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Startups

Career Advice

Startup or large corporate – which is best for you?

November 16, 2018

Everyone has an opinion of whether you should work for big companies or small, startup or corporate, but the answer is very personal. I was coaching a group earlier this week and the question came up as “I am working for a startup but everyone is telling me I should go work for a big corporate now for my resume – what do you think?”

I believe there is no right way, no right answer. But there are dimensions to consider as you map out your next step.

  • Are you working for good, experienced managers? Do you respect them, and will they invest in you? If so, stay with them as long as you are growing and learning – whether you are in a small or a large company. It is so much more efficient to learn from good managers than from bad. There are a thousand ways to do a job badly and a handful of ways to do it well so learn as much as you can from people you respect for as long as you can.
  • Are you working for a winning startup? I have found many employees are very loyal to their company, even when in their hearts they know it is failing, and yet if the company is not winning you may not grow. It could be that you get more experience because you get a battlefield promotion, but more likely if the company is not growing your responsibilities and span of control will not grow. Remember 9 out of 10 startups fail. So if you are early in your career and want to advance fast try to find a startup (if you chose to do one) that is growing.
  • Do you long for more formal training, If so then it’s probably time to go to a larger company and grow your large company skillsets. These may be larger team management, scale, working with international teams, and probably politics. Larger companies will typically either having training programs internally, or have the budget to send you out on courses. I was fortunate enough to be sent to the Stanford Executive MBA program, all expenses paid (while I was pregnant) because the company wanted to invest in me. It was a fantastic experience for me, a math major with no business training, to learn the basics of finance, marketing, management and organizational development in a crash course. A startup would not have been able to invest in me that way.
  • Do you want to manage lots of people? Again, a large company stint may make sense for you. It is certainly a great experience to manage a large team of people or a large P&L at some point in your career. But with that will come both good and bad politics. Good – the art of influencing people in a constructive way; Bad – the art of backroom lobbying and selfish decisions. So prepare yourself for both.
  • Do you need stability? There are times in all our lives when stability is very attractive, such as when we are caring for an ill family member, and times when it doesn’t seem important. Be aware of what you need right now.
  • Do you need to make a high end salary for the level/job you are in? Larger, established companies will typically pay more, especially if you are in a very competitive job category. Startups will typically want to conserve cash. Make sure you know what you are worth in the market at large and then consciously make the decision that works for you and your financial plans.
  • Do you enjoy risk and want to have fun? Well then, a startup is probably for you.

And when you are all done, looking back on your career from a beach or with grandchildren on your knee, what’s important is that you have lived to your highest potential (whatever that means to you) – and that you have worked for and with great people in fun companies. Life is too short to work in low quality companies, with and for bozos, when there are so many terrific companies and people to work with.

Photo:  Sheep in the Roman ruins of Baelo Claudia on the south coast of Spain. © 2018 Penny Herscher

Career Advice

Managing the switchbacks of your career

July 18, 2018

A successful career is rarely a straight line up the slope. It is so often a weaving up through experiences and it’s important to recognize how and when to weave.

I did a coaching session yesterday where just this question came up. This time the individual had years of engineering, both as a stellar software engineer and also as a manager and can feel he wants to do more – can do more – and knows he needs to broaden his skillset.

I have a handful of principles which can be helpful when you are wanting to grow and create more upward momentum in your career:

  1. Make sure you are in a critical path for the company (and this will vary by industry). For tech companies success hinges on sales (revenue and cash) and product. In, and in-between, these functions there will be a number of critical roles and projects. These could be supporting the top customers, could be developing a handful of critical new relationships, could be bringing a new product to market. Learn what these are and which would be i) new to you, ii) challenging for you and iii) valuable to the company.
  2. Make sure you advocate for a new position you can be successful at if you work hard and learn fast (which I assume you would!). It’s important that you succeed in each role you take on even if it’s a bit rocky as you come up the learning curve. It’s OK to make short term tactical mistakes in your career, it’s not OK to make strategic ones.
  3. Stay visible. In some companies a tour away from HQ is truly valued but in others it may be the kiss of death for future promotion because you are out of sight and out of mind. If you do decide to step away from HQ to stretch yourself – for example to China or DC – agree on a time frame with your management (e.g. 2 years) and be sure to discuss what you would be eligible for when you come back, but before you go.
  4. Be aggressive – that you are very focused on personal growth – but humble  – that you know you have a lot to learn. I’ve had too many engineers tell me they know they’d be good in sales while massively underestimating how truly skilled great sales people are, and too many sales people sure they can do marketing (better than marketing is doing it) with no comprehension of what it takes. If you have not worked in a job I guarantee you underestimate it, so be humble.
  5. Be direct. It’s rare, especially in small companies, that your executives are sitting around thinking about taking risk with you to broaden your career outside of what’s immediately expedient for them so don’t beat around the bush.

