Explicit goals
Regular readers of my blog know that I’m a big fan of deliberate action. And while I’m not a huge “make a daily list and check the items off” kind of guy (since like many VCs I’m somewhat scattered in my day to day work) I’m a huge fan of regularly checking in against a set of explicit goals or outcomes. To that end, I like to make myself a quarterly list of large “to-do’s” for each of the companies with whom I work. These aren’t general things like “talk to XYZ CEO more often” – they are specific outcomes for each company that I’m trying to drive towards. They range from “Hire a banker to sell the business” to “Develop a partner program” to “Close the Series C financing”. Clearly they aren’t things that I plan to accomplish alone and they are often developed in conjunction with management. I like the discipline of having to write out for each company I work with the main thing that I’d like to work on to really make a difference. …
February 20, 2008· 2 min read
Failure
I hate failing. But in the world of venture capital it happens – and on a somewhat regular basis with between 1/5th and 1/3rd of venture backed companies failing to return capital invested (see a great Union Square Ventures post on the subject here). It’s an excruciating experience. While the actual “failing” part generally happens very quickly the “leading up to failing” part takes forever. Typically the company goes through a handful of rounds of layoffs and pay cuts. A sale process is initiated to find a buyer for the business and perhaps an investment banker is hired. If the company has secured creditors (like bank debt or an equipment line) there are endless calls and negotiations to try to keep the lights on long enough to see the company through to a transaction. Analysis is done and re-done to figure out what the company’s obligations are if the business is liquidated. Tuff questions are asked about the payment of severance to employees, how to stretch payables and minimize future liabilities. Towards the end, as things accelerate, there are many emergency phone calls and sometimes heated and emotionally charged conversations. There are last minute hopes of some kind of sale, hail mary attempts to entice a buyer and last minute negotiations with potential sources of new capital. …
February 13, 2008· 2 min read
Sorry Fraser. You’re cold, but not the "icebox of the nation"
I have no idea why Fraser, CO (our adopted 2nd home) would want the tag-line “the icebox of the nation” given its focus on outdoor activity (its next to Winter Park, has a great fishing stream running through town and has miles and miles of back-country skiing, hiking and cycling trails). But apparently that is indeed the case. Fraser has been involved in long legal battle with the city of International Falls, MN for rights to the coldest place in the US. Yesterday, International Falls won out (it really is colder there!). …
February 13, 2008· 1 min read
VC’s are conspiring to take over your business
John pointed me to a Peter Ireland blog post and asks whether VCs really do co-opt businesses on a regular basis – investing with a plan to replace founders and bring in their own management. “[S]ounds kinda scary,” he writes, “the thought that a ‘clever’ VC could take away one’s company just like that…” Scary indeed. And while founding CEO’s are certainly replaced in venture backed businesses, it’s significantly overstated to say that “in about 50% of instances where an early stage company actually succeeds in raising venture capital, the founder CEO is fired within the first year”. …
February 12, 2008· 4 min read
Go Newmerix! Go!
I’ll keep this brief since I hear from readers that they are not crazy about me using this space for plugging portfolio companies. I rarely do that, but yesterday’s announcement from Newmerix was too good to pass up. You can read the full release here. For the 95% of you who aren’t familiar with the company, Newmerix provides a suite of tools for managing, testing and maintaining packaged application environments – specifically SAP, Oracle and PeopleSoft. I know – you’re probably wondering where you can get a copy for yourself (here), but actually it’s a sticky problem for a huge number of companies around the world. …
February 8, 2008· 1 min read
Only an 8th grade education
Here’s the 8th grade competence exam from 1895. Thank god I went through 8th grade about 90 years later… Hat tip to dad for sending this over. Grammar (Time, one hour) 1. Give nine rules for the use of capital letters. 2. Name the parts of speech and define those that have no modifications. 3. Define verse, stanza and paragraph 4. What are the principal parts of a verb? Give principal parts of “lie”, “play”, and “run.” …
February 5, 2008· 4 min read
"Even grown-ups don’t always get what they want"
Wise words from my 4 year old daughter after seeing my reaction to the Patriots losing the Super Bowl tonight. How true . . .
February 3, 2008· 1 min read
John Hancock
I had a bizarre request earlier this week to send in original signatures to some board documents that I had signed (a lender to the company in question wanted them). I regularly send around scanned documents – for everything ranging from board resolutions to investment documents (and shred the originals). I can’t think of the last time I actually had to provide an original signature. Strange . . .
January 30, 2008· 1 min read
Why I don’t sign NDAs
An entrepreneur started a meeting with me a few days ago by asking me to sign a non-disclosure agreement. I politely declined and thought I’d back that up with a post on the subject (I recall reading a few other VC blogger’s views on NDAs in past years – there’s certainly no lack of thought on the subject, although it does seem to consistently come up every year). VC’s, as a general rule, won’t sign NDAs. No – we’re not trying to steal ideas from entrepreneurs or pass confidential information along. We’re just not in a position to review, negotiate and keep track of literally thousands of NDAs that would result if we started signing them on a regular basis. Here are a few specifics from my point of view: …
January 26, 2008· 3 min read
Check the job boards
Finding information out about your competitors is something that all companies do on a regular basis. Trolling web sites, reading blogs, setting up news alerts for articles, talking to customers and prospects, trolling trade show booths and listening in on webinars are all pretty common occurrences in the business of knowing what you don’t know about your competitors. One great way to get a pulse on what’s going on down the street is to keep your eye on your competitors job board. The pace of hiring and the positions with open recs all give incredible (and generally overlooked) insight into the state of their business.
January 23, 2008· 1 min read