Author: Charlie O'Donnell

You’re Not Taking Recruiting Seriously

Recruiting is hard.

Good candidates are hard to find.

What tells you this? Well, you can see it. Out of all the candidates that applied to your job post, very few are what you’re looking for and those that are seem to be falling down in the interview.

I hear it all the time—and when I hear it, I hear a red flag. Did you hear it?

“Applying to our job post.”

I mean, sure you need to put up some job posts so that those who are looking know that you’re hiring—and you need to write up the job anyway to get your team on the same page about what it is that you’re even looking for, but this isn’t how your next hire is going to come in.

You don’t just put up a few job posts and hope employee number four or six or eight walks through the door.

In the words of Billy Madison, “If your dog is lost, you don't look for an hour then call it quits. You get your ass out there, and you find that fucking dog!”

There is absolutely no substitute for a consistent outbound effort by your own team—not a recruiter. You can hire recruiters—that’s fine. You just also need to be actively seeking out the very best candidate by including those that aren’t searching.

When I started a company fifteen years ago, I put up job posts everywhere I could, but the volume of interviewable candidates just wasn’t there. (Read more...)

The Pre-Board Board: How to Create Accountability Before You Give Away a Board Seat

Typically, investors don’t take a board seat until you raise your first equity round—which means that it could be *years* before you have a real board meeting:

  • A year of nights/weekends work researching, prototyping, and fundraising.

  • You raise your pre-seed round and if you're lucky and good, you can get to an equity round in 12-18 months. Many people extend this round and don’t get there for two years.

Until that point, how do you create the accountability necessary to stay on track and achieve your goals?

First off, many founders don't really feel the need to have external accountability. It makes sense—to be a sounder in the first place means having a strong sense of agency and believing in your ability to manifest something out of nothing without a lot of help.

Not only that, founders get a lot of warnings from other founders about “losing control” and to be careful about ceding too much power to investors.

I’ll let you in on a little secret. Investors don’t actually like to do more work than necessary—and replacing a founding team is a lot of work. In an ideal world, we check in every now and then and the founder is completely on top of everything they’re doing, shares enough reporting to indicate that, and is totally self-sufficient.

That’s the founder we want you to be so we’re able to spend more time kitesurfing, microdosing, or tweeting our misguided libertarian leanings in the face of a crypto market losing billions (Read more...)

The Philosophy that Underpins the Right: It’s Not What You Think

After the Supreme Court decision overturning Roe vs. Wade, I was chatting with someone who grew up in another country and hadn’t spent a lot of time in and around American politics. They were trying to understand the inherent contradictions between a theoretically conservative right that expands the government to legislate over personal decisions like the healthcare around a pregnancy.

It’s an interesting question—because when you examine the positions of the current Republican Party, they don’t seem to line up under any single philosophical framework. They might say that they’re pro-”life” but at almost every turn, when it comes to doing things that actually improve the health and welfare of people post-birth, they don’t want to spend the money on it. They consistently vote to take away healthcare benefits. They want to remove the tax credit for children. They don’t even want parents to have the ability to take extended leave from work to be with their newborns. They don’t want to provide education to these kids and they actively support the proliferation of weapons whose sole purpose is to take life away—even after school shootings kill multiple kids.

So, yeah… “Life” doesn’t seem to be the guiding principal—certainly not for a party that supports capital punishment.

It’s certainly not small government. They want to legislate pregnancy, marriage and there’s no end to which they’re willing to fund police forces and the military. A modern Republican government certainly isn’t a small one with a small reach into people’s lives.

How (Read more...)

Can Your Portfolio Company Cut Your Bad Cholesterol by More Than Half? It Can When It’s Culina Health.

The pandemic and parenthood hasn’t been great for either my eating habits or my activity level—not to mention the two month grandparent visit when we brought Mirren home.

Here’s my approach to my snacks: “I finished off this candy too fast. I can’t ever buy it again.”

Here’s my father-in-law’s approach to my snacks: “I saw that you finished off the candy so I ran out and bought you some more.”