If you’ve been in the same role for 3 years look up, and across, and consider stretching yourself in to a new role – unless this is truly what you want to do for the rest of your working life.

Photo: From the garden of La Foce in Tuscany © 2012 Penny Herscher

Leadership

5 reasons it’s critical to truly understand your P&L

July 20, 2017 Leave a comment
In the last month I have had the experience of three small business leaders talking to me about their P&L in moment-in-time terms. Something like this… for this quarter (or this year) we’ll make $X, we spend $Y less than I thought so we’re $Z ahead. Usually followed by why $X and $Z are so great, and how they’ll spend those extra dollars they are ahead, or why their company is successful as a result. Naive.

Unless you have a steady business that has been the same for a while, is not growing and is profitable the moment-in-time view of your business tells you very little. It might make you feel good that your bottom line is black and not red, or not as red as you thought it would be, but all you’re getting is the warm and fuzzies – no insight.

So, five reasons it’s critical you truly understand your P&L over time – to be able to answer what is your revenue, costs, profit/loss and collections every quarter (or month depending on the cadence of your business) for the last year and the coming 2 years?

1. Cash

Cash is Queen for a growing business of any size; it’s the fuel for growth and the security for longevity. So you need to see how cash flows every month for the foreseeable future. Unless you are selling products for cash in the local market, every sale comes with a delay in collection. Sometimes it’s when the credit card vendor pays you for your product, sometimes it’s 90 days later when your customer’s AP department pays you, but there is typically a delay. But you are paying your people anyway, and maybe opening up new offices, hiring etc ahead of being paid for your sales.

This means the collections line item in your P&L is critically interesting. What cash are you collecting every month, and so what is your ending cash every month after your expenses? You need to have this carefully modeled over the next 18-24 months, and intimately understand it so that as your business fluctuates and changes you know what it will do to cash flow. Combine this with a need to always have at least 6 months of payroll in the bank and this will tell you how much risk you can afford to take with your business at any moment in time.

I’ve seen businesses where the CEO is telling him/herself how great they are doing because of all kinds of positive indicators but the cash collections line is not changing over time, it’s not growing. You can’t hide from cash flow and so it’s a great indicator of the true underlying health of the business. Are the dogs eating the dog food and, more importantly, are they paying for it?

2. Measuring your progress

If your business is immature (less than 10 years old) then almost no matter what business plan you build for the next 24 months it will not be what you actually do. Something will change, you’ll do better, or worse, or differently than you thought. But having a 2 year outlook and then measuring yourself against it is how you’ll learn the nuances of the business and learn how to predict and measure the changes.

Going through the discipline of putting an 8 quarter plan together together to present to your stakeholders and your management team forces you to think through what assumptions you are making about your business. Don’t tell me you don’t know enough to do this yet – if you take someone else’s money, or even hire other people to work for you, then you are responsible, and that means you need to put your assumptions down on paper and fold them into a P&L model so you can measure your progress against your assumptions and course correct accordingly. You can’t correct your course if you’re not on one.

And don’t fall into the trap of comparing your business to last year’s business at the same time. While an interesting statistic it tells you nothing except whether you are growing. It does not tell you how you are doing against your plan and so how your top line and expenses are flowing into cash. See #1.

3. Learning financial management

No-one comes out of the womb knowing how to manage a P&L. Most students graduate college without ever learning how to read a P&L and a balance sheet (a crime I think) so no one expects you to just know it. If you are not a trained financial professional, but you want to lead a business team or be a CEO then you need to learn it. Step 1 take a class. Step 2 learn on your own P&L. Do the spreadsheets yourself until you understand the relationships between revenue and collections, costs and margin.

Yes you’ll need a CPA to do your books, but when it comes to forecasting the next 2 years of your business there is no reason you should not be able to build a simple model yourself. I despair of entrepreneurs who hand the financial modeling off to someone else, and never really grasp the financial dynamics and dependencies of their business.

