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On episode 5 of the Founders Forward Podcast we welcome Kyle Poyar, VP of Growth at OpenView Ventures. OpenView Ventures is an expansion stage venture firm with an extreme focus on software (SaaS) companies. Unique to OpenView is their team of in-house experts, like Kyle, that portfolio companies can call on to help tackle a growth issue. OpenView coined the term product-led growth. If there is one person who knows the ins and outs of PLG, it’s Kyle. About Kyle As Kyle and the team at OpenView continue to help SaaS companies grow and become market leaders he has seen it all. From the early days of defining PLG and the impact of COVID-19 Kyle is full of first-hand stories and the data to back it up. In addition to learning the basics of PLG we had the opportunity to dive into OpenView’s annual SaaS survey, the 2020 Expansion SaaS Benchmarks Survey, and uncover trends in 2020 and discuss what lies ahead for 2021. Mike Preuss, CEO of Visible, had the opportunity to sit down and chat with Kyle. You can give the full episode a listen below (or in any of your favorite podcast apps). What You Can Expect to Learn From Kyle Define and understand product-led growth Why PLG is more a “dimmer switch” than an “on or off switch” How public PLG companies are performing What channels perform the best for PLG companies Why PLG companies are extremely good at SEO Why PLG companies start growing most efficiently at $5M ARR How to compensate product leaders How to find the right VCs for your business Related Resources Kyle’s Twitter The 2020 OpenView SaaS Expansion Benchmark Survey The OpenView Labs Blog

On episode 4 of the Founders Forward Podcast we welcome Aishetu Dozie, CEO and Founder of Bossy. Bossy is a cosmetics brand with an intense focus on community and empowering women. Aishetu has years of experience in banking (at just about every major firm) and was looking for a new direction. She enrolled in a Stanford program and the rest is history. About Aishetu As Aishetu continues her founder journey she is learning and growing along the way. From her struggles to raising venture capital to supply chain issues amid COVID Aishetu has tackled every problem thrown at her. The conversation does not stop at bootstrapping Bossy — Aishetu shares all sorts of amazing stories on own personal life and journey as a founder. Plus, she was recently featured on How I Built This so we were particularly thrilled to hear about her experience. Mike Preuss, CEO of Visible, had the opportunity to sit down and chat with Aishetu. You can give the full episode a listen below (or in any of your favorite podcast apps). What You Can Expect to Learn From Aishetu How she transitioned from banking to beauty How Aishetu has faced the struggles of 2020 How Bossy has built a community How Aishetu has bootstrapped Bossy How being a guest on How I Built This impacted her business Related Resources Bossy Beauty Aishetu’s Twitter Aishetu’s How I Built This Episode Bootstrapping 101: Pros & Cons of Bootstrapping Your Startup We created the Founders Forward Podcast to learn from people like Aishetu. For founders looking to learn from a newly minted founder that is figuring it out, Aishetu has you covered. As you scale your business, having the right guides at your side can make all of the difference. Each episode we’ll talk to fellow founders, investors and experts. We’ll dive into their zone of genius as well as hear about their past mistakes to give you a better chance of success.

What is Private Equity? Making the decision to take on external funding should not be taken lightly. A decision to bring on additional capital and more importantly, where that capital comes from, can make or break a business if not fully understood. Two types of investment that a new business or startup might consider are private equity and venture capital. Private equity and venture capital play critical roles in a company’s growth. At their core, private equity and venture capital may seem similar, however, the types of companies each type of funding typically invests in and how much they invest differ quite a bit.The firms involved in each type of funding are very different as well. It’s important to know the differences between them if you are a founder looking to take on new funding. At the simplest level, private equity is capital that is invested in a company or other type of private entity that is not publicly listed or traded. More detailed, private equity is a compilation of funds sourced from firms as well as high net-worth individuals. The purpose of these firms is to invest in private companies by buying large amounts of shares. Additionally, private equity can also mean buying the majority of a public company with the intention of taking it private and delisting it from the public stock exchange. The majority of the private equity world is dominated by large institutional investors. These large institutional investors typically include large private equity firms and pension funds. A pension fund is any plan, fund, or scheme which provides retirement income. These funds are typically larger and well equipped to be invested into private companies. How Does Private Equity Work? Private equity firms hold roughly $4 trillion assets annually. The breakdown of private equity investments comes from two major types of investors. The two types of private equity investors are: Institutional investors, primarily pension funds or major banks Large private equity firms The typical goal of private equity investments is to gain control of a company through a full buy-out or a majority investment in said company. With total control being the main focus and purpose of private equity investments, lots of capital is needed. Therefore, typically the funds involved in private equity need to be large and stable. Large private equity funds and institutional investors are made up of accredited investors. Most private equity funds have a minimum