radical candour from a deep generalist
Of course I am on a semi digital De-Tox but need to update on my latest read. Probably one of the better books I have read in quite some time. Brad is a unique and gifted storyteller. I couldn’t put down The Everything Store
Such a history lesson and as an Apprentice VC – I find it all very inspiring.
Question:
I am doing a startup and need capital. I understand I need to raise from angels or friends and family and I am curious your thoughts on the friends and family part?
Answer:
Good one. My advice is to really think the friends and family part through. I normally see them as a last resort since if you take money from them and your startup goes south, which is quite probable, then these people may not want to be your friend anymore and at the next Christmas dinner you may find some disgrunlted family members as well.
I think it is best to first find incubator, grant money or a professional angel network since these groups might force you to come up with a better plan before funding since they have seen many startups. This would be better than potential F&F money where they probably can’t help you with your business or idea all that much. Then as you raise from more porfessional sources and your idea continues to live, coming to the F&F connections might be less risky.
Maybe you have a rich friend or family member and they are interested in funding startups and they want to help you, but make sure you do it all properly like any other investor. Don’t let is get personal. Use a proper investment vehicle like a note and be sure to have similar terms for all parties. Also stay away from loans or any thing that promises pay back as other investors come in. Nothing scares of institutional investors more than seeing a deal where early investors get to cash out with new money coming in.
Vivek, after trying to fix the gender diversity issues in tech, has now turned is attention to bashing Apple in regards to their India business. Here is his latest rant :: http://factordaily.com/apple-fail-india-iphone/
I love the catchy headline.
I was gonna dig into this one but many people beat me to it, but I think this is the best one :: https://nuclearbits.com/vivek-wadhwas-factor-daily-piece-titled-apple-destined-fail-india/
This dude is so full of crap now he is like the boy who cried wolf. No one listens.
I don’t watch his shows but have always loved Anthony Bourdain’s books. Kitchen Confidential
I do love hearing the inside story of people and this latest from Anthony on wealth, money, debt and enjoying life is pure gold :: https://www.wealthsimple.com/en-us/magazine/money-diary-anthony-bourdain
That was really the first time I started thinking about saving money. About not finding myself in that terrifying space, that uncertainty that goes back to childhood. Will the car get fixed? Will we be able to pay for tuition? In very short order, I contacted the IRS and I paid what I owed. I paid American Express. Since that time, I am fanatical about not owing anybody any money. I hate it. I don’t want to carry a balance, ever. I have a mortgage, but I despise the idea. That was my biggest objection to buying property, though I wasn’t in the position to pay cash.
Getting my first mortgage also freaked me out due to the debt load. I always borrowed for cars too and just figured it was about building credit worthiness. Fortunately I have never lost my shirt on a house deal. But I know so many people that became “house poor” or defaulted on a mortgage.
One of the wonderful things about my agent, Kim Witherspoon, is she always presents me with two options when approaching a business deal, particularly when it comes to books. She’ll say, ”Look, you could go with these guys and get a whole shitload of money upfront, or you could go with these guys, which is the morally right and loyal thing to do, and negotiate an amount of money that fits in with what we actually think you’re going to sell.” I like to make money for my partners.
It’s amazing to hear how he cares about everyone making money. Not just himself.
I’d like my daughter and her mom looked after, both while I’m alive and after. They shouldn’t have to worry if something bad happens, so my investments and savings are based on that. I’m super-conservative. Money doesn’t particularly excite or thrill me; the making of money gives me no particular satisfaction. To me, money is freedom from insecurity, freedom to move, time if you choose to make use of time. My investments advisor understands that I’m not looking to score big on the stock market or bonds. I have zero understanding of it and zero interest. Life is too short. I like a limited amount of mail, and a limited amount of conversations with people who make the investments. If the money’s not less money every time I look at it, I’m pretty happy. If it’s a little bit more, great.
That’s the best part for me. The family first mantra and the I want to have fun while I am alive. Life is too short – I need to constantly remind myself of that.
Sounds like a cool dude.
