Feb 18 2020

Venture Deals Online Course – Spring 2020 Registration Is Open

We are running the Venture Deals Online Course again. Registration is now open and it runs from March 8, 2020 – May 1, 2020. It’s produced by Techstars and Kauffman Fellows.

We’ve run the course six times now and have had over 25,000 people take it.

It’s free, although it’s recommended that you have a copy of our book Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist. The 4th Edition is out with plenty of new and improved stuff.

The course runs for seven weeks with the following syllabus.

  • Week 1 – Introduction of key players/Form or join a team
  • Week 2 – Fundraising/Finding the Right VC
  • Week 3 – Capitalization Tables/Convertible Debt
  • Week 4 – Term Sheets: Economics & Control
  • Week 5 – Term Sheets Part Two
  • Week 6 – Negotiations
  • Week 7 – Letter of Intent/Getting Acquired

If you are interested, sign up now and tell your friends who are interested in venture deals.

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Feb 13 2020

The Challenge of Being an Excellent Board Member

When I started blogging in 2004, there weren’t many VC bloggers. I followed Fred Wilson and David Hornik’s lead and just started writing what was on my mind about, well, anything that was on my mind.

Today, VC content pieces are everywhere. I’ve become less interested in writing this kind of stuff so my blog has evolved into whatever is on my mind, but a lot less “VC stuff.”

Every now and then I come across a spectacular VC blog post (or article in Techcrunch, or one of the other places VCs now put their content pieces.) As I was procrastinating from what I was working on, I noticed an article titled Mike Volpi on the art of board membership.

It’s a spectacular article. Go read it now. I particularly like the topics he went after.

  • Nature of the relationship
  • The mirror
  • Context
  • Network
  • What happens in between
  • Availability and relevance
  • Delivering a message that can be heard

When I wrote Startup Boards: Getting the Most Out of Your Board of Directors with Mahendra Ramsinghani, we tried to include constructive thoughts about how venture-backed boards work and how to improve them, along with plenty of examples. As I’ve been on some great, ok, and terrible boards (and have been an effective, mediocre, and ineffective board member), I find clear articles like Mike’s powerful as I reflect on how I act as a board member.

I ever get around to writing a 2nd Edition, I plan to reach out to Mike and see if I can include some of this. In the meantime, I leave you with his powerful, and well said ending.

Board membership is a privilege and a nuanced responsibility that can have a transformational impact on businesses. Sometimes investors, independents and entrepreneurs forget this. Entrepreneurs should expect a great deal from their boards — not as blind supporters but as true copilots. Likewise, board members should not view board membership as a list of icons on their LinkedIn profile, but as a subtle yet massively impactful role they play in the creation of great businesses. When these relationships function properly, the two parties become true partners in the entrepreneurial journey.

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Feb 12 2020

You All Instead of You Guys

While reading Kim Scott’s book Radical Candor: Fully Revised & Updated Edition: Be a Kick-Ass Boss Without Losing Your Humanity, I came across an anecdote from a discussion she had with Dick Costolo.

One of my favorite stories about Dick and diversity was his effort to eliminate the phrase “you guys” from his vocabulary. I told him a story about my twins—one a boy and one a girl—who were in kindergarten. Both of their teachers were speculating why boys raise their hands more often than girls. Then I attended a class and heard the questions: “OK, you guys, who knows what four plus one is?” No wonder the girls weren’t raising their hands! Children are literal, and girls are not guys. I told Dick that story, and confessed that I’m literal too and feel annoyed whenever somebody addresses a mixed group as “guys,” or “you guys.” Most people look crossways at me when I launch into my “you guys” diatribe, but Dick smacked his forehead. “Of course! There’s nothing worse than being invisible. I can’t believe I never thought of that! There’s no worse way to make a group of people feel excluded than to use language that pretends they are simply not in the room.”

“Yes, like Invisible Man,” I said. Dick and I had recently discussed Ralph Ellison’s novel about an African-American man whose color renders him invisible.

“Yes, exactly! OK, you’ve convinced me. I’m going to start saying you all!” Dick said.

I’m from Texas, so I generally try to say “y’all” instead of “you all”, but I realize that periodically I’ll slip and say “you guys.” Going forward, I’m going to try to reprogram my brain to get rid of “you guys” from my vocabulary. If you catch me saying it, call me on it.

