The Three Ways VCs Come to an Investment Decision
As a VC generalist, it is tough to identify great opportunities. By definition, being a generalist means you are an expert in nothing. This post is not about the importance of being a VC generalist vs. a specialist. I covered that topic in another blog. So how does an investor get comfortable with different markets, […]
Compounding Risk Unnecessarily
Investing capital in early-stage companies is risky. There is so much that can go wrong in a company’s lifecycle that can make it a zero. The risks fall into several categories: execution, market, competitive, technology, and ad infinitum. As a starry-eyed founder whose job is to be visionary, it is difficult for them to stop […]
Soft Stuff is the Hard Stuff: Loving Your Customer
I recently spoke to an old friend who was a senior leader at an early-stage software company. He informed me that he had just left his job. Leaving the position was difficult for him as he enjoyed the customers and the value proposition the company said they were providing. His main complaint was that he […]
Why I Hate the Term "Coachable Founder"
I hate it when VC’s say that one of their criteria is that founders need to be “coachable.” That infers there is a natural hierarchy of authority and roles. I would be foolish to think that I would immediately have this incredible feedback to impart to the founders as someone who finances a company. I […]
Push vs Pull Products
One characteristic of evaluating products and ultimately funding opportunities is whether the product is “a push or a pull.” Like every evaluation technique I use, I try not to think of it as binary but on a scale with push and pull on each side of the spectrum. A pull product is a product in […]
Slow Road to Product-Market Fit
I recently had a conversation with a couple of different early-stage founders regarding product-market fit. These founders had created mission-critical platforms that required serious adoption/implementation and behavior change to be used with its intended applications. The management teams of these companies were discouraged by the slow traction of their product. It seemed that they were […]
3 Reasons Why SAFE Notes Can Ruin Your Company
SAFE notes are like tattoos – once you have one done, you keep wanting more! I have seen an abundance of rounds funded on SAFE’s going up to $3M in capital. Although a very efficient way to raise money from a timing and expense perspective, SAFE’s can be a detriment to founders and companies for […]
My Investment Heuristics When Evaluating Founders
I often find founders frustrated when I pass on opportunities they may feel fit my investment thesis. “I don’t understand; I’m in revenue, am B2B vertical SaaS,” I hear them say. I can understand them not understanding the pass because, on the surface, it might look perfect as a DWP Capital deal. Most founders don’t […]
Financial Models for Early Stage Companies
Are They Important? Hell Yes One of the essential diligence items I look at during diligence is the company’s forecasted financial model. Sometimes I get hesitancy or an eye roll when I ask for one. The founder thinks that I am trying to see the business’s growth potential or that I am trying to trap […]
Three Non-Negotiable Founder Traits
It is getting challenging to identify great companies in the increasingly capitalized seed landscape. It used to be that getting early revenue was the most challenging part in seed-stage, so raising capital in seed was also tricky. This execution chasm separated the wheat from the chaff. Without these guard rails and market sizing being so […]
