Author, Investor, Speaker, Mentor
One of the tempting illusions about angel or VC investing is that you can relax once you’ve made the investment. After all, if you’ve picked the right startup, isn’t that 90% of the battle? Alas, this is just an illusion. In fact, once you’ve made an investment, it’s critical that you demonstrate your value to … Continue reading Why You Have To Be A Value-Added Investor
It’s brightly colored, and made from rendered animal skins and bones…. Nah, just kidding. (Not about the animal bones–that’s absolutely true.) Your startup is like Jello because it starts of in a liquid state, but undergoes a phase transition and becomes (more or less) a solid. When your startup begins, it is completely fluid. You … Continue reading How Your Startup Is Like Jello
Here’s another fascinating article from Bakadesuyo: http://bit.ly/19pAZ7P If you’re about to tackle an important challenge or task, there’s a simple 3-step process you can follow that, in just 30 minutes, can boost your performance 60%: “A recent study by Duckworth, Heidi Grant Halvorson, Benjamin Loew, Oettingen, and Gollwitzer asked a group of high school students … Continue reading The 3-Step Secret To Boosting Your Performance 60%
I try to give entrepreneurs a realistic view of their chances of startup success. Yet I’ve always relied on anecdote and example, rather than hard numbers. Now I don’t have to. Here is a set of definitive numbers from across the entire industry:http://nyti.ms/156D8RL “According to the data provided by Sand Hill, since 2003 only 6 … Continue reading The Real Odds of VC-backed Success
In his recent essay on “Startup Investing Trends”, the always insightful Paul Graham referred to the VC cosmological constant: http://bit.ly/13kaUV5 “There’s a rule of thumb in the VC business that there are about 15 companies a year that will be really successful. Although a lot of investors unconsciously treat this number as if it were … Continue reading The VC Cosmological Constant
The recent reports that Snapchat’s founders each took $10 million off the table during their Series B raised the usual debate about founder liquidity: http://bit.ly/11P65n1 On the pro side are the arguments espoused by one anonymous investor: “Founders get ‘rich’ now, and de-risk some of the startup. Doesn’t change alignment, just rewards them for their … Continue reading Addressing the founder liquidity problem
It’s not that complicated to build a success startup. Just build a profitable business while spending as little as possible. It’s not complicated, but it’s hard. I recently saw the news that Yahoo! had bought Xobni. Xobni was a noble attempt to tackle the email overload problem (xobni = inbox backwards). According to the stories … Continue reading Build a profitable business while spending as little as possible (the lesson of Xobni)
There’s one school of thought that tries to paint VCs as the enemy of the entrepreneur. The VC-haters cite a litany of evidence, ranging from the tendency of VCs to turf out founders to the pressure they put on startups to scale prematurely. There is no doubt that VCs–like the rest of us–make mistakes. But … Continue reading Why (it seems like) all VCs are assholes
It seems like it’s unfashionable these days for investors to worry about startup valuations. In my opinion, that kind of thinking is likely to lead to disaster for both investors and startups. Far too many people make the mistake of focusing on relative valuation. “This deal is a bargain in comparison to the other deals … Continue reading The reasonable startup valuation formula
Paul Graham has a great essay out in which he explains his view of both Y Combinator and the startup ecosystem. As usual, it’s a thoughtful essay with a lot of great points. But what I’d like to focus on are the numbers he provided on YC’s portfolio: http://bit.ly/13kaUV5 “Y Combinator has now funded 564 … Continue reading Y Combinator’s Startup Math