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Feb 6 2020

The Coronavirus Impact on Hardware Startups

For the past week, I’ve been asked at least once a day (yesterday I was asked several times, with an R0 of 3) about what I think the coronavirus’ impact will be on the global supply chain.

I have a perspective that it’s too early to really know but there are starting to be guidelines about how to think about it, especially as Chinese new year + a week has passed (and we are almost at +2 weeks). Theoretically, factories in China are opening next week, but until they open, they aren’t open …

While there is starting to be some macro analysis on the web, it’s classic generic stuff with big company examples such as Charting the Global Economic Impact of the Coronavirus, Coronavirus shakes centre of world’s tech supply chain, and How China’s novel coronavirus outbreak is disrupting the global supply chain.

I find things like the Johns Hopkins CSSE data set and coronavirus map to be much more interesting than these articles so I sent an email out to our hardware companies last night to see what they were hearing and thinking to collect some quantitative data from startups.

John Hopkins CSSE snapshot 2/6/20 @ 7:33am ET

It seems like most people are expecting factories to open on 2/10 as planned. However, the expectation is being set that production will take two weeks to ramp back up to normal. And, there is some concern that larger companies will likely exert pressure to be at the front of the line.

Another problem at this point is movement into and out of China. The Chinese border with Hong Kong is only open at a few places and many are afraid to enter China right now for fear that they won’t be able to leave.

Everyone anticipates a big logistics clog once things start shipping, which will introduce delay and cost, although the magnitude of this is unknown.

Finally, the downstream (or upstream – I never get that right) impact of long lead time items will add another wrinkle once people understand the volume and timing constraints when things settle down.

Of course, the coronavirus is not yet contained and the actual shape of the infection and death curve is still evolving, but at this moment it is clearly worse than SARS, so that doesn’t feel very good.

If you have any additional qualitative data or perspective, I’d love to hear it.

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Feb 5 2020

New Podcast – Funding Frequency

I do a lot of random podcasts and especially like to be an early guest on new ones to help get them started.

001 – Brad Feld

The first five episodes are with me, David Cohen, Susan Conover, Amos Schwartzfarb, and Charlie O’Donnell.

Andrew Waine is the producer. He’s currently a senior at the University of Florida finishing his Bachelor’s degree in the Summer of 2020.

He reminds me of a young Harry Stebbings of the 20 Minute VC who reached out to me early (I was on Harry’s 65th episode in 2015), hustled, and did a fun interview with me where we cover the following topics.

  • What is in the new edition of Venture Deals
  • My time as an entrepreneur and entry into venture capital
  • Advice from Jack Tankersley, an early mentor
  • The differences between raising fund I vs. fund II at a VC Firm
  • How fund sizes impact investing strategies
  • How a startup can weather the storms of an economic downturn and the characteristics of the companies that survived the 2008 recession
  • My opinion on USV founder Fred Wilson’s blog post about the importance of follow-on capital
  • Why Foundry Group invests capital into other VC funds
  • What startup accelerator Techstars looks for in its applicants
  • Some resources and advice for a young person looking to gain knowledge about VC and Startups

You will even find out where I learned that “even pigs can fly in a hurricane” around minute six.

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Feb 4 2020

Book: Yes, You Can Do This! How Women Start Up, Scale Up, and Build The Life They Want

Claudia Reuter, now the Techstars GM Americas East (and previously the Techstars MD for the Stanley+Techstars Additive Manufacturing Accelerator), has a new book coming out called Yes, You Can Do This! How Women Start Up, Scale Up, and Build The Life They Want.

I read the final page proofs while I was in Mexico and it is an excellent book. It’s a combination of a memoir, startup guidebook–especially aimed at women, exploration of gender dynamics in the workplace, and inspiration for women who are considering starting a company. It covers topics such as how to:

  • develop and share your vision
  • deal with stereotypes and unconscious bias
  • leverage perceived weaknesses and turn them into strengths
  • balance life at high speeds and avoid burnout
  • cultivate the confidence to move from idea to creating a company with the culture and rules you want

Claudia includes a story of a half-dozen fictional people that unfolds throughout the book, bringing many of her points to life with tangible examples of how the conversations and dynamics unfold in the real world.