4. Valuing your business

As I mentioned up front, unless your business is mature and not growing then how it is doing at any single point in time does not tell you much about it’s true value, except a low value such as 1X revenue, or 1X profit. If you want to establish and communicate the value of your business to, for example, a potential investor, you need to tell a story over time. Last year, and next 2 years at a minimum.

Except with mature businesses that generate cash, businesses are valued on their potential. How much revenue and profit will the business generate in the future? Is it growing, and so what does that mean for future cash flows? Should it be valued as a multiple of LTM (last twelve months) revenue or NTM profits?

Building, and deeply understanding, your business’ next 2 years of growth and being able to present it in a believable way (because you understand the dynamics so well) is how you establish value with an investor or buyer.

5.  Communicating with your employees

Your employees, or partners, are following you because they believe. Hopefully you’re paying them a fair wage, but they are probably with you because they believe in what you are trying to do. Even in a large company this can be true – people join a team because they believe in the mission.

So given they are following you, you need to keep them updated on how the business is doing so they can both help you solve problems, and celebrate with you when things go well. I am a big believer in sharing the basic P&L of your business with your leadership team at a minimum, and with your employees once it stabilizes. If they don’t have a good understanding of the future of your P&L how are you going to enable them to fully participate in the building of the business? And how will you celebrate the wins with them if they don’t know whether you are making the plans you set out or not?

I don’t buy the argument that employees are not able to handle the numbers – that it will “scare” them. Yes you don’t tell them you are running out of cash, but if you are hiring college graduates you can at least share your top line plans with them and if they don’t understand the basics of a P&L you can teach them. They will thank you for it, and be much more vested in the end results of the business if you share progress with them. I recently put together a 2 hour class on the basics of reading a P&L for a friend’s business (where most of the employees have liberal arts degrees) and it was not only great fun for me and the employees, but it gave them a starting point to understand the terrific progress the company they are working for is making.

Bottom line – whether your business is wine or weather prediction, if you are leading a team with financial targets, or are the CEO of your own venture, you owe it to yourself to learn and truly understand your own business’ P&L.

Photo: Photo Frescobaldi Winery, Tuscany  © 2016 Penny Herscher

Leadership

Startups and adrenaline are a potent mix

April 26, 2017 Leave a comment

Fred Wilson’s post a few days ago “Starting is Easy, Finishing is Hard” speaks to the grind going on for many tech startups today. He says the easy exit days feel as if they have gone and for many it is taking raw tenacity to finish.

And he’s right. When you are the CEO or in the founding team of a startup the years are long. It feels as if it will take forever to get to the next stage of product, or growth, or market development.

But the days are short, and it’s what makes the days short that draws in many founders. It’s the adrenaline. Yes they should have a vision, and passion to change the world (a passion to get rich typically backfires) but without a love of the adrenaline rush they would not last a year.

You feel the adrenaline every single day. When you close a deal, when you talk with your team about your dreams, when you pitch a VC (whether or not they bite), when you have a vision match with a huge customer, when you can feel the forward progress. Your heart beats faster, your hands may shake. It’s hard to come down (many startup CEOs I have known, me included, self medicate with a stiff drink at the end of the day), it’s hard to sleep, but it makes 5am exciting because you know the rush is going to start again the next day.

In many ways you need the drug (it’s a hormone) in your body. It makes your mind sharp, it increases your intensity, it helps you focus on exactly what you need to do second to second to win in each situation. And succeeding is all about having the tenacity to win against a million people/circumstances/barriers that want to stop you every day.

Getting a new company up and running and successful is SO hard that I don’t advise people to do it unless they simply cannot stand not to, and only then if they have the stomach for the stress and can manage themselves through it. I am working with a brilliant founder today who is swinging from the heights of heaven to the depths of hell as her company leaps forward and who has designed a swimming and yoga weekly schedule simply to help her manage the stress.

And what’s interesting about the adrenaline phenomenon is one day it all stops. I ran into a girlfriend at the airport this week who ran a hugely successful company, and is now retired, and as we compared notes she told me she just stopped enjoying the rush, and then she knew it was time. When you dread the 5am calls, and you dread taking another redeye, and while you can still get the rush in front of a customer, but not every day, then it’s time to hand the baton to the next woman who wants to change the world.

My Personal Journey

How 2016 rocked my world as I talked with women entrepreneurs

January 4, 2017 Leave a comment
 I am more convinced than ever that there is a bright future for women entrepreneurs and 2016 proved it to me!

