Throwback Thursday

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I am often asked by entrepreneurs to sign NDAs before they will share their business idea with me.  Putting aside the issue of why VCs can’t sign NDAs for the moment (no, we can’t, sorry), the request reveals something more significant.  Entrepreneurs usually believe that their business idea is unique, and that it is the entrepreneur’s competitive advantage.  Some go to almost ridiculous lengths to be oblique, or to otherwise keep from revealing their “secret sauce.”

What is interesting to me is how often an entrepreneur’s unique idea is similar to an idea I heard the week before from another entrepreneur or team.  Sometimes I’ll hear

Read entire blog from August 13, 2011.

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This Friday I’m joining my good friend Jim Chung over at GW for a talk on “what makes a venture backable team?” As I prepared for the event I thought I would share some general thoughts on the topic in this blog post. I hope it’s useful to you if you are considering starting a business and putting your execution team together.
The first point I want to emphatically make is that I would not focus on putting a team together for attracting Venture Capital; I would focus on building a team to grow a businesses. If a business can be grown, and the team has the skills to grow it, then in my experience capital will find that business. Put another way – good entrepreneurs, and good teams, find a way to win.  A great idea in the wrong hands is nothing more than an idea. A great idea in the hands of a strong team is likely to become a business.
Therefore, when I look at a team I am focused on whether this is a group that can succeed together. I want a team that has many, if not all of the attributes below. But, most of all, I am looking for teams that believe that they will succeed and have the depth and chops to do it.

Also, my thoughts below are focused on the attributes of the initial team – the one that is going to take a business from concept to the first $1,000,000 in revenues. Teams and leadership for businesses that have more than 20 employees, or more than $1,000,000 in revenues, need some distinctively different attributes from a start up team. The same team can do both, but there are differences. The largest differences center around organizational development and management. Most entrepreneurial businesses won’t scale without skills in those areas, but that is a story for another blog post.

With that in mind, here are the characteristics that I believe are essential for a good start up team:

Read entire blog post from November 12, 2010.

 

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Buried among all of the articles surrounding Steve Job’s resignation, I found this interesting post in the National Review.  Basically, the post notes that Steve Job’s was a successful entrepreneur because he failed so often.

Actually, as I think about all of the entrepreneurial characteristics that are most salient to success, an entrepreneur’s ability to “fail upward” seems to be the best predictor of subsequent success.  This is something that I see many investors and hiring managers use as a primary criteria.  Has a person overcome a failure?  But, what it is about managing failure that is predictive?

It strikes me that failure provides a number of challenges to a person, and it is in the overcoming of these challenges that personalities are formed and strategies for success are created.  It is not the failure in itself that matters – it is what the person learns from the failure.  But, what does an entrepreneur learn from failure other than “gee, I won’t do that again?”

Read the whole blog post from August 25, 2011.

 

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Mentorship is implicit in so many of our interactions in business. In many instances it is the defining characteristic of a business relationship. It permeates start up entrepreneurship and working in established organizations. Some days it seems that my entire day is filled with interactions that center on mentorship, and it strikes me that for many of my peers it is the same way. What strikes me, however, is that for as many people who seek to be involved in a mentoring relationship in business, not a great deal of thought goes into the quality of these relationships. Mentorship by its very nature can be the most helpful or most damaging relationship an entrepreneur or junior employee can have.

Mentorship is a relationship with the following core attributes:

Read entire blog post from April 4, 2011.

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Recently there has been a food fight in Silicon Valley over the behavior of certain Angel investors. Perhaps you’ve seen some of it playing out in the blogosphere. Riveting stuff to be sure. What gets me though is that a lot of the angst seems to center on whether leading Angel investors are acting like VCs or Angels. My first thought was “well, who cares?” But, on reflection, I thought it was revealing of a continued disconnect in the usage of these terms, and what they actually represent.

I think that it is important to clear this matter up because…

Read entire blog from October 1, 2010.

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I have often tried to explain the dynamic of fundraising by analogizing it to a human behavior most entrepreneurs are familiar with – dating and relationships.  In saying this I often get nervous laughs from an audience.  My guess is that it reflects an internal thought process in the listener that goes like this.  “Hmmm, that makes no sense…. Wait, I think I get it it…. Oh man, when I think of the goofy things I have done to get ____…. Ugh (nervous laugh).”

Anyway, to extend on the analogy please consider this.  What are you most interested in doing when you are dating:  Getting someone to like you, of course.  Think about how you accomplish this goal.  Are you…

Read entire blog from February 28, 2013.

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It seems some days that getting an education is portrayed as the pursuit of mugs and fools.  I have lost count of the articles and blogs I read, and the talking heads I hear, spouting nonsense about the folly of pursuing a college education or an advanced degree like an MBA.  It is a large and recurring theme in startup land – the argument that real entrepreneurs don’t need an education, or that an education (or an MBA) is just an impediment to the inherent greatness and creativity of the entrepreneur.  It’s a theme presented through the images of the down trodden BAs who can’t get jobs, and stories of overpriced liberal arts colleges pumping out graduates with “no skills.”  And, you know what?  It is SO MUCH NONSENSE.

Entrepreneurship is a human behavior, without question.  People who are entrepreneurial often seem to be born into it.  However, growing a successful business is not instinctive. It is a journey, and one that is more likely to be successful if the people involved have knowledge and context to guide their instincts.  Moreover, a successful business…

Read the entire post from May 7, 2013.

 

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Originally posted in November 2013:

The JOBS Act reminds me of the old joke about the elephant and the blind men.  An elephant looks very different depending upon which part you’re touching.  There’s lots of hype around the concept of crowd equity for sure – almost breathless at times. This week’s announcement that the SEC is moving forward with rules to effect the intent of the Act – to allow unaccredited investors (i.e.., not wealthy people) to invest in startups through on line exchanges – was no exception.  Make no mistake, allowing people who are not well off to invest up to $5,000 in the stock of a small privately held company is a big change – it undermines 80+ years of securities laws based upon a simple principle: in the absence of a test for financial sophistication, having sufficient assets to absorb an investment loss is the best protection for investors.

But, is it a big deal for startups and investors?  Sadly, as a practical matter, there are aspects of this new regime that will … Read the original post from November 2013.

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