The Startup Velocity Question: What Hinders Acceleration in VC Funded Companies?

I have been running 1Mby1M since 2010. I find myself saying to entrepreneurs ad nauseam that VCs want to invest in startups that can go from zero to $100 million in revenue in 5 to 7 years.

Startups that do not have what it takes to achieve velocity should not be venture funded.

Experienced VCs, over time, have developed heuristics to gauge what constitutes a high growth venture investment thesis. 

10 Women Leaders Running Bootstrapped Companies

As I was writing the previous post, 10 Women Leaders Of VC-Funded Companies, I noticed that six out of the 10 companies I included on the list followed aBootstrap First, Raise Money Later strategy.

My point of view is that as long as you follow this strategy, your chances of raising money is always going to be higher, whether you are a man or a woman.
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10 Women Leaders of VC-Funded Companies

As I wrote in my recent article, 10 Must Read Posts on Women and Entrepreneurship, I am concerned that the public discourse on feminism is veering in a victim-oriented direction, something I don’t care for.

As a follow-up to that post, I would like to introduce you to ten women who have raised venture capital as a founder CEO, a co-founder, or a non-founder CEO. In each case, I have linked to a detailed interview discussion I have had with the person, so that you can really dive into the points of view of these successful women.
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10 Must Read Posts On Women And Entrepreneurship

The issue of women and entrepreneurship has been top of mind of late. It is a topic that I have written a fair bit about, and want to share with you a shortlist of key posts: >>>

Billion Dollar Unicorns: Reconsider Your Aspirations

In November last year, I read a brilliant piece titled Reconsider by David Heinemeier Hansson, creator of Ruby on Rails, and a partner at Basecamp, a small 50-people collaboration software company. David starts the piece by saying:

It [Basecamp] didn’t disrupt anything. It didn’t add any new members to the three-comma club. It was never a unicorn. Even worse: There are still, after all these years,less than fifty people working at Basecamp. We don’t even have a San Francisco satellite office!

I know what you’re thinking, right? BOOOORING.

After all, in these crazy days of Unicorn mania, what wisdom does a founder of a small, 50-people company full of remote workers serving about 6000 global customers offer you, really?

You are wrong.

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Is It Normal To Start Your Own Business While Working Full-time?

Yes. Good choice. Keep going.

Bootstrapping with a paycheck is a mode of entrepreneurship that has become a major trend. Entrepreneurs are starting companies in droves while still holding onto their full-time jobs.

Two interviewers, Amina Elahi from the Chicago Tribune and Katherine Harvey from Union Tribune San Diego, recently asked me the same question: If you are bootstrapping a startup with a paycheck, when is the right time to quit?
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The Unicorn Bubble Will Burst – Here’s What Will Happen Next

My Entrepreneur Journeys book “Billion Dollar Unicorns” came out in December 2014. Leading up to it and after, I have had the opportunity to interview over 50 Unicorn entrepreneurs, and another 20 or so potential Unicorns.

By now, I imagine that you have read plenty of coverage predicting the crash of 2016. Experts hastily point out that it will be nothing like the Dotcom crash when middle class savings got destroyed. No. This one will only piss away a few hundred billion dollars. The damage is well contained.
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How Did Mark Zuckerberg Retain 26% Of Equity In Facebook After Raising So Much Money?

In general, my observation is that entrepreneurs retain a much higher percentage of equity if they can bootstrap their way to showing real traction, and then keep delivering solid performance metrics.

Obviously, Facebook was in high gear when Peter Thiel invested the first outside money into the company, so seed financing was not some $25k for 10% equity from an incubator. Rather, it was $500k for $10%. This started things off well, the cap table had lots of room for raising new rounds without ridiculous amounts of dilution.

Prior to the Peter Thiel investment, there was a small amount of friends and family money in the company, and by the time the first outside round took place, the company had started generating ad revenues. The valuation for this round was $5M in September 2004.
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Is Y Combinator Asking for Too Much Equity for 120k Worth of Funding?

I don’t think it’s a bad deal. $120k is decent seed funding, 7% is reasonable equity for that amount. Their previous deal, I thought, sucked (6-10% equity for $15k-20k). This one is reasonable.

Recently, Sam Altman released some statistics … they’ve funded about 900 companies of which about 7 unicorns have emerged. That part of the story is great.
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Incubators and Accelerators FAQs

This post answers some commonly asked questions about incubators and accelerators. I have answered these questions on Quora as well.

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How Hard Is Entrepreneurship Really?

There’s a really good story on Inc. on the dark realities of entrepreneurship. Not the rah rah, everything is so wonderful kind, but the brutal emotional truth: The Psychological Price of Entrepreneurship. Read it.

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