I stepped back from being a full time CEO a little more than a year ago. It was time, for family reasons, and I set out to change my life. I still work (I serve on two public company boards) but I decided to spend a great deal more time with my father and my family than I have ever been able to do before, and to prioritize my time to giving back. But I had no idea what that really meant for me – what could I do that was meaningful other than work as a CEO?

I decided that I would just say “yes” to every request for help from entrepreneurs, especially, but not exclusively, women. Not that I would be a pushover and do anything I was asked, but I would say yes to any request for a meeting from an entrepreneur who wanted advice. A first meeting at least and if I thought I could make a difference I’d keep saying yes. I wish I could say I was inspired by Shonda Rhimes’ TED talk but I did not see it until I was well into the year. Instead I was thinking of it as following breadcrumbs without knowing where they were going to lead.

It’s been an extraordinary year, it’s taken me in directions I never would have expected, and it’s changing me.

I’ve met with many amazing female entrepreneurs. Aged twenties to sixties. A psychiatrist who has figured out how to use technology to dramatically reduce the cost of cognitive testing for veterans with PTSD or the elderly with dementia, a media executive with a passion for travel who’s changing how people explore the world, a technologist who’s figured out how to measure skin tone so you can buy the right makeup for your skin, a CEO with an IoT product that can tell you all about the water leakage risks in your commercial property assets (something I did not know was a big problem), a woman revolutionizing the sex tech industry, a woman with breakthrough security technology to protect your phone, a visionary who set up the first and only incubator in Gaza… a new calendaring app, a better travel itinerary planning app, a next generation geospatial model, better on-chip failsafe technology, the artistic director of a ballet, networking technology, machine learning technology … the whole gamut! I have found I love talking with entrepreneurs and CEOs. I love listening to their stories about their businesses, what’s working, what’s scaring them, how they are getting funded.

I ask questions, ad nausea, and then focus in on one of two challenges they face and discuss with them how to overcome them. It’s fun for both of us, and I realize I can help many of them. No judgement, just the experience of being there myself more than once before. And I now believe, more than ever, it is much harder for women to get venture funding than men. I have far too many data points now!

I’ve met with women hedge fund managers who only invest in women led companies, recruiters whose only business is placing women on boards, bankers who want to do deals for women CEOs. The movement is happening. Women are, more than ever, proactively helping women. I threw a book party for Joann Lublin’s new book Earning It – the party was 3 days after our horrific election – and I saw ~60 women (eating my husband’s terrific food and drinking good wine) talking to each other about how this cannot be our future and becoming even more committed to make a different future for women.

But I also visited Israel for the first time and I was hooked. I found Israel fascinating and a historical goldmine but then I spent time in the West Bank with family who are orthodox settlers, and at the same time joined a small group trying to help Palestine with Silicon Valley technology. Wow, that is a complex area. I am reading like crazy trying to understand, but it’s also an area where young women are starting businesses and where I can help.

2016 wasn’t all about female entrepreneurs. I’ve spent 25% of the year in Europe. Driving with my Dad through France, quiet days with him in England helping him write his life story, Italy with my daughter, with my husband, with my sister. Enough time that I know I was truly present for my family, for the first time in a long time.

I am not unaware that it is a privilege for me to be able to do this, but I also now recognize that it is not only money that holds us in our jobs. It is also social status, recognition, a sense of being important. One of my new friends, now in her seventies, and who had a very big, high profile CEO job, told me one of the things she found most difficult about retiring was not being important any more. We are all, in our own ways, driven by ego and giving up the identity that defined me for most of my adult life has had it’s hard moments, like when a man asked me at a fundraiser what I do for a living and when I said I am retired he said “oh” and walked away. I’ve had plenty of “invisible” moments this year and it takes some getting used to.

We may feel it’s hard for women entrepreneurs in 2017, but the groundswell is growing. The number of smart women building businesses inspires me. The number of powerful female CEOs inspires me. And in 2017 I am open for business to help them in any way I can!

Leadership

The new self-help book for entrepreneurs “Build Something Great!

February 4, 2016 Leave a comment

Thinking of starting your own company… or you’re already in it? There’s a fun new self-help book out for entrepreneurs called “Build Something Great!: Fifty Best Tips for High-Tech Startups” that is a must read and excellent reference book for anyone wanting to win the first time.

Written by two of the Simplex founders, professors Resve Saleh and David Overhauser, it boils down valuable startup advice into 50 tips on how to build your own successful venture.