As I read through the book, there were multiple points where I thought, “Every man in any startup or fast-growing business should read this.” As a man in technology, I took away a number of new ideas, along with examples that were explained in a way that I wouldn’t have been able to do prior to reading Claudia’s book.

This is the fourth book in the Techstars Press series, following Do More Faster: Techstars Lessons to Accelerate Your Startup, 2e (Cohen/Feld), Sell More Faster: The Ultimate Sales Playbook for Startups (Schwartzfarb), and No Vision All Drive: What I Learned from My First Company (Brown). Look for more from (and about) Techstars Press coming soon!

Claudia – congrats on shipping the book!

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Feb 3 2020

Book: Walking: One Step at a Time

The Nan Madol

Erling Kagge’s book Walking: One Step at a Time was delightful.

On Friday night I had dinner with John Underkoffler. John and I lived together at college and have been friends for over 35 years, working together for the past 13 or so. Our conversation rambled on a variety of topics, as is usually the case when we spend 1:1 time together.

After getting after-dinner gelato at Gelato Boy (amazing gelato, terrible name) we wandered down the Pearl Street Mall and then circled back to The Boulderado where John was staying. After dropping him off, I headed back to my car with a short stop in the Boulder Book Store, where browsing and buying a few books is one of my guilty pleasures.

Kagge’s book jumped off the shelf into my hands, along with C.S. Lewis’s The Reading Life: The Joy of Seeing New Worlds Through Others’ Eyes. Two of my favorite things to do are reading and walking (or running), so I devoured Walking on Saturday and savored Reading on Sunday.

One section in Walking really stuck with me. Kagge, Arne Næss and a few others, including a professor of archeology, took a trip to Nan Madol. While observing one of the structures, the professor of archeology said, “It is impossible, impossible, impossible.”

Arne Næss responded:

“It is completely possible but, when considered with our conventional calcuations, extremely unlikely. Philosophically, there is a chasm between the imposssible and the fantastically unlikely.”

Now, the legend of how Nan Madol was constructed, according to Wikipedia, is:

According to Pohnpeian legend, Nan Madol was constructed by twin sorcerers Olisihpa and Olosohpa from the mythical Western Katau, or Kanamwayso. The brothers arrived in a large canoe seeking a place to build an altar so that they could worship Nahnisohn Sahpw, the god of agriculture. After several false starts, the two brothers successfully built an altar off Temwen Island, where they performed their rituals. In legend, these brothers levitated the huge stones with the aid of a flying dragon.

Fantastically unlikely, but not impossible. This concept reflected nicely throughout much of The Reading Life, which contains Lewis’s essays on things like “Why Children’s Stories Are Not Just for Children”, “Literature as Time Travel”, and “On the Dangers of Confusing Saga with History.”

In the future, whenever someone tells me, “That’s impossible!” I’m going to respond with “It’s fantastically unlikely but not impossible.”

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Jan 31 2020

Learning Spanish and Liking Horses

We create narratives about ourselves that become deeply entrenched in our minds and ways of being. Many of them are useless and counterproductive.

One of mine is that I am bad at learning languages. This is an artifact from junior high school. I took two years of French and, while I did ok, I didn’t love it. I hated my French III teacher, fought with her, called her an inappropriate name one day, and got kicked out of class. That was the end of my French language experience.

I have no recollection of why I chose to learn French instead of Spanish. I grew up in Dallas and now live in Colorado, so Spanish would have been a much more useful language to learn.

I recently spent two weeks in Mexico. While I was there, I realized that I was tired of not being able to say simple things in Spanish. More importantly, I was endlessly anxious whenever I said buenos dias, buenas tardes, or buenas noches since I always got them mixed up.

I had a similar childhood narrative around horses. My brother had a horse accident when we were little kids and I decided I was afraid of horses. He went the other direction and got a horse and became a great rider. Amy loves horses, so this has been an inhibitor in our time together since I never want to do anything involving horses. A few years ago we did a week-long vacation at a place that had a program to get comfortable with horses.

I painted a horse, I groomed horse, and I rode a horse. After a week, I was able to delete my self-limiting narrative about my relationship with horses.