So, it wasn’t too surprising when I got back my results from Base (a subscription data-driven personal health company also in the BBV portfolio) that my cholesterol, particularly by LDL (bad cholesterol) had ticked up to the point where I needed to do something about it. There are cholesterol issues in my family, too—which I don’t actually think is nearly as genetic as our love of cheese and ice cream, but still concerning.

My general approach to healthy habits has been to poke around the interwebs for ideas and see what I think I can integrate into my lifestyle that is backed by actual science. I guess I shouldn’t be surprised when the numbers didn’t really move that much the next time around.

Luckily, that’s when I met Culina Health—a new startup whose seed round Brooklyn Bridge Ventures co-led with Healthworx, the investment arm of CareFirst Blue Cross Blue Shield.

Culina is a personalized nutrition platform powered by registered dietitians to help patients prioritize the way they want to live. What I realized when I was googling around (Read more...)

Every Founder that Hates “Personal Branding” Should Write a Book

“Personal Branding”

The term is fingernails on a chalkboard-level cringe for many of the best founders—mostly because it feels most of the people who spend time building their personal brand don’t actually have much there there behind it.

At best it’s boasting and at worst, it’s blowing smoke.

Which means that most of the people who actually do have the most interesting and useful experience to add to the public conversation aren’t doing so. That means the public conversation winds up feeling like a lot of hot air driven by people who crave the limelight, which tends to be an adversely selected bunch that hard workers don’t want to associate with.

Unfortunately, this has real consequences for founders. You’d like to believe the world is completely meritocratic—that you’ll put your heads down to work on your company, hit all your metrics, and just show up on the doorstep of a VC firm who will just be bowled over at the fantastic little company you’ve created. They’ll obviously see the value of what you built and will be compelled to offer a term sheet on the spot.

That’s just not how it works.

There are so many companies out there and the reality is, many of them kind of look like each other. Very few of them have standout traction—because starting a company and achieving results is more “machine driven” than ever. If you raised the same sized seed round as everyone else, you can only hire so many salespeople, put (Read more...)

The Legs of the Stool and Why It’s Tough to Compare Two Startups Raising

If you’re out raising, it’s quite normal for you to peer over the fence and see how far other founders are getting at the same stage. The most obvious attribute for comparison is stage—have they launched, do they have paying customers, etc.

Unfortunately, this is a fundamental misunderstanding of how startups raise.

Fundraising is not a reward for the past. It’s selling a ticket to the future. You don’t earn a round. You sell it.

Therefore, traction is but one aspect of a story that you’re pitching to support how things will go—and how you fit that in is not unlike putting the legs on a stool to get it to stand up.

It probably won’t and can’t be your only leg—unless you’ve got so much traction that it represents a big, solid chonk of a leg, but that’s pretty rare. Even with two legs, it’s going to be hard to balance your stool.

How good of a leg it needs to be is also something that is important to get right.

The types of legs available to you in your fundraising story could be things like:

  • Being a repeat successful founder—and not like, you sold something for an undisclosed amount and got your investors 2X. I’m talking like Jack Dorsey “automatic check” level of founder. If you haven’t made your previous investors back a bunch of cash, then it’s hard to make this a real solid leg. Everyone else is just a “good team” but can’t be a real (Read more...)

The Stock Dive: How I Learned to Stop Worrying and Love the Market

I’ve been asked by portfolio companies and plenty of others about how they should be changing their strategy given the stock market pullback and what they’ve been hearing on “VC twitter”.

My answer depends on whether the company would answer yes to any of the following questions:

1) Did you raise an overpriced round in the last 18 months—one you know was over the top?

2) Do you sell something that isn’t truly a must-have product to startups or other tech companies?

3) Do you need to raise a large amount of growth capital in 2022?

4) Are you struggling to get to unit profitability?

5) Is the post-money on your last round north of $30mm and you’ve yet to show meaningful and repeatable revenue traction that comes with positive contribution margins?

If so, yeah, then I’d say I’d be concerned.