I ended Friday with more good news that I can’t share but before I had slept I read Term Sheet and Pro Rata.
SeedPlus happened to be in both.
Want to say thanks to the amazing SeedPlus team. We are just getting started.
Pro Rata :: https://www.axios.com/pro-rata-2278608696.html
Term Sheet :: http://fortune.com/2017/03/17/term-sheet-friday-march-17/
I’m a gonna lay low for weekend.
😂
Question:
How do you evaluate a company pitching to you?
Are there any critriea or specific metric you look for?
Answer:
These are always loaded questions since there is no one answer to them. It also depends on the company and the market and the team. Context is everything to be honest.
That being said at seed stage I, but I am sure my SeedPlus partners will have their own opinions – look for market, team and strategy. Market is super important since we only want to fund things that can go big and that means having a product that goes for a large adddressable market size. Team is huge. We look for a team that likes to be with each other, is open to being challenged, and appears to enjoy a healthy discourse peppered with honest feedback. Strategy is a big deal as well. I like to see that the team has clear thoughts around what they are trying to do, how they plan on winning and what they might do when things go wrong.
There is never one specific thing or metric but obviously if the product is launched then it is good to see stats that make sense and that clearly articulate what the team wants to show. It is also good to properly portray things – for example, don’t show me CAC is just your google adwords bill but calculate for me a fully loaded CAC. This is a big subject and one we hope to put more material out on at SeedPlus.
Question:
How can female founders be empowered by being aware of this obvious bias in the market?
Answer:
I assume you mean the obvious bias is that VC is too male oriented. As a man myself I think even trying to answer feels treacherous. Let me state the lens that I look through a bit before I even try. I have a daughter, I think about this problem all the time and I work hard to find female foudners to fund.
That being said I don’t think I can give you a good answer since my assumption is that folks you might be pitching too or talking to should do their best to look at you and your team and your idea for what they are. My best advice though would be to find the angels and the other founders and VC’s in your area who have expressed interest in defeating this bias. They are out there and they would be the best to help you deal with it. There are plenty of female founders who are kicking ass.
On facebook I follow some folks that are leading the #ladybadass movement in Asia. These ladies are kicking ass and taking names. I would reach out to folks like this and get their advisory on how best to find your personal empowerment.
Example here :: https://www.facebook.com/photo.php?fbid=10154248092125933&set=a.192639120932.141229.531860932&type=3&theater
Wrote this yesterday :: https://seedvc.blog/2017/03/13/good-read-from-fred-on-convertibles/
Term Sheet referenced this in rebuttal:
https://twitter.com/octal/status/840997956996202497
I don’t think Fred is saying never use them but I do agree that they can be used incorrectly. I think Fred is talking more about how they get overused and there are some seriously messy cap tables with rolling notes and no easy way to price anything or calculate dilution properly.
I think it goes without saying that there are clean cap tables and not so clean ones and in my experience the not so clean ones have a bunch of notes with no simple way of sorting them all out. This happens less with equity rounds.
I think there is a much broader discussion to have here around founder friendly techniques but also having to weave in doing stuff right for the good of all current investors and investors to come. Always a fine line.
Another awesome deck from Mark Suster and crew:
I must be behind but this is the first time I read something by Bradford. Good stuff.
Here is his latest :: http://www.bradfordcross.com/blog/2017/3/3/five-ai-startup-predictions-for-2017
Great read. Hard to argue with it and also we won’t know how right he is till later. We do see a lot of startups claiming to work on AI and when you dig in one finds very little AI at times. I also think the whole chatbot thing is overdone. I am still not using any. Not a one.
I use Evie a ton and would even if I had not invested in it. It solves a problem for me – managing my calendar. This is more NLP and machine learning than AI but in the same family. The product, no matter what buzzword it uses, must solve a real problem that people are willing to pay for. Many products are using something that they don’t need to build a solution that is in search of a problem.
Whether you have found product/market fit or not, it is important to work on a real market opportunity. Killer shit in search of a market won’t go far.
As I have said many times, I look for team, market and strategy. We can work together on the rest.
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