requirement. These minimum requirements set the minimum amount of money that an accredited investor must commit to the fund in order to be a part of the fund. These minimums are significant. A standard one might be $250,000 – $500,000. Private equity firms focus on two main functions. These functions are deal origination and management, and portfolio oversight. refers to managing overall deal flow. This is done by relationship management and deal management – creating, maintaining, and developing relationships with M&A (Merger and Acquisitions) intermediaries, investment banks, other transaction professionals in the space. This focus allows private equity firms to build a strong network for referrals and new opportunities to invest and purchase companies. In the robust M&A landscape, it is also common for private equity firms and institutional investors to employe folks specifically focused on prospecting companies where a future opportunity to buy or invest could occur. Portfolio oversight is the overall management of all active investments in the private equity firm’s workflow at any given time. Any active investments make up a portfolio. Managing that day in and day out consists of advising and directing revenue strategies, monitoring profitability, making hiring and executive decisions, and overall monitoring if the portfolio is balanced and profitable. The level of work in each investment will vary depending on how large and what stake of ownership the firm has. Financial management will be the main focus but IT procurement and operational tasks are typically part of that as well. Outside of traditional large cash, equity or debt investments, a common strategy for private equity firms is the leveraged buyout strategy or LBOs. An LBO is a complete buy-out where a company is bought out by a private-equity firm, and the purchase is financed through debt. The collateral for that debt is the company’s operations and assets. Examples of Private Equity Firms Holding trillions of dollars in capital, there are plenty of private equity firms out there. The top 10 globally are: The Blackstone Group Neuberger Berman Group LLC Apollo Global Management Inc. The Carlyle Group Inc. KKR & Co. Inc. Bain Capital LP CVC Capital Partners Warburg Pincus LLC Vista Equity Partners and EQT AB. Most of the largest firms have global offices spanning New York to San Francisco to Hong Kong to Paris and many other major hubs in between as well as across all populated continents. On the institutional investor side, JP Morgan Chase, Goldman Sachs, and Citigroup are all prominent players within the private equity space as well. Private Equity Backed Companies Private Equity firms can invest in a variety of different types of companies. A few examples of well-known companies that are backed by private equity firms include: Hostess Brands – the sweets company ADT Inc. – a leading provider of monitored security Qdoba – the fast food brand Infoblox – software security Marketo – sales and marketing software Powerschool – education technology LogicMonitor – SaaS performance monitoring What is Venture Capital? Venture capital is also a form of private funding. More specifically, venture capital is funding given to startups or other young and new businesses that have the potential to break out of their category and grow rapidly, finding success. Venture capital funding typically comes from wealthy individual investors, banks, or other financial institutions. Notably, a venture capital investment is typically financial but could also be an offer of technical or managerial experience. Venture capital is all about the risk and reward balance. Venture capital investors invest in companies that have not proven success yet but show major potential and the opportunity to make back higher than typical returns if the company delivers at the high potential the venture capitalists believe that it will. Related Resource: 12 Venture Capital Investors to Know Related Resource: Miami’s Venture Capital Scene: The 10 Best Firms Related Resource: 8 Most Active Venture Capital Firms in Europe Related Resource: Breaking Ground: Exploring the World of Venture Capital in France Related Resource: 7 Best Venture Capital Firms in Latin America Related Resource: Exploring the Growing Venture Capital Scene in Japan How Does Venture Capital Work? Venture capital in a nutshell is private equity but specifically for small startups and new companies with high-growth potential in the technology, biotechnology, and clean technology spaces. Venture capital is technically a form of private equity, however, it is a type of investing that is normally all equity and smaller investments than other private equity investments. The main differentiator is that venture capital is focused on high-risk, high-reward scenarios. There are three main types of venture capital financing: Early-stage – this is typically a small amount of funding, potentially in a seed round, that allows a startup to finish building a product or service offering, qualify for a loan, or in some cases kick-off early stage operations. Expansion – this type of venture funding is typically a higher capital amount that will allow a startup to scale rapidly. The type of funding might be seen at a Series A or larger. Acquisition – this type of funding may be purposed specifically for financing the buyout of another company or competitor in that startups space. It might also be used to develop a new type of product or launch a new line of business within their company. Just like private equity firms, venture capital firms offer capital for equity. Investors from venture capital firms often take board seats as part of their ownership / equity stake in a company. Venture capital firms typically raise set funds with teh intention of investing those funds over the course of a set period of time. The funds are typically made up of individual investments from limited partners, or wealthy individuals, banks, or other institutional investors. LPs