But, you know what? I would have been pretty concerned anyway. It’s never a good thing to be selling a product for a loss on every sale before you even pay your overhead, or selling something that’s a vitamin, and not medicine.

Even “needing” growth capital can be problematic. Growth capital should be the kind of thing you choose to take, not need to take. If your business model literally can’t work without you raising $50-100mm more, then you’re playing a pretty dangerous game that was always obviously heavily reliant on friendly capital markets that might disappear.

The good thing is that what I wrote above doesn’t apply to (Read more...)

Should You Take Money from Investors Who Don’t Share Your Values?

For most founders, fundraising is a struggle.

Only a small minority of people are born into the kinds of connections and life paths to provide them instant access to capital. The rest have to work super hard to create access for themselves, build trust and win investors over. That may come with the headwinds of bias working against you—conscious or otherwise.

So when you finally do get an offer to invest, the temptation to not question where it comes from is understandable.

A lot of people make their money in ways that you wouldn’t necessarily feel great about. Would you take a check from a corporate raider whose private equity dollars come with mass layoffs and union-busting? What about someone who made their money running a for-profit prison?

But hey, maybe some of those folks want to do some good with their cash for a change?

Is there a line you would draw?

How about an investment from the Sackler family—the pharma family in the middle of the opioid crisis.

How about a Middle Eastern Prince that kills journalists (directly or through a Kushner)?

Drug kingpin?

(Morality aside, I’d say given the inherent riskiness of startups, I’m not sure this would be a great addition to your cap table. You don’t want to have to go into witness protection just because you couldn’t get your app to go viral.)

In all seriousness, this week’s headlines—the likely reversal of Roe vs. Wade—have brought a new front to this ethical battle. Would (Read more...)

The Founder and Investor Trust Problem: It’s not what you think.

Whenever I submit a term sheet, I always caveat it by saying the following:

“This is the one time we’re completely misaligned. I’m incentivized to buy up as much of the company at as low a price as possible and you’re incentivized to sell as little of the company as possible by raising the price.”

Founders seem to get that. The price negotiation process is pretty straightforward, and once a deal has been agreed upon we move on.

That doesn’t mean we trust each other. Don’t get me wrong—I don’t mean trust in the sense that VCs think founders are just going to get a fake passport and move to Fiji, or that investors are secretly plotting to take over the company.

I mean trusting what each one brings to the table—and being honest about the process of earning that trust and what it means to having a productive relationship.

For example, if you’re a sales oriented founder that gets backed pre-launch, then an investor isn’t going to assume that founder has any product design skills. They may not trust that the direction that they’re giving the team doing the UX and the build comes from a place of expertise—and frankly, rightfully so. In this case, a VC would have every right, having seen lots of products get built and succeed or fail, to want to observe and discuss that process.

What happens sometimes is that we don’t have an honest conversation about that. Founders suffer enough from imposter syndrome (Read more...)

How to Get a VC’s Attention at an IRL Event

A few years ago, I was at Techcrunch Disrupt and this guy taps me on the shoulder as I was chatting in a group.

He simply extended a handshake and said:

“Hi, sorry to interrupt. My name is Alan. My company is Bread and we make ad creative super easy. I’m sending you an e-mail with early access to the application because I see that you’re busy with this group, but I just wanted you to match the name and the face. Thanks.”

And that was it. He walked off. When I next checked my e-mail, there it was, an e-mail from Alan giving me early access to the product. I had plenty of time to ask questions and test it all out.

What Alan recognized was that most IRL forums and networking events are absolutely awful places to pitch and here’s why:

1) When a VC shows up in person, they’re looking to replicate the kind of top of the funnel they would get in an hour or two’s worth of e-mail, and that’s not going to happen if you corral them into a corner for 30 minutes. They want to show up, shake hands, take names, and generally touch base with as many people as possible to fill their top of funnel and remind people that their checkbook exists. They’re looking to spend only a precious few seconds with each person, forcing you to rush your pitch.

2) They have no ability to actually do any work in (Read more...)