What entrepreneurs can learn from Jeff Spicoli


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I know I may be dating myself here, but over the past few weeks I couldn’t help but think about the movie Fast Times at Ridgemont High and one of the standout characters, Jeff Spicoli.  When asked by Mr. Hand, his teacher, why he keeps coming late and wasting his time, Spicoli answers, “I don’t know.”

 

In several meetings with entrepreneurs during the past few weeks, they would have been better off answering like Spicoli rather than giving me some hollow bull shit answer.  I want to make it very clear that I don't expect entrepreneurs to have all of the answers to my questions.  In fact, many questions I have may not have an answer today so "I don't know" will be your best answer. My one caveat is that the "I don't know" is followed by a how might you figure out the answer or a when might you figure it out.  This line of questioning is really just another way to test how you think and determine how our working relationship might be were I to invest.  I would rather have the honest "I don't know but I'll figure it out" then a made-up answer that will never allow you or your investors to really understand what is driving your business.

The post What entrepreneurs can learn from Jeff Spicoli appeared first on BeyondVC.

What entrepreneurs can learn from Jeff Spicoli


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I know I may be dating myself here, but over the past few weeks I couldn’t help but think about the movie Fast Times at Ridgemont High and one of the standout characters, Jeff Spicoli.  When asked by Mr. Hand, his teacher, why he keeps coming late and wasting his time, Spicoli answers, “I don’t know.”

 

In several meetings with entrepreneurs during the past few weeks, they would have been better off answering like Spicoli rather than giving me some hollow bull shit answer.  I want to make it very clear that I don't expect entrepreneurs to have all of the answers to my questions.  In fact, many questions I have may not have an answer today so "I don't know" will be your best answer. My one caveat is that the "I don't know" is followed by a how might you figure out the answer or a when might you figure it out.  This line of questioning is really just another way to test how you think and determine how our working relationship might be were I to invest.  I would rather have the honest "I don't know but I'll figure it out" then a made-up answer that will never allow you or your investors to really understand what is driving your business.

The post What entrepreneurs can learn from Jeff Spicoli appeared first on BeyondVC.

Accomplishment Arbitrage


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




I’ve noticed there is a fair amount of what I’ll call “accomplishment arbitrage” taking place regularly in the tech world right now.  “Accomplishment arbitrage” occurs if someone refers to an accomplishment that occurred in the past when the value of that accomplishment was different than it is now.  For example, if the accomplishment was easier to achieve in the past, the speaker can take advantage of that spread in value, make claim to an accomplishment that happened in the past with perceived value that is higher than the true value of their accomplishment, and in doing so, essentially arbitrage the accomplishment.  On the flipside, if it was harder to achieve in the past but newly easy, the speaker can once again take advantage of the lag in understanding. The key is that there is a disconnect between the perceived value of an accomplishment, and the true value.

Evolution in accomplishment Continue reading “Accomplishment Arbitrage”

Accomplishment Arbitrage


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




I’ve noticed there is a fair amount of what I’ll call “accomplishment arbitrage” taking place regularly in the tech world right now.  “Accomplishment arbitrage” occurs if someone refers to an accomplishment that occurred in the past when the value of that accomplishment was different than it is now.  For example, if the accomplishment was easier to achieve in the past, the speaker can take advantage of that spread in value, make claim to an accomplishment that happened in the past with perceived value that is higher than the true value of their accomplishment, and in doing so, essentially arbitrage the accomplishment.  On the flipside, if it was harder to achieve in the past but newly easy, the speaker can once again take advantage of the lag in understanding. The key is that there is a disconnect between the perceived value of an accomplishment, and the true value.

Evolution in accomplishment value happens a lot outside the tech world.  Take sports, as an example. People keep on getting faster and stronger. But this consistency makes it hard to arbitrage the accomplishment.  If a swimmer who swam in the 2008 Summer Olympics told their 100m freestyle time to someone who swam in the 1932 Summer Olympics, the old timer would look the youngin’ up and down and quickly say, “so what? It’s easier now!”

