Matt Preuss's posts

Icarus: The New Unicorn?

In the “startup world” it is no secret that signaling matters. With opaque benchmarks, it can be difficult for a startup to determine how they stack-up relative to their peers. Success often comes in the form of hot awards, prominent investors, and coverage from mainstream news outlets. Investors are anointing hyper growth companies as “Unicorns” at a rapid rate.  Understandably so, startups have become fixated with hanging their prized unicorn status on the wall to share their success. But Unicorns are fake. Always have been and always will be. Looking at the data, unicorns may resemble a different mythical character: Icarus. “In Greek mythology, Icarus is the son of the master craftsman Daedalus, the creator of the Labyrinth. Icarus and his father attempt to escape from Crete by means of wings…

Matt Preuss - October 17, 2019

#Fundraising

First Meeting with a Potential Investor? Ask These 5 Questions

As a founder, landing your first meeting with an investor is an exciting experience. You’ve got your deck together and a talk track ready to go. You’re ready to walk in, paint your picture, and walk out with plans for your next meeting. However, we often see pitches can go off the rails and it can be easy to lose control of the conversation. But the first conversation should be most valuable for you as a founder.  The average VC + Founder relationship is 8-10 years so it is important to make sure that you’re building a relationship with the right people. As Elizabeth Yin, Founder of the Hustle Fund, puts it, “an experienced fundraiser knows that the goal in going into your first fundraising meeting is to ask lots…

Matt Preuss - October 3, 2019

#Fundraising

How Employees Think About a Fundraise

As a founder, the day-to-day can often feel like a juggling act. Constantly, trying to optimize time between building a product, growing revenue, attracting capital, and delighting employees. At the end of the day, one could argue that the overall health of the business comes down to attracting capital and retaining employees.  Without capital, a business fails to exist. Without talent, a business fails to flourish.  When a founder sets out to raise capital it can often feel like a siloed process where the rest of the company has little to no knowledge of the status. However, a company’s ability to fundraise is often one of the only external benchmarks a startup employee may have. So how do employees think about the company’s fundraise? And what does it mean for…

Matt Preuss - September 26, 2019

#Fundraising

Understanding Power Law Curves to Better Your Chances of Raising Venture Capital

The ideas below are largely based off of Scott Kupor’s new book, Secrets of Sand Hill Road: Venture Capital and How to Get It. We highly recommend giving it a read! If you’ve read our blog before you know we often compare a fundraising process to a traditional sales process. You might find potential investors to fill the top of the funnel, set meetings and build relationships with future investors in the middle of the funnel, and eventually close them at the bottom of the funnel. Throughout a traditional sales process one of the first things a seller does, is finding the motivators behind a buyer’s decision to make a purchase.  However, we often see founders forego the research to understand an investor’s motivation. Sure, they’ve got to return capital…

Matt Preuss - September 19, 2019

#Fundraising

Investor Development: What is it?

Customer Development was introduced by entrepreneur Steve Blank in the early 90s. Since its inception, customer development has become core curriculum for startup founders and operators. Customer Development is one of the parts that make up a “lean startup,” an idea introduced by Steve Blank and Eric Ries.  As the customer development framework has become a widely used approach in the startup world, we’ve decided how the process can be applied to a key facet of building a startup: investor development. In order to better understand investor development, it is important to understand customer development.  As Steve Blank puts it in his book, The Four Steps to the Epiphany, “Broadly speaking, customer development focuses on understanding customer problems and needs, customer validation on developing a sales model that can be…

What Talent Wants: Transparency in the Workplace, Ownership, Growth, and Collaboration

In his seminal 1964 book Managing for Results, business management guru Peter Drucker remarked that the success of a business is increasingly dependent on a company’s ability to effectively utilize talented people. Over the years, he spoke of a structural change from manager-controlled businesses to more decentralized structures and a paradigm shift from treating people as a cost center to viewing them as a resource. Peter Drucker believed in empowering employees through ownership, transparency in the workplace, growth, and collaboration. These ideas have stood the test of time and have become a vital proponent of startup culture. On Knowledge Workers: Even if employed full-time by the organization, fewer and fewer people are “subordinates”–even in fairly low-level jobs. Increasingly, they are “knowledge workers”. And knowledge workers are not subordinates; they are “associates”. – Drucker, Management Challenges of…

The Power of Wandering: Lessons from the 2018 Amazon Letter to Shareholders

Since his original 1997 shareholder letter, Jeff Bezos’ shareholder letters have become known as valuable resources that could feel right at home as material for an MBA course. The 2018 letter to shareholders is not different. Jeff drops loads of knowledge on customer obsession, intuition, curiosity, and the power of wandering. Innovation has always been a core part of Amazon’s rapid growth. It’s almost as if Joseph Schumpeter was writing about Amazon in his economic theory of creative destruction. Schumpeter strongly believed that capitalism was fueled by innovation and the entrepreneurs who are willing to innovate. Creative destruction can be defined as, “a process in which new technologies, new kinds of products, new methods of production and new means of distribution make old ones obsolete, forcing existing companies to quickly…

Tips from YC: Using Asks, Metrics, and a Recap to Power Your Investor Updates

Y Combinator has funded over 1900 startups since their inception in 2005. In the process of funding those startups, YC receives thousands of investor updates on an annual basis. As Aaron Harris, Partner at YC, puts it, “At YC, we get lots of updates from our alums. There seems to be a correlation between quality and frequency of updates and the goodness of the company and founders.” Over the past year, we’ve had thousands of founders share Updates with their investors and other stakeholders. While investor updates come in all different shapes and sizes, we’ve found that most, if not all, include some form of the following: a quick recap of the last month, metrics and KPIs, and specific asks for your investors. To this point, Aaron Harris of YC…

The 100th Edition of the Founders Forward: We’re here for you.

100 editions ago, we created the Founders Forward to give founders an advantage as they do the difficult work of growing their companies. We set out to be a go-to resource, collecting the best startup advice on the web in one place, week after week. Our aim has remained the same—helping entrepreneurs and startups succeed. 100 editions later, and we’re going stronger than ever. We’ve shared 878 articles, written by 572 different writers to over 10,000 startup leaders just like you. Below we share our 5 most popular original articles and 5 most popular shared articles from our first 100 editions. Thanks you so much for reading. Here’s to many more. Think you have content that will help founders move forward? Shoot us a message with an example to marketing@visible.vc…

The Pro Rata Conversation Can Be Tough (But It Doesn’t Have to Be)

Ask a seasoned venture capitalist about pro rata and they’ll likely give you a response reminiscent of someone talking about air travel: “It’s not what is used to be.” Put simply, pro rata investment rights give investors the ability to re-invest in a company’s future rounds in order to maintain their ownership %. Just as the early-stage venture capital landscape has changed over the years, so have the terms and relationships. With the explosion of early-stage investors and the increasing ease of starting a company, pro rata rights have become a point of contention and confusion for founders and investors alike.   Pro rata as an investor Pro rata rights are often seen as a main advantage for early stage venture firms and investors. The ability to follow on and…