For the past two weeks, I’ve been spending at least ten minutes a day on each of Duolingo and Busuu. They are different but both good. While a few hours on an app is a tiny beginning to learning a language, I already feel more comfortable just being around Spanish, saying a few words (mostly greetings), and am recognizing some of the things others are saying.

These days, when I catch myself repeating a self-created narrative, I’ve begun questioning each one of them. So far, none have held up to scrutiny as an actual thing.

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Jan 30 2020

Massachusetts Global Entrepreneur In Residence Five Year Results

I continue to be a strong supporter of legal immigration to the United States. A fundamental belief of mine is that entrepreneurs should be able to start their companies anywhere they want. A corollary to that is some of the historical success of the US as an entrepreneurial ecosystem has been being the place that entrepreneurs want to start a company.

Today, it’s hard to get a visa to start a company in the US. Our legal immigration system is complex and expensive to navigate, and there are few choices for entrepreneurs, especially aspiring entrepreneurs, who haven’t already managed to get a visa.

For the past five years, I’m been involved in an effort called the Global EIR program. It’s a national effort, led by Craig Montuori, that is modeled after an extremely successful program in Massachusetts, led by William Brah at the University of Massachusetts. The roadmap for starting a company on a visa is now well defined.

The results in Massachusetts have been extraordinary. Over the past five years, As of today, 66 Initial H-1B visas have been approved with 100% visa success rate. The companies founded by these entrepreneurs employ 940 people and have raised over $500 million in venture capital.

Imagine if we had this level of activity in all 50 states?

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Jan 29 2020

Distilled Moments: Poems By Dave Jilk

Dave Jilk was my first business partner (we co-founded Feld Technologies). The photo above is from Dave’s office at 155 Federal Street around 1991. We worked closely together for seven years before selling the company in 1993 to a public company called Sage Alerting Systems, which renamed itself Sage Technologies and then finally AmeriData Technologies. Well, at least the “Technologies” survived that naming transition …

Dave recently published a book of poetry titled Distilled Moments. I read it Sunday night and it’s delicious. If you are into poetry, a friend of Dave’s, or just want a taste of something different from your normal reading stuff, grab a copy.

If, when I met Dave in 1983, you had told me that he would become a poet later in his life, I would have spit out whatever food or drink was in my mouth at the time and rolled around on the ground laughing for a while. I think the only time I ever associated poetry and Dave in my mind is when he would use a phrase like “Physics for Poets” to describe a class at MIT I was considering taking.

Dave and I met on my second day in Cambridge in 1983. I spent my first day alone, feeling very confused and lonely as I wandered around MIT trying to figure out where I was. I crossed the Mass Ave bridge into Boston, had dinner by myself, and went to back to my assigned room in Baker House with three other guys, two of whom immediately got stoned and smoked pot for the rest of the evening (not my thing.)

The next afternoon was the MIT Freshman picnic. On a beautiful fall Cambridge day, Paul Gray (then president of MIT) gave a welcoming speech where, in typical MIT fashion, he said something like:

Look around. Your fellow freshmen are the best and brightest from around the world. Never forget that it is simple math that 50% of you will be in the bottom half of your class.

After talking for a few minutes, he ended by shouting “Let the Rush begin!”

Suddenly, hundreds of people descended on us with signs for their fraternities and living groups (there were no sororities at MIT in 1983.) Two guys I didn’t know – Mark Dodson and Ramanujam Manikkalingam – grabbed me and said, “Come with us.” I jumped in a van, was driven to ADP at 351 Mass Ave, and never left.

I met Dave that first night and we have been best friends ever since. He was a senior when I was a freshman, so we didn’t live together for that long, but we spent a lot of weekend time together. I became close with his first boss, Will Herman, and with Warren Katz (who we met through our seventh employee, Ilana Katz), continue to be extremely close friends.

Now that you’ve got the backstory, I’ll finish this post off with a few teasers from Distilled Moments that I loved.

Following is Twenty-Three, a poem about the morning after a night out together.

This one is my favorite business-related one, titled The Elephant in the Room.

I’ll end the teasers with the beginning of Take the Gloves Off, which is awesomely creative and full of business cliches.

There are many more. Support a friend, a Boulder-based poet, someone who I never expected would be a poet, or just a dear, dear friend by buying a copy of Distilled Moments.

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