Both Sides of the Table

SEPTEMBER 22, 2012

I think I’ve read Paul Graham’s post on “ Startup = Growth ” three or four times now. And of course on Twitter I’ve seen the Tweets, ReTweets and superlatives on what a great post it is. Viewing the article through the lens of a venture capitalist there’s much to agree with under the mantra of “growth!” And when you read the article carefully it allows for a period of discovery in your business.

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This is going to be BIG.

SEPTEMBER 13, 2012

Tweet. Note: I led First Round's investment in Docracy in 2011, but I do not have any financial ties to the company and will not benefit or suffer, other than emotionally, based on the outcome of that investment. Docracy, born out of Techcrunch Disrupt's 2011 Hackathon, just brought legal negotiations into the cloud with their new Super Signing feature release.

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SEPTEMBER 23, 2012

Most entrepreneurs think that risk is just an “occupational hazard” that can be minimized or eliminated by a smart businessman. That way of thinking is simplistic and wrong. In reality, some risks are good and should be embraced for growth and a competitive edge, while others are bad and should be avoided completely. Traditional risk management focuses only on bad risks, and seeks to contain losses.

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Berkonomics

SEPTEMBER 20, 2012

Who is responsible for the vision that drives the company? This is arguably the primary job of the CEO, with agreement from the board. Many entrepreneurs after taking outside investment defer to their board for matters of direction that include setting the vision, as well as executing the plan. Here is a general rule: The CEO sets the sails and points the ship, creating the vision for the company.

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Tomasz Tunguz

SEPTEMBER 25, 2012

Yesterday, I spoke at Columbia Business School. We had a conversation about the role of incubators and accelerators (or the moniker of your choice) within the startup ecosystem. Given the volume of first time entrepreneurs and the broad growth of interest in entrepreneurship, I think these programs are invaluable. To entrepreneurs, these programs offer up to seven value propositions, listed in order of importance, as I see it.

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Both Sides of the Table

SEPTEMBER 27, 2012

This article originally appeared on TechCrunch. Recently I wrote a post arguing to make the definition of a Startup more inclusive than that to which Silicon Valley, fueled by Venture Capital return profiles, would sometimes like to attach to the word. Today I’d like to talk about what startup communities outside of Silicon Valley look like, how they emerge and what makes them take hold.

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This is going to be BIG.

SEPTEMBER 30, 2012

The other day, I noticed an eye-catching headline: "Internet Funding Boom Ends as Fast as It Began". It was from the Wall Street Journal--a publication I count on for emphasizing quality journalism over empty linkbaity headlines above hollow stories. Perhaps I need to rethink that. How else can you explain this headline matching a story about a professional social network still trying to explore revenues raising $17mm on an $80mm valuation?

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SEPTEMBER 9, 2012

Amilya Antonetti image via Entertainment Resource Group. It takes a great entrepreneur with a great vision to start a business, but it takes a collaboration of many people to make it a success. That’s where leadership comes in as a key ingredient, to drive the collaborative process to make the whole team better than the sum of the parts. I remember a book from a while back by Amilya Antonetti, titled “ The Recipe: A Fable for Leaders and Teams ” which illustrates the key concepts with stories an

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Berkonomics

SEPTEMBER 26, 2012

It happens. Boards are elected by the shareholders, sometimes with preferred shareholders holding seats by right of their investment. In that instance, often the investor selects the board member and the CEO goes along with the choice, mostly out of having no alternative at the time. Then there comes the first – or better yet the fourth – meeting of the board following the appointment of a new member.

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startup

Tomasz Tunguz

SEPTEMBER 29, 2012

Any number of challenges can arise during a startup’s initial years. Some of these changes could be major and may require rethinking strategy. Competitors enter your target market. New products are released into your market which undercut yours. Customer acquisition costs rise dramatically. If faced with these questions, it’s hard to know where to begin or how to structure an analysis to reach an answer.

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This is going to be BIG.

SEPTEMBER 26, 2012

A lot of people have talked about the need for NYC to have a PayPal--a multi-billion dollar exit that scattered on the rest of the community a bunch of experienced startup talent that scaled a company over time, as well as a host of new angel investors. The key to this, of course, is that PayPal had over 200 employees when it was acquired. As Shai points out , if you sell for a billion dollars and have 13 employees like Instagram, you're really not going to do much for the ecosystem.

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This is going to be BIG.

SEPTEMBER 19, 2012

In the early spring of 2009, the fundraising nuclear winter of the previous year hadn't yet thawed. It would be months before Foursquare's first round touched off a NYC venture frenzy. I was out trying to save my startup by talking to as many investors as I could. One particular investor pass--from someone we thought we had a good shot with--felt like a punch in the the stomach.

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Both Sides of the Table

SEPTEMBER 5, 2012

This article initially appeared on TechCrunch - with a minor update highlighted in red below. Ah. We’re back to discussing convertible debt again. This time by the efforts of Adeo Ressi to introduce a new kind of structure called “ convertible equity.” I applaud all efforts by people to take on this issue and especially be Adeo who – let’s be honest – was really the first champion of trying to make the VC world more transparent by launching TheFunded, which d

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This is going to be BIG.