invest their money in venture capital firm’s funds because they are looking for high-growth returns and trust the venture capital firms to make those investment decisions for them. Venture capital firms typically employ a staff dedicated to researching the potential investments that could be made. Because of the high-risk high-reward industries that VCs work with, due-diligence and detailed research is crucial to eliminate as much risk as possible before investing firm dollars in a startup. Examples of Venture Capital Firms With tech startups historically being founded in the Bay Area and other major metro hubs like New York City, a large portion of VCs are based on the coasts. A few well-known venture capital firms include: Bessemer Venture Partners Sequoia Capital Andreesen Horowitz GGV Capital Index Ventures Founders Fund and IVP Related resource: Understanding the Role of a Venture Partner in Startups Examples of VC backed companies Most high-growth, successful tech companies, especially SaaS companies, are venture backed. Well known venture-backed companies include: Pinterest – the visual bookmarking tool LinkedIn – world’s largest professional network Yelp – online directory for local restaurants, services, retail, reservations and recommendations Docusign – digital documents Hubspot – marketing and sales software Instagram – photo sharing social platform Private equity vs venture capital for startups The main difference between private equity and venture capital comes down to size and risk. What Private Equity Firms are Looking For (in startups) Private Equity firms typically are looking for large companies with a proven track record to buy. They are looking for mature businesses where the model is proven out. These large or more mature companies may be failing for one reason or another. Even if a company is not necessarily failing but instead has plateaued their growth, a private equity firm would look to buy the company and streamline operations to make it more capital efficient, cash positive, and profitable. Private equity firms mostly buy 100% ownership of the companies in which they invest. Typically then the companies are in total control of the firm after the private equity buyout. Private equity investments are also typically a minimum of $100M for one single company. There are no limits for the type of companies private equity companies can invest in. In addition to equity, private equity firms may structure investments with debt and cash. Related resource: Dry Powder: What is it, Types of Dry Powder, Impact it has in Trading What VC Firms are Looking For (in startups) Venture capital is typically invested in a new company with high potential. This could be a small startup or a larger scaling startup that has yet to reach profitability but is showing major upside and potential. Unlike private equity, venture capital firms typically invest less than 50% in any one company or investment. Due to the high-risk nature of the companies they are investing in, they typically like to spread the money in their funds across many different investments to increase their chance of success and high return. The investments from venture capital firms are typically less than $10M per investment. Venture capital firms are limited to startups in technology, biotechnology, and clean technology. Additionally, venture capital firms typically only invest with equity. For startups early on in their journey, venture capital is typically where they might seek investment. This is due to the early risk of their companies as well as the desire to maintain majority control in their companies management and direction as they build. Down the line, a startup may end up in the position where their only option is to give away the majority stake in their company to inject capital into the business to keep it afloat. Related Resource: Understanding the 9 Types of Private Equity Funds Related Resource: Accredited Investor vs Qualified Purchaser Critical differences between venture capital firms and private equity firms The difference between private equity and venture capital matters because the type of investor a company brings into their business can completely shape the outcome and ultimate goal of the company. Understanding your desire to IPO, get acquired, or stay private are critical to consider before seeking different types of funding. Ownership and advisory can make or break a successful company as well as change the type of value and long-term financial success of the founders or initial employees. Related Resource: How to Choose the Right Law Firm for Your Startup When to seek out Private Equity vs Venture Capital As a startup, it’s important to understand when to seek out private equity or venture capital backing throughout your company’s journey. Taking on the right type of investors (or not) at the right time is critical for long-term success. Startups in the tech space will most commonly seek out venture capital funding first. If a startup is in the tech space and is aiming to grow quickly and make it big or believes it has the potential in a large market to take a large market share, venture financing makes sense as it allows that company to scale quickly without giving up too much equity or majority stake. Companies in a position where they heed a large injection of cash, are not in the startup technology space, or are not high-risk, might make more sense to seek funding from a private equity firm. This type of investment may lead to a larger stake of control being put forward but with more stable and long-term financing options. Visible can help your startup report out important updates to your investors (private equity or venture capital!). Learn more here. Related Resource: Exploring the Top 10 Venture Capital Firms in New York City Related Resource: Chicago’s Best Venture Capital Firms: A List of the Top 10 Firm