And yes, I admit I’m biased since Resve and David hired me to be their CEO. But we learned a lot together as we built a world class team and important technology family into a really fun company and a very successful IPO.

The book is full of useful and easy to consume advice on the steps you’ll take in building your company. As Aki Fujimura, who was on our team and COO at Simplex, says in his foreward:

“There are a thousand ways to fail and only one or two ways to succeed.
Trying to learn what not to do from a failure only makes it 1/1000th
less likely to fail again. We all make plenty of mistakes of our own. We
can learn from failures in real life without reading a book. The only
way to learn from a book is to learn about what leads to success. The 50
tips here will guide you to help make your company more likely to
succeed.”

The book is available on Amazon in both paperback and Kindle formats.

The authors in January 1996 (before we were introduced).
David is on the left, Resve is second from the right.
Leadership

5 Pros and Cons of Being CEO of Your Company

January 27, 2015 Leave a comment
Being in the role of CEO can be terrific. You’re it. You’ve gained the power to put your brilliant idea into practice. You’re synonymous with the company for your customers, your employees and your investors. Your family is proud of you. You feel like the sky’s the limit.

And yet, the role is a double-edged sword. If your company is a big public company, you can possibly be looking at $10, $20, $30M+ a year. Or very easily get fired. If it’s one of the handful of $1B unicorns coming out of Silicon Valley, then this time around it’s likely more money than you ever dreamed of. But for most CEOs, the truth is not in the extremes.
It’s in the middle.

So before you decide to be the CEO of the company you want to create, here are a few Pros and Cons to consider first:

1. Pro: You decide the strategy and what’s important. When you are CEO you are ultimately responsible for the strategy: What to build? How to get to market? Where to focus? You get to put your ideas into action and test if they work. Then, when they do succeed, the sense of satisfaction is unbeatable. If you are the technical founder, and command the respect of those people around you, you also won’t have to hear much disagreement. People are following you because they believe in your vision and your strategy.

Con: You’ll work harder than you have ever worked in your life. It’s true not all CEOs are working on overdrive but when you’re trying to get a
company off the ground, there are always more mission critical things you need to do that require more hours than there are in the actual day. Look forward to the necessary red-eye flight you need to take to close a deal. The time pressure will seem worse than your college finals did and prepare for this pace to go on for years. Keeping physically fit with exercise will become a requirement just to survive the exhausting workload.

2. Pro: It’s an ego trip. It’s hard to be CEO unless you have a serious ego. Not that you have to be a jerk, but exuding confidence will ensure that people can look to you to lead them. In that sense, then yes, it’s an ego trip. Which means that, if you are already seriously thinking of becoming the CEO of your startup, then you probably have that necessary ego to both embrace and enjoy it.

Con: You’ll be lonelier than you’ve ever been in your life. That cliche “the buck stops with you” is absolutely true when you are CEO. There is no one to turn to if you have to make a hard decision. Your board is there to give you advice, but they are not going to tell you what to do. Your team is there to provide counsel and debate with you but in the end, they’ll look to you to make the difficult decisions. And there’s no one you can talk to. It’s unfair to burden your friends and family with these work related stresses. It’s you and the wall (or in my case the dog) talking it out sometimes.

3. Pro: You get to hire your team. When you are CEO you get to hand pick your team. You choose the structure of the organization, and hand pick the key people you want to build the company with. You choose the skills, the personality, the experience–and they will seem to become as close to you as your family. Building teams is a wonderful experience–and the best trait of a successful company comes down to the talent.

Con: You’re the one who has to let people go. It’s hard to consistently hire great talent which means sometimes you’ll make mistakes. You’ll hire a VP of Sales who looks and sounds good, but can’t build out a team themselves (think of Yahoo’s spectacular failure recently hiring and then firing of Henrique de Castro). There may also be a time when you may really like an employee but who struggles to consistently perform. When you are the CEO there is no ducking the responsibility of firing the people who have to go, and striving to do it with respect and kindness is an art form.

4. Pro: Customers rely on you to solve their problems. Most great ideas come from trying to solve a problem for someone. In the enterprise world, you’re most likely solving a business problem for another company. You could be putting a critical process in the cloud, so it’s more cost effective, or automating a solution for a time consuming technology problem. It’s a rewarding feeling to know you helped customer’s solve problems and improve their overall business–and of course make money for both of you in the end.

