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Venture Hacks

Advice and introductions for entrepreneurs.


VH Twitters: Self Loving EditionOctober 9

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Here are the latest great quotes from our Twitter feed (RSS):

“It is an odd reflection on the priorities of our society that we value finance over technological innovation.” - Peter Thiel

Eric Ries

“At IMVU, we opened up our board meetings to the whole company.” - Eric Ries

“Every startup has a chance to change the world, by bringing not just a new product, but an entirely new institution into existence.” - Ries

“In a startup, both the problem and solution are unknown.” - Ries

“Lean startups can be the most capital efficient companies in the world, because they strive to prevent energy from being expended uselessly.” - Ries

“Th

What should I do before signing a term sheet?October 7

Yesterday, I was brainstorming a list of things-to-do with an entrepreneur who is getting ready to sign a term sheet.

After searching through the Venture Hacks archives, I realized one of our posts already covers it: How much diligence should we do before signing a term sheet? I think that post mostly stands the test of time—problem solved.

I revised the post to include this question for prospective investors:

“Do you agree with our plan for the next two/three/four quarters?”

Discussing this before you sign a term sheet has a few benefits:

  1. You learn what it’s like to work with the investor—before you marry him for the life of the company. If you don’t like working with him, he may not be the right husband-for-life.
  2. You discover if your investor agrees with your plan. If he doesn’t agree with your plan or you don’t agree with his revisions, why do you want him to join the company? Are you really going to put someone on the board who doesn’t agree with what your plans?
  3. Getting agreement on the plan before the financing is normative leverage. If your investor wants to change the plan in the future, you can ask him to justify the change: “We agreed on a plan, how have the circumstances changed since we agreed on a plan, and why does that require us to change the plan?”

Completely unrelated (or is it?):

Get Venture Hacks via emailOctober 4

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Startup Lessons LearnedOctober 3

Go read Eric Ries’ new blog: Startup Lessons Learned. He’s a Venture Advisor at KPCB and a co-founder, CTO, and VPE of IMVU.

Eric blogs about one of my favorite topics: applying lean/agile to startups. Lean thinking is the number one thing you can do to make your startup more effective. His post on A new version of the Joel Test is a great place to start…

On board meetings:

“At IMVU, we opened up our board meetings to the whole company, and invited all of our advisers to boot. Sometimes it put some serious heat on the management team, but it was well worth it because everyone walked out of that room feeling at a visceral level the challenges the company faced.”

On solitary programmers:

“It’s not true that energized programmers primarily do solitary work; certainly that’s not true of the great agile teams I’ve known. Instead, teams should have their own space, under their control, with the tools they

The Laws of ProductivityOctober 2

The Laws of Productivity is a must-read presentation for startups that want to be more productive. Here’s a direct link to the pdf. And here’s my summary of the presentation:

Individuals

  1. Work 40 hours a week. (Working more feels like you’re doing more, but you’re actually doing less.)
  2. Work below capacity (say 80%) during those 40 hours.
  3. Consider spreading 40 hours across 4 days instead of 5.
  4. Get the sleep you need; allocate 8 hours.
  5. If you need a short productivity boost, work more for 3 weeks. But expect an equivalent reduction in productivity afterwards.

Teams

  1. Work in small cross-functional teams (< 10 people).
  2. Put team members in a dedicated and closed room.
  3. Try not to split people’s time across multiple teams at once.

Thanks to Dan Cook for creating the presentation and Andrew Chen for bringing it to my attention.