Category Archives: Apprentice VC

How to Be a Good Board Member – Both Sides of the Table

This is really good advice.

How to Be a Good Board Member – Both Sides of the Table

It’s funny – there is no training on how to be a good board member.

I have read some books – there are not many on the subject.

I like this one :: https://seedvc.blog/2018/04/27/startup-boards-book/

Wonder if there are others.

I keep trying to get better at this and this is why I have always said that VC is an apprentice trade. You learn via doing and it helps to have some folks around you who have done it that don’t mind mentoring. I can’t possibly grok everything so I have to do it to learn which means I am making mistakes as I go.

Good tips in the post – moving to notebooks with a pen is a big one I try to adhere to. Makes you think more and pay more attention to the meeting.

The “Doubling Model” For Fundraising – AVC

As usual Fred has a good framework and love his openness on how this works.

The “Doubling Model” For Fundraising – AVC

Of course this isn’t paired with what a specific startup needs to be doing to get these numbers but still a good working model.

Even comes with a handy spreadsheet :: https://docs.google.com/spreadsheets/d/1ARV_p0BqWIpsK7019p710qPZI72Jp_4NSU64xtblEyE/edit?usp=sharing

Should All of Management Attend Board Meetings? – Both Sides of the Table

Another awesome Startup Boards post by Suster.

Lots a of nuances here. I have been in some board meetings where I attend as the CTO but there were way too many people in the meeting.

I think there are reasons to have some meetings with lots of management but not sure that is a board meeting.

His chart in the post is good helps to give a good outline for how to handle different scenarios.

I am mostly dealing with seed stuff and the boards are small and generally the founders don’t bring all the management.

However I can see some scenarios where they might join and how that helps to expose the board and the senior management to the whole process.

Should All of Management Attend Board Meetings? – Both Sides of the Table

Who Should be on Your Startup Board? – Both Sides of the Table

#1 was here :: https://seedvc.blog/2019/02/20/startup-boards-both-sides-of-the-table/

Here is the next one in the Startup Boards series.

Who Should be on Your Startup Board? – Both Sides of the Table

This is super good. It’s funny when I see seed companies in SEA at seed either think they don’t need or want a board – or haven’t even thought about it.

I suggest it is good to have a board from seed or first institutional money in and from there on out.

I think his chart is pretty good – only thing we have noticed is sometimes at A the seed board seat is gone for the A board member. Maybe the seed investor takes an observer seat or something versus the board expanding to 5 members to accommodate both the seed and A board member.

On-demand home caregiving services platform Homage launches in Malaysia | Health | Enterprise Innovation

I couldn’t make the official launch but super excited to see Homage expand to the next location.

There is always the thesis that a startup has whereby they conquer the SEAsian region.

We all know it is way easier said than done.

So congrats to the Homage team on the execution of getting Malaysia going.

Nice work.

On-demand home caregiving services platform Homage launches in Malaysia | Health | Enterprise Innovation

The Seed Slump – AVC

This is a good post pointing to a few of the other threads and posts talking about the Seed Slump.

The Seed Slump – AVC

I think this tweet is good as well:

These are the takeaways:

  • seed to A graduation % obviously will go down
  • seed funds which stay small & generate smallcap exits can make

State of the Cloud 2019 · Bessemer Venture Partners

State of the Cloud 2019 · Bessemer Venture Partners:

Operate with G.R.I.T.

Operational rigor is what separates early stage companies from the most influential cloud leaders. But take comfort in the fact that it’s possible: Twilio’s Jeff Lawson and Shopify’s Tobias Lütke are just two examples of the many first-time founders who were running cloud businesses during and post-recession.

At Bessemer, we recommend cloud founders operate on G.R.I.T.— a critical set of metrics that resilient, enduring cloud companies use as yardsticks of success.

This is pretty good read but it may not be apparent what G.R.I.T. is :

G = Growth

R = Retention

I = Money in the Bank

T = Targeted Spend

Bootstrap or not.

Lots of chatter about this recently. 

Maybe it all kicked off with this article :: https://www.nytimes.com/2019/01/11/technology/start-ups-rejecting-venture-capital.html

I co-taught a class the other day at Insead and the subject was around boot strapping versus raising money. It really is an easy answer to be honest. If you can bootstrap then my advice, as a VC, is you should. Why take money if you don’t need to?

However people need to properly call out stuff – meaning bootstrapping typically means funding the company from operations or revenue. If you borrow money, have an angel investor or pumped in a bunch of your own money – you still took or made an investment. You now have investors and frankly this bit that VC money is bad but other money is good is silly. All money comes with terms and all of it expects to be paid back.

The only caveat to this is your own money could potentially be treated differently since you are the founder and you own the company. You could potentially never pay yourself back and settle yourself with an exit or profits.

I see so many silly deals in startup land where the founder stayed away from professional investors, say a VC, but took silly angel money and signed bad terms. I am quite sure those companies are worse off than another startup who took a round from a VC. Keep in mind angels can be evil, your rich uncle can be evil – obviously so can a VC. The point is know the terms of your money and its impact on you and your company.

The core difference in bootstrapping and not is really about growth. This does not mean that VC money encourages or forces growth – the VC can’t really force anything. It is your company but if you take VC money than you are expected to grow more or faster than if you didn’t. That is not some sinister plot by VC’s BTW – it is simply the notion that the capital is easier to get and more expensive therefore you need to use it accordingly. If you don’t like that grand bargain, then don’t take the money.

It is not like VC’s sit around and are desperate to throw money at someone in hopes of forcing them to do something they didn’t plan on doing. This is silly. Everyone knows what the deal is and believe me, we never write a check to any founder that isn’t on that same page.

That would be a waste of capital.

If you can build a solid business without VC money then do it. However don’t raise money from less than professional sources or with crappy terms and pretend this is better. Truly bootstrapping is generally from revenue. Most folks have a hard time doing that. If you can then great, you own more of the company and the outcome is generally better. That is the other myth to dispel – if you raise lots of money and don’t have a huge exit then you will take home less than someone who didn’t raise any money with a smaller exit. It’s just math.

If you have a method for using capital to grow much bigger and faster than if you didn’t take capital, plus you are comfortable with the terms and your investors then take the money. The decision rests with the founders, and VC’s only work with founders who already have arrived at making this decision for themselves.