1/ From vantage point of being able to see hundreds of companies, good & bad I have some advice for founders - Get to know and love "gross margin." Revenue doesn't pay your bills, GM does
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6/ Raising capital at very high prices helps avoid short-term dilution. But if you raise at too high a price you make it harder to raise next round. Be sure you can grow into your valuation by next fund-raising or your last raise could become existential or extremely dilutive
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7/ If you know an employee is a negative energy in the office don't delay parting ways. Negative employees affect others like a disease and you can't ever turn them around. There's never a perfect time - except now.
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8/ Don't spend undue time advising other people's startups until your business is successful, scaling & stable. Founder focus is the single most important resource that needs to be spent wisely
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9/ Don't spend undue time at conferences. Networking & relationships are important so some events are fine but if you're addicted to being out of the office that should tell you something. Or at least your employees will tell you what it means
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10/ Communicate to board early & often. Getting through hard times requires investors willing to spend time, to spend internal political capital & to be willing to go to bat for you in tough times. Strong relationships & trust based on transparency helps a great deal
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11/ Venture debt has its places (timing of AP vs. AR, inventory purchases, etc) but should be used very sparingly as a replacement for venture capital except at later stages of your business. Usually a terrible idea as runway extension. Debt comes home to roost
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12/ As you scale you should think about redundancy in every key role in the company - including CEO. Things happen, people tire, sometimes tragedies. You wouldn't build a single point of failure in your code - shouldn't in your company. Tech, product, sales - all need redundancy
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I see your point. I’m curious where you draw the line here? I’ve seen founders that fail to set a clear vision and roadmap, and thus the team suffers into a negative pitfall. It might be one part of the team, or the entire team. Thoughts?
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"founders that fail to set a clear vision and roadmap" ... likely not going to be a successful company
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Outside of startups, you often can turn them around.Its the urgency and high stakes of a startup that forces you to fire them without even trying to fix them.
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