The problem with accomplishments in the tech world is that they’re not consistently changing in one direction, and it’s not as obvious that you’re talking to the equivalent of the 2008 Olympian.   Take the statements, “I sold my company for $500m” or “I invested in a company that was acquired for $500m.”  I wasn’t in high school yet so I don’t have a good sense, but I would guess that a negative arbitrage occurs if the acquisition happened before 1995.  But a big positive arbitrage occurs if the acquisition was in cash and took place in the late 90’s / early 00’s.  An even bigger positive arbitrage takes place if the acquisition took place in the late 90’s / early 00’s in an all-stock transaction with a public company (that probably no longer exists). Of course, the speaker best takes advantage of this value arbitrage by providing none of this context.  The same phenomena is true for when it comes to taking a company public.  Sometimes it’s been easy, sometimes it’s been hard. But we interpret the value of the accomplishment based on how easy or hard it is to accomplish now.

The dot.com bubble is a great source of accomplishment arbitrage value.  I think we’re currently creating a new breed of accomplishment arbitrage.  As an example, take what it means to “be an investor” in a particular company.  The vibrant secondary markets for companies like Facebook, Zynga, Twitter, LinkedIn and others, not to mention large seed syndicates, has altered the value of what it means to “be an investor”.  Nonetheless, we’re still holding on to the traditional definition of what it means to “be Continue reading “Accomplishment Arbitrage”

Accomplishment Arbitrage


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




I’ve noticed there is a fair amount of what I’ll call “accomplishment arbitrage” taking place regularly in the tech world right now.  “Accomplishment arbitrage” occurs if someone refers to an accomplishment that occurred in the past when the value of that accomplishment was different than it is now.  For example, if the accomplishment was easier to achieve in the past, the speaker can take advantage of that spread in value, make claim to an accomplishment that happened in the past with perceived value that is higher than the true value of their accomplishment, and in doing so, essentially arbitrage the accomplishment.  On the flipside, if it was harder to achieve in the past but newly easy, the speaker can once again take advantage of the lag in understanding. The key is that there is a disconnect between the perceived value of an accomplishment, and the true value.

Evolution in accomplishment Continue reading “Accomplishment Arbitrage”

Reflecting on passed investments


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




Every 3 months I dig through my “passed company” folder to look at what investment opportunities we passed on and why.  Inevitably, there are a few companies that are near-misses, but we end up passing on for whatever reason.  Did we pass because we didn’t think the team was great or because we didn’t believe that they could get a product launched?  Did we pass because of lack of traction in the beta release or because of concerns on valuation?  Looking at my “passed company” folder gives me an opportunity to test our reasons on passing and to see 3 months later if the entrepreneurs could actually execute or prove our concerns wrong.

While many times I find doing this reflection further confirms our reasons for passing, I also find myself from time-to-time sending up a follow up note to check in on these near-misses or doing a quick Google search to see how the company has progressed since our last communication.  Inevitably, there will be a few that “got away” and seem to be doing quite well.  No one is perfect and looking back every quarter gives me an opportunity to better hone my investing acumen and further refine my understanding on what separates a potential winner from a loser.  Many times we are so busy that we can only look forward to the next new thing or next hot deal, but I encourage you to occasionally take a step back, look in the rear-view mirror, and learn from your past history.  I promise you that this reflection will only make you a better investor in the long run.

The post Reflecting on passed investments appeared first on BeyondVC.

The makings of an overnight success


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




Almost a year ago to the day, I mentioned on my blog that I would be hosting a Pitch Deck Study Hall.  My offer was for people to send me their Pitch Decks, and I would try to provide some feedback.  Many entrepreneurs took me up on the offer, including NYC’s Mike LaValle

Mike, bless his heart, sent me one ugly deck, whose cover I’ll post here.  (Don’t worry – he’s given me the okay to post about him!)

His deck inspired a follow up post of mine, where I instructed entrepreneurs that their pitch decks should strive to be like a perfect date:  they need to have a great personality, and be good looking. 

