When I started this blog, I committed to not shy away from the difficult conversations and this one has been brewing for a while. I am referring to when female founders are raising capital and are asked, “Do you plan on having children?”
You’ve just raised a bunch of money! Congrats! Now how much should you be spending? Last time we talked about how to use the financial model to understand the impact of raising prices and customer churn. On today’s video we are digging into how much money you should be spending and how it will effect your business in the future. What happens if you double or even triple your spend next year? Will your business thrive or shut its doors?
I am often asked, “What do you look for in an entrepreneur?”
I believe there are all types of successful entrepreneurs. There are visionaries that lay out bold initiatives and then delegate the day-to-day operations to others. There are technical, product first entrepreneurs that deeply understand the customer but do not have a clue how to organize, scale or lead teams. There are sales leaders that can tell a great story and convince early customers to take a chance on a new product, but are not detail oriented. There are operational leaders that focus on building great teams. But all of these differing backgrounds aside, to be effective, an entrepreneur must be intellectually honest with themselves about their own strengths and weaknesses and that of their team. In short, they must be self-aware.
“Build a great business and the exits will take care of themselves.”
I hate when people say this.
What is true about this statement is if you build a great business – you will have many exit opportunities along your path. I have been doing M&A since 2008 from both the buy side and the sell side - which offers me a unique perspective as I help entrepreneurs navigate these early offers.
This week we are taking a break from financial modeling to talk about REVENUE. There are so many different ways to describe it: MRR, ARR, bookings, CARR, the list goes on! They are not all the same. Watch today’s video to understand the differences and why investors are so interested in each. It will help you do a better job of communicating how your business is progressing.
I am maniacal about talent. I know that the right team with a shared vision and a growth mindset can make all the difference. I also know a wrong hire can be devastating. That is why I spend so much of my time scouting talent and recruiting. In fact, if I count it all up, I spend anywhere from 10-30% of my time on talent each week. Sometimes this is hardcore-we have an open position in one of our portfolio companies and we are actively sourcing against a specific set of criteria. In these cases, I am helping to source, interview, negotiate and close. More often this falls into the realm of networking with individuals from different background and skill sets - understanding their roles as well as their unique strengths, challenges and personalities. Then, waiting for the timing to be right to make a match for one of our portfolio companies.
Now that you know what a financial model is, it’s time to demonstrate the power of it. In today's video Troy demonstrates this using a financial model for a fictitious company called “Dollar Cave Club”. Find out how to use your assumptions to predict what could happen in 5 years.
In May, I wrote a blog about about Setting the Record Straight. I received many comments about the post and clearly it touched on something that resonated with many people in the venture community. What most people don’t know is that I had been talking about starting a blog for more than a year. As I wrote about in the May post, it is one way to create my brand within MATH. However, more importantly, it allows entrepreneurs and other investors an insight into working with me. It also allows an opportunity for me to give back to the community-to offer a point-of-view that might not otherwise be out there.