give to new VCs. For years I saw myself as the new guy in VC but then you wake up one day and realize that 50% of your peers have been doing it for less time than you and time has moved on.

Any longtime readers of this blog will know that I often try to simplify complex ideas into a simple parable that is easier to remember to set the tone of one’s behaviors. Lines, Not Dots. Attitude over Aptitude. Building Startups for Basecamp. And so forth.

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Bad Notes on Venture Capital

Bad Notes on Venture Capital


Posted on Sep 17, 2014 | 0 comments

This week. On the phone …

Me: So, you raised venture capital?
Him: Yeah. We raised a seed round. About $1 million.
Me: At what price?
Him: It wasn’t priced. We raised a convertible note.
Me: With a cap?
Him: Yes, $8 million.
Me: Ah. I see. So you did raise with a price. It’s just a maximum price. You’ll find out the minimum when the next round is raised.
Him: Huh?

Last week. At an accelerator …

Me: Raising convertible notes as a seed round is one of the biggest disservices our industry has done to entrepreneurs since 2001-2003 when there were “full ratchets” and “multiple liquidation preferences” – the most hostile terms anybody found in term sheets 10 years ago. Convertible notes have both features in them but for some reason entrepreneurs don’t understand it. It’s like we need a finance 101 course for entrepreneurs
Him: But when I raised my first round we didn’t know how to price the company. There were no metrics. So a convertible note was easier.
Me: Ok. Well. How will you price the next round? Your A round?
Him: On metrics. We’ll have some proof points by then.
Me: Cool.

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Venture Capital is a tricky industry. If you’re funding the same stuff as everybody else and if you started your activities when the clues were obvious you’re much less likely to drive enormous returns.

When Fred Wilson funded Twitter I guarantee you it wasn’t obvious that it was a billion dollar+++ idea. Far from it. Many questioned whether it could survive under the fail whale, inevitable competition from Facebook, founder fighting, fights with 3rd-party developers let alone become a revolutionary business that could make money. Lots of it. He couldn’t have imagined power users would be global political figures, dictatorships, small factions of people standing up to the Iranian army or every sports figure & celebrity in the world.

It was an early and smart bet.

When the early teams: angels, lowercase capital & first round capital funded Uber they had no idea it would be one of the most revolutionary ideas of our time. I know – I was there when the first people debating funding it at less than a $5m valuation.

Airbnb? Ha. Almost nobody believed and now look at it.

Drones. Bitcoin. Online education. VR. Palantir.

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I wrote a version of this post four years ago but given the hectic nature of today’s tech markets I thought it was worth revisiting and updating.

Canceling meetings is a part of modern day life.  I seem to get so over programmed that if I ever want to have a “break-out” unplanned trip somewhere I seem to have to reschedule meetings. Not fun, but a reality.

People reschedule meetings with me on a regular basis, too.  If done correctly I never have any problem with it at all.

When you do need to reschedule a meeting make sure to put yourself in the other person’s shoes.  Give reflection to what inconvenience you may be causing.  Make sure you’re mentally aware of whether they might have made special plans around your meeting.  Basically, don’t be cavalier about rescheduling meetings.

Let me give you an example.  A couple of years ago an entrepreneur had requested a meeting with me to present his business.  A friend that I respect had introduced me and asked me to meet with the guy.  I always try my best to take meetings like this since my friend had clearly committed some political capital to his friend in saying he could help him get a meeting.

The meeting was set for Wednesday, May 8th at 11am.

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