SEPTEMBER 12, 2012

I get on a whole host of these tech blogger lists where PR firms just spam a whole bunch of folks trying to get people to write about their book/startup/event. It just creates a To Do in my inbox. It's kind of annoying because I write a personal blog. I'm not a journalist by trade so I'm really not an appropriate person to pitch in such an automated way.

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Both Sides of the Table

SEPTEMBER 10, 2012

You know the old saying about trust … “It takes years to build and seconds to destroy.” And once destroyed it is very difficult if not impossible to repair. You need to be the guardian of your own reputation. You need to constantly ask yourself whether your actions in rapidly scaling an online community are worth the potential downsides of destroying trust amongst your users.

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This is going to be BIG.

SEPTEMBER 10, 2012

I did the NYC Century Tour yesterday--a 100mi bike ride around the city sponsored by Transportation Alternatives where thousands of riders are circumnavigating the far reaches of the boroughs on two wheels. It was a great day and the weather couldn't be better. One thing that struck me is how diverse the cityscape is outside of Manhattan. Biking through the streets of Far Rockaway, it could not have felt further removed from dodging traffic down Broadway.

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Both Sides of the Table

SEPTEMBER 8, 2012

If you were on Twitter on Saturday you might have noticed a lively discussion with Dave McClure, Fred Wilson, Chris Dixon and myself. And a few others. Luckily there are tools like Storify – so you can actually see a synopsis here. I recently wrote about my views that startups rounds should be priced. If you do an uncapped note it’s bad for the investor.

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This is going to be BIG.

SEPTEMBER 25, 2012

I'm so excited to hear that Indeed.com, a company that Union Square Ventures invested in while I worked there, just exited for a reported billion dollars. Back in 2005, I was a lowly analyst at Union Square Ventures with a million product ideas that I'd blog about all the time. When you're on the VC side, you come up with a lot of ideas, because every company you see inspires three new things you wish someone would build across a wide variety of sectors.

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This is going to be BIG.

SEPTEMBER 7, 2012

I have figured out the ultimate VC fund strategy. I swear, its totally foolproof--guaranteed to bring superior returns. You can forget everything you've read everywhere else. Do what you're good at. It's that simple. There are a lot of people that artificially group together performance metrics for venture, and try to extrapolate successful stratagies from it.

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Gust

SEPTEMBER 2, 2012

Sergey Bin and Larry Page image via Wikipedia for Google. If you are a first-time entrepreneur, I recommend that you team with a co-founder with experiences, connections, and a skill set that complements, but doesn’t duplicate yours. Even experienced entrepreneurs need a partner to back up each other and improve fundability. The question is how to find that elusive perfect-fit partner.

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SEPTEMBER 30, 2012

David Cohen image via Kathleen Lavine, Denver Business Journal. Business incubators for sharing services were all the rage back in the days of the dot-com bubble (700 for profit, many more non-profit). About that time the bubble burst, causing more than 80% of them to disappear. Now they are coming back, and the best even provide networking, technical leadership, and seed funding, as well as investors waving money at graduates.

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startup accelerator accelerator entrepreneurs incubation 147

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SEPTEMBER 16, 2012

Steve Forbes image via Wikipedia. Presenting your startup vision as a founder to a potential investor, or presenting an idea as an employee to an executive, requires that you effectively communicate, or “translate”, the value proposition into terms that the receiver can fully understand and appreciate. If you fail, it’s your loss, not theirs, no matter what the reason.

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SEPTEMBER 13, 2012

It’s generally not a good idea for an initial investor to own more than 50% of a company (although there are always special exceptions), because the odds are that by the time the company is fully funded (and hopefully successful), the entrepreneur/founder’s equity will be reduced to such an extent that it will have effectively eliminated an incentive for him/her to continue building the company’s value.

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SEPTEMBER 5, 2012

How to finance a new seed-stage startup? Equity? Convertible debt? Convertible equity? As of August 2010, Paul Graham famously proclaimed , “Convertible notes have won. Every investment so far in this YC batch (and there have been a lot) has been done on a convertible note.” Yet in my little corner of Wonksville, Founder Institute CEO Adeo Ressi and Yoichiro “Yokum” Taku , a partner at my “alma mater” law firm Wilson Sonsini Goodrich & Rosati , created

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Gust

SEPTEMBER 20, 2012

Yes and No. The JOBS Act has several pieces, two of which are relevant here. The fascinating thing is that they allow for diametrically opposite activities! The key questions are: Who can you MARKET to? Who can you SELL to? Under the Crowdfunding provisions of the JOBS Act, a startup company will, for the first time, be able to sell shares of stock to anyone (that is, “the crowd”) once the SEC publishes the final rules for the program in January of 2013.

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