Con: Customers can jerk you around. A former CEO of a software company with $1B in revenue once told me he quit, in the end, because of some of his customers. They’d hold deals until the last day of the quarter, and then force him to drive the price down to get the deal done. After 10 years of building his company and providing solutions for countless customers, he was overwhelmed with the lack of respect his customer’s gave to his business. As you’ll find, this is not always the case and there will be times you are providing value to your customer but professional patience and just ‘sucking it up’ will still be required.

5. Pro: You set the culture for your company. And this many especially appeal to you if you are sick of the Silicon Valley bro culture. Many people spend 8-10 hours a day at work. And all this time should be joyful. Why work for a company, if the culture is not enjoyable? So as CEO, one of the most important responsibilities you have is to set the right culture of the company with the actions you do every day and not just what you say. Great CEOs, like Reed Hastings of Netflix, make this the centerpiece of their leadership. They focus on the areas they believe create a successful company and a positive environment to work, which in turn assists in better recruitment, and increasing their impact with the community.

Con: It’s your company. Well, is that a pro, or a con? You’ll find it depends on the day. Some days you’re so proud of the solutions your team provides that you could burst. But this will not be every day, definitely not every day.

So, if you want to be the CEO of your company then brace yourself. It’s a wonderful experience, and can be a thrilling ride, but it’s a roller coaster with many ups and downs. Maybe write down why you want it before you start, so that on the dark days you can remind yourself why you are doing it. Me? It was about creating a great culture.

Leadership

Venture Capital Is Not All Equal

December 16, 2014 Leave a comment

Like people, VCs come in all styles, so here are 5 characteristics to consider as you interview potential investors.If you want to raise venture capital to fund your new company and your great idea, plan out your vetting process first, because all VCs are not the same. Some are really helpful, but some are horrible and damaging to your company.

  1. Pick someone who has the same Vision and Values as you. You are (hopefully) in your venture because you believe you can change the world (if you are doing it to get rich, stop now, because you don’t get rich in the startup world by trying to get rich, you get rich by building
    something) and it’s very important your investors want you to change the world too. There are many tough moments of truth when building a company, and none more so than when you get an offer for your company before you think you are ready–before you have built the strategy and value that you believe is possible. That moment is when you find out whether your investor truly shared your vision on how to change the world or was just telling you she did.
  2. Pick a partner who can do heavy lifting for you when you need it. Great venture partnerships have a rich, deep network to help you recruit, develop partnerships, find initial customers, manage sticky HR issues and even find office space. Andreessen Horowitz are changing the game with the amount of help they give their ventures. They have teams of people to help you: recruiters, sales people, marketing people and they’ll get you started with office space. Ben Horowitz’ book, “The Hard Thing About Hard Things,” is packed with advice on building a company and is a good example of the type of advice you can get from a great VC who’s built their own company in the past.
  3. Avoid the money-based VC who’s motivated by running a portfolio–often former investment bankers. Find someone who walks the talk and truly builds great companies. If you can, find a VC who has been doing it for more than 10 years and who has a great track record–and interview their CEOs–or find one who’s been a CEO, built a good company and taken it public. When you work with someone from a leading firm like Benchmark, Oak, Sutter Hill, Sequoia, Greylock or the new kids on the block, Andreessen Horowitz (and they’ve been a CEO or a VC for many years), you get access to a level of wisdom and advice that you simply won’t get from the a small firm with relatively inexperienced investors.
  4. Don’t get greedy. Yes, valuation and how much of your company you need to give away is important. But it is just as important that you get great advice and that your management team and employees make money too when you are successful. If you get greedy and aim for the highest valuation, a couple of bad things can happen. First, you can end up with investors who don’t have the experience you need (one of my friends has a Saudi Prince as an investor–very difficult to get alignment on strategy), but second, you can find yourself in a situation with such a high preference and threshold valuation on your company that unless you are the next Facebook, only your investors will make money when you sell (and maybe not even them). There are many hot startups in San Francisco today who will face this problem when they try to get to liquidity. A great VC will coach you through this and not be greedy either.
  5. Pick someone you enjoy being with. Building a company is an intense, emotional experience. Most companies take many years to mature and if you are going to meet with your board every month for 5 years, and at dinners and strategy discussions in between, it certainly makes the
    journey more fun if you enjoy interacting with them. Of course, in the end, you do need to get funded and you may need to take what you can get, but if you have the chance to be selective, the right investor is more important than the highest valuation because you’ll build a better company and change the world (and make more money for you, your team and your investors along the way).