Despite Mike’s less than overwhelming powerpoint skills (wink) there was some great content there and Mike and I started to check in with each other every few months.  Each and every time I caught up with Mike, the progress he was making at Gojee exceeded my increasingly high expectations.  First it was the technical team he recruited when so many entrepreneurs in NYC struggle to recruit one developer, let alone a team.  Then it was closing a large supermarket chain.  Then it was recruiting the uber talented “interface slayer” KC and designer Adam Meisel.  Each time we spoke, I asked how Mike did it all, hoping to learn some new trick, but it always came down to plain ole’ hustle and hard work.

When I check out Gojee now, it’s awesome to see how far the company has come from that first pitch deck.  So often in my job, I have the privilege of working with entrepreneurs as their business start to hit an inflection curve and take off.  From where I sit, very often these companies look like they are overnight successes.  But the truth is that behind every overnight success is an entrepreneur like Mike who has been working his/her butt off for several months before it finally starts to work.

The other day, Mike sent me an email mentioning yet another impressive milestone.  I won’t steal Mike’s thunder here but suffice to say, I have a good feeling that Gojee will one day be an overnight success as well.  It’s been pretty inspiring to watch.

The makings of an overnight success


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




Almost a year ago to the day, I mentioned on my blog that I would be hosting a Pitch Deck Study Hall.  My offer was for people to send me their Pitch Decks, and I would try to provide some feedback.  Many entrepreneurs took me up on the offer, including NYC’s Mike LaValle

Mike, bless his heart, sent me one ugly deck, whose cover I’ll post here.  (Don’t worry – he’s given me the okay to post about him!)

His deck inspired a follow up post of mine, where I instructed entrepreneurs that their pitch decks should strive to be like a perfect date:  they need to have a great personality, and be good looking. 

Despite Mike’s less than overwhelming powerpoint skills (wink) there was some great content there and Mike and I started to check in with each other every few months.  Each Continue reading “The makings of an overnight success”

Apprenticeship, BVP and Thanksgiving


This post is by Sarah Tavel from Sarah Tavel / Adventurista


Click here to view on the original site: Original Post




A couple weeks ago, Ben Siscovick over at IA Ventures wrote a really wonderful post on the importance of being mentored as a young VC. As Ben wrote,

“In fact, it’s a complete wonder to me that young venture investors find a place in the eco-system at all …And yet, not only are there young VCs, but many in this new breed are excelling in the industry. In some ways I think of a firm ‘betting’ on a young VC as analogous to investing in a first-time entrepreneur – you know there will be mistakes along the way, but you hope that the big successes will outweigh the inevitable mistakes and that overtime the individual will grow into a seasoned, mature and experienced pro. ” 

On this Thanksgiving day, I wanted to pick up Ben’s thread with a long overdue post.

When I joined Bessemer as an Analyst back in May 2006, I was very young, new to both the investment world and the technology world, and quite a bit shy. If the job had required any internal politicking to get ahead, I would have floundered. Instead, the job was incredibly merit oriented, and the measure of merit extremely objective. I worked hard, listened a ton, and somehow, someway, I excelled.

Midway through my second year, as I started thinking about applying to business school, Jeremy Levine asked me if I would be interested in becoming his Associate. For those of you who don’t know Jeremy, that’s a little like being asked to dance by the winner of the national dancing contest. I still remember how elated I was on my train ride home from Larchmont that day.

It’s been almost three years since that day, and I realize more and more how much I’ve learned working with Jeremy and the rest of the Bessemer team. Bessemer is one of the few firms that have successfully transitioned from one generation of great investors to the next, several times over (dating back to 1911). With this tradition, comes an ingrained commitment to nurturing and recognizing the talents of its younger investors. I’m incredibly lucky for that. Venture investing really is a craft that one learns best through apprenticeship and mentorship. The feedback cycles are too long otherwise.  But getting apprenticed doesn’t mean you’ll be successful. There is first a question of the quality of the apprentice and whether he or she will be able to absorb all the lessons (and bring his or her own perspective), and then there is the question of the quality of the lessons that apprentice learns.