What is organizational alignment? Generally speaking, a startup is a fast moving organization. The goal is to grow quickly and attack a market. If a startup has raised venture capital, this is particularly true. A startup is likely hiring and deploying capital at a quick clip. Staying aligned as a team as new faces continue to pop up in the office is a key to success. Mix in the state of remote work and organizational alignment is vital. Organizational alignment is a strategy where company employees and stakeholders are aligned to grow, achieve goals, and execute on company mission, vision, and values more effectively and quickly. Related Reading: How To Manage Remote Teams: 16 Tips From a Remote Startup Importance of organizational alignment As we alluded to earlier in the post, startups are fast moving organizations generally with a focused goal or vision. Being able to effectively communicate, make decisions, and grow is vital. Below are a few of the important aspects of organizational alignment. Business strategy When starting a business there is likely a set business strategy that executives and founding members believe will be the key to success. Organizational alignment will allow everyone involved, plus new hires, to stick to the strategy to efficiently grow. Decision-making Making quick decisions is important in the growth stage of a business. In order to best and most efficiently make it is important that everyone is aware of what is happening with the business. By having all stakeholders engaged the decision will come quicker with more conviction. Business performance At the end of the day a more aligned organization will lead to better business outcomes as a whole. Company/corporate culture One of the biggest benefits of organizational alignment is the ability to lift and solidify a company culture. Gone are the days of employees being attracted by ping pong tables, free lunch, and company happy hours. Top talent is attracted to an organization because of the work and the company culture. They are in search of transparency, ownership, and responsibility in the workplace. Organizational alignment is a great way to help employees feel as they are solving problems and helping the business grow. Employee Engagement Piggybacking off of the idea that organizational alignment will help promote a strong company culture it will also help employees engage. When employees are aware of what is going on and their feedback is welcome, they will be more engaged and more invested in the success of the company and their personal growth. How to build organizational alignment There are countless methods and approaches to create company alignment (more specific frameworks below) but we have found there are 3 areas to focus on that will help companies build organizational alignment. Individual Goals and Purpose Before you can start building alignment across the entire organization, individuals need to have a deep understanding of their own purpose and goals. If an employee is not feeling the ownership and importance of their role aligning them with the rest of the organization won’t give them the benefits organizational alignment can offer. One aspect of this is understanding the role and position they are filling but also on the leadership team to understand their desires to make sure they are filling the right position. As Jeff Boss put it in an article for Forbes, “Ask your people what motivates them, why they’re doing what they’re doing, where they see themselves in three years and what might happen if they don’t get there. Set the conditions for candor now to prevent the loss of talent later.” Team Goals and Purpose Once an employee has a clear understanding and their role you can begin to align the individuals in a team or business unit. Because everyone knows their position everyone should be able to come together and align themselves as a team. No one should be questioning who owns what or how they can contribute. Different teams likely have their own set of metrics and KPIs that they are responsible for. Every individual in a team should know how they can contribute to the growth or achievement of their team’s KPIs. Cross Team Alignment Now that individual teams are aligned and aware of their goals they can start aligning across an organization. Business units and teams can’t be siloed and expected to impact the business as best as possible. In order to best perform all teams need to be informed and aligned. Jeff Boss uses an example of sales and marketing teams: “It doesn’t matter how great your sales teams perform if your marketing teams fail to get the message out, and vice versa… What impedes alignment between teams, they say, are disparate systems, lack of transparency and visibility on goals, and skewed expectations—all of which fall under the umbrella of poor communication.” Organizational alignment starts with an individual knowing their role and position in the organization. From there a startup can set up a system and framework to best align their individuals and teams. Organizational alignment model/framework examples Below are a few of our favorite frameworks that have stood the test of time to help organizations stay aligned: McKinsey 7-s model Originally introduced in the 1970s the McKinsey 7-s model has certainly stood the test of time. As defined by the team at Corporate Finance Institute, “The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational design.” The goal of the model is to depict how effectiveness can be achieved in an organization through the interactions of seven key elements – Structure, Strategy, Skill, System, Shared Values, Style, and Staff.” The 7s are split into 2 groups — hard and soft: As defined by the team at Strategic Management Insight, “Strategy, structure and systems are hard elements that are much easier to identify and manage when compared to soft elements. On the other hand, soft areas, although harder to manage, are the foundation of the organization and are more likely to create the sustained competitive advantage.” We put quick definitions of each “s” below