At any given week across our portfolio a few companies are bound to be making a bunch of tough decisions: new strategy, products, revenue models, international expansion, key hires – the list goes on. In a healthy entrepreneur – VC relationship a constant dialogue exists around major decisions, where the VC can act as a sounding board and advisor but always supports the entrepreneur in making the final decision. Something is wrong if it’s not like that and it needs fixing then.
The worst way to make important decisions goes something like this and I’ve seen it happen more than a few times:
Entrepreneur presents “options” (vs a suggested “plan”) to the board
No one’s briefed or thought about the decision properly
A debate ensues that is more or less an exchange of opinions and views based on at best anecdotal evidence
Those with the best argumentation skills or position win and the decision is made accordingly
Fred Wilson wrote a great post on how board meetings can be run effectively so I won’t repeat anything here.
Instead I want to share how in general I like to act as a sounding board
All this talk of building a tech hub, billion dollar companies, etc can get pretty serious sometimes. It’s good Berlin is maturing. But one of the reasons why I love being here is that the city is just flat-out ridiculous and silly. Istanbul is significantly less chaotic. Italy has better politicians. Just step back and think about all of the crazy things you see here each day. I think I’m going to try to step back more now and then and laugh a little bit about this nutty city because it keeps me in good spirits. If you want to laugh more with / at Berlin too I highly recommend this blog: http://whenyouliveinberlin.tumblr.com/
As an Irishman with a Bavarian upbringing I have no shortages of opinions and emotions. However as a VC I like to keep it as neutral as possible, I like to tone it down a little. Also online, here on this blog and on twitter. I don’t cheer startups, entrepreneurs or tech companies up too much (guilty sometimes), but I sure try to never ever be cynical, snarky or look down on what anyone else is doing. My heart especially sinks when I see entrepreneurs or VCs bash other folks, other “tech hubs”, getting satisfaction out of someone else’s failure, etc – usually this is not done by people who are or have been very successful or are particularly self-secure. So when you do that you’re moving yourself in to a camp you don’t want to be in. It makes me wonder about your opportunity costs. It also makes me wonder what it would be like to work with you during the startup roller-coaster ride.
Maybe its lame - but I just love working with good karma people. So it’s important to me. I watch out for all signals I can find.
Don’t be like this:
Good PR can be a powerful tool. The right amount and type of buzz can help attract users / customers, employees, partners, open doors more easily in general, put you on the map for investors, acquirers, etc. It’s a great acquisition tool in many ways, but it’s always a poor retention tool.
In this post I wanted to share some of the best PR practises I’ve seen working with startups. Most of the points below cover how I’ve seen teams nail big announcements and really benefit from them. Of course PR is an ongoing job and doesn’t start or end with announcements. Make sure you’re a rolling thunder, not an explosion.
Here it goes:
Don’t just do PR where your peers and investors are – focus especially on where you can reach users / customers. Go broad, differentiate your message accordingly where you can
Getting a tech blog to write about you is important and has many benefits (early adopters, hiring, investors, etc) but it’s probably only the tip of the iceberg in terms of folks you should
I just stumbled across this on twitter. Entrepreneurs and the folks financing them have a lot of power to change things. Technology has always changed things. Not sure we’re doing enough. I certainly am not.
VC-entrepreneur relationships can be like marriages, just that the likelihood of a divorce (exit, wind-down) is 100%. But until then its important you forge a good working relationship. Not become friends (although that can happen it may not always be a great idea), but the entrepreneur should see the VC as a trusted advisor and the VC needs to respect that it’s just that: advice.
You’ll obviously get a good sense for chemistry in meetings, and sometimes it can be better to have more than less. Sometimes things change when you are negotiating terms, you can read a lot from how people negotiate. Also meeting up for dinner, lunch etc and to talk about other stuff than the company / investment can reveal a lot. In short: the more interaction before you commit the merrier. Ideally you’d get into a fight and then be friends again but that isn’t always feasible.
In any case, as an entrepreneur it’s super important you go do due diligence on your investor just like they are doing due diligence on you and your company. So here’s some things I’d look out for as an entrepreneur:
Technical Fund Due Diligence (basically: will they
Recently a lot of talk has come up about 2013 being a make or break year for the Berlin tech community. I think both sides of the notion are slightly short-sighted, so I thought best not to comment on it and let it pass.
As it seems to be hanging around, and I feel partially responsible for waving the Berlin flag in international press outfits and therefore directly contributing to the “pressure”, I felt I owe everyone an opinion in this.
So here it goes. In short: tech ecosystems don’t make or break in a year, Berlin’s tech community is way too young of an ecosystem for it to be a “make” year and there are way too many folks building and growing great companies for it to be “break” year.
Like in any ecosystem there will be key milestones of course – failures and successes – there will be good years and bad years and we’ll have to learn to embrace and learn from both. I don’t know what 2013 will be, but frankly I don’t care so much about it. I have a preference for a great year.
What I do care