Although I can’t speak to the former, on the latter, I believe Bessemer’s incredible track record and longevity speaks for itself. For a youngin’ like me, it’s a pretty phenomenal place to be.  I have no idea where the road ahead lies, but I feel lucky and grateful for the road I’ve traveled thus far. So thank you BVP, and happy Thanksgiving to everyone!

Standard investor update for startups


This post is by Ed Sim from BeyondVC


Click here to view on the original site: Original Post




I remember when we hired a new CEO for one of our portfolio companies and my tip to him was to overcommunicate.  We had a few large VCs on the board and a number of high-profile angels that could also help in various ways.  His job was to keep everyone up-to-date but also to know how to get help when he needed it and from whom.  Given today’s excitement over seed investing it is not uncommon for many of today’s entrepreneurs to have 5-15 investors in any given round.  How you effectively communicate with your investors is an important priority that if done right will give you major value add while also not taking too much of your time.

In order to help our new CEO, I reached out to all of the other investors, and we all agreed that if we all spoke to him a few days a week about the same information that he would not have time to run his business.  In addition, this would be redundant for the CEO since most investors were asking for the same basic information.  In the spirit of streamlining information flow, we worked with the CEO to put together a weekly email to provide us with the key metrics the company tracked along with departmental updates on key high priority projects.  We weren’t asking the company to create something they shouldn’t already have (key metrics, departmental priorities, cash balance) but rather we just wanted the data shared on a timely basis.  Over time, we all found that when we did speak with the management team that we did not have to spend a half hour gathering information but rather we could get right to the point and actually discuss the whys or hows on certain sales numbers, metrics, or prospects.  In the end, we were all much happier and more productive since we had the same baseline of information and could focus our energy on productive and deeper conversation on the business stategy rather than gathering basic data.

Over the last 6 months I have made a number of seed investments and have shared the following company update with them. Each CEO has had their own minor tweak but this should give you a sense of what investors may be looking for and how it can help you streamline your communication and focus on how to extract value from your many investors.  If you choose to update weekly then obviously it will most likely be a shorter piece with maybe only the cash burned and current cash on hand as the financials.  If you choose to send out a Continue reading “Standard investor update for startups”

Before you sign a termsheet, take your VC to the Chiropractor


This post is by Phineas from Sneakerhead VC


Click here to view on the original site: Original Post




get alignment, take your VC to the chiropractor

Alignment with your investors is crucial. Adjustments are available if you ask questions before you sign the term sheet

When you are fund-raising, your job becomes getting cash into your company. However, the best entrepreneurs don’t just get funded, but find funding alignment with their investors in terms of values, vision and approach. Since joining First Round Capital I have met with hundreds of entrepreneurs and many of them never ask me any questions about our process or our approach to working with our portfolio.

I know the fund-raising process is really, really hard. It is an emotional roller-coaster. It demands 100% of your energy, your time and your heart but you should be asking questions, interviewing your potential investors, and choosing your investors.

It is important to know you have alignment in terms of financial interests and that you are not only working toward the same outcome but also Continue reading “Before you sign a termsheet, take your VC to the Chiropractor”

Junior people in VC are gate keepers who add friction to the system


This post is by Phineas from Sneakerhead VC


Click here to view on the original site: Original Post




My friend Dave Knox just added a piece on his blog that looks at this issue through the lens of business development and sales. It is a great perspective on B2B deals.


I joined First Round Capital as a Principal knowing I would have a voice on the investment team, not a vote.

Keeping you out or fighting to keep you in? Gate keepers can do both…

I have a specific approach to meetings with entrepreneurs and work hard to add value to each founder who takes the time to meet with me. Some of this value is strategic. It is based on my experience as an entrepreneur, as a consumer-focused product development and marketing guy, and pop-culture loving sneakerheadVC who loves to talk with smart people building great stuff. Some of this value is tactical. It is based on my position within First Round, the visibility I have Continue reading “Junior people in VC are gate keepers who add friction to the system”