but you can learn more here. Strategy — The business plan and strategy behind the organization’s product, go-to-market, and growth. Structured — How the organization is structured and organized. Systems — The chain of command, communication, and decision making framework across the organization. Style — How individuals interact and work with each other. Can resemble company culture. Staff — The human resource and talent related to hiring, alignment, and recruiting. Skills — The specific skills of individuals and teams that allow a company to execute on a strategy. Shared Values — The mission, vision, and values of an organization. Image from the team at Mind Tools. The team at Mindtools explains how to execute on the 7-s model in 4 steps: Start with your shared values: are they consistent with your structure, strategy, and systems? If not, what needs to change? Then look at the hard elements. How well does each one support the others? Identify where changes need to be made. Next, look at the soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change? As you adjust and align the elements, you’ll need to use an iterative (and often time-consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it. V2MOM – Salesforce model One of our favorite alignment strategies at Visible is the V2MOM Model from Salesforce. As Marc Benioff, CEO of Salesforce, described it himself, “The vision helped us define what we wanted to do. The values established what was most important about that vision; it set the principles and beliefs that guided it (in priority). The methods illustrated how we would get the job done by outlining the actions and the steps that everyone needed to take. The obstacles identified the challenges, problems, and issues we would have to overcome to achieve our vision. Finally, the measures specified the actual result we aimed to achieve; often this was defined as a numerical outcome.” The components of the V2MOM can be found below: An example from Benioff and the team at Salesforce can be found below: Learn more about V2MOM and how you can use it at your organization in our blog post here. How to measure organizational alignment Organizational alignment can be quite subjective. Because of this there are a lack of quantitative metrics that you can use to measure organizational alignment. Yes, you can look at revenue, headcount, employee retention to make sure things are going in the right direction but there is a chance that employees still feel lost and are not aligned with other team members. However, this is not a bad thing. You can use a qualitative approach to measure your alignment. Managers can send surveys, poll employees, or just ask questions during a 1 on 1 to understand how well their organization is aligned. Organizational alignment tools Obviously organizational alignment is vital to a company’s success there are countless tools and tricks to help companies stay aligned. OKRs As defined by the team at What Matters, “The definition of “OKRs” is “Objectives and Key Results.” It is a collaborative goal-setting tool used by teams and individuals to set challenging, ambitious organizational goals with measurable results. OKRs are how you track progress, create alignment, and encourage engagement around measurable and clear goals.” An objective is the overarching goal that needs to be achieved. The key results are what need to be measured and accomplished along the way to complete the objective. OKRs are a great way to keep everyone on the team focused on the same goal (objective). Employee engagement There are also countless tools to help organizations measure employee engagement. One of our favorites is TinyPulse. TinyPulse allows teams to send out quick employee surveys to generate an employee engagement report. This can be used by managers to pinpoint what employees may be struggling to feel aligned with the organization as a whole. Team Updates At Visible, we recommend using team updates to create an aligned organization. We see quite a few customers send out a weekly team update to help keep their team headed in the same direction. A quick example might look like this: A weekly update sent on Mondays recapping key metrics, wins and losses from the previous week, employee shout outs, and any interesting finds from the previous week. Give your team the transparency and communication they deserve with a quick update. Send your first team update now. Related resource: Why the Chief of Staff is Important for a Startup

Everyone, especially startup leaders and founders, are constantly looking for “hacks” to be more productive. A quick Google Search suggests “to-do lists, management tools, OKRs, etc.” But what if we told you one of the easiest ways to increase productivity is right in front of you? We recently had the opportunity to interview Jeff Kahn, CEO and Founder of Rise Science, on the Founders Forward Podcast. Rise is the only app that unlocks the real-world benefits of better sleep. Being a sleep expert and a startup founder himself, there is no doubt that Jeff spends time pondering how to be more productive. While Jeff offered countless tidbits of knowledge to better your sleep and health, 2 things stuck with us when it came to productivity. Scheduling Around Your Circadian Rhythm As defined by SleepFoundation.org, “Circadian rhythms are 24-hour cycles that are part of the body’s internal clock, running in the background to carry out essential functions and processes.” As Jeff explains it, “You actually have a part in the brain that’s controlling all the cells in your body and organ systems, basically when to be active and alert and when not to be. And as a result of that sort of on and off activity and recovery state we actually have these different times when we should be performing at different times when we’re just not as performance.” So what does this have to do with productivity? There are natural times when you are more productive and alert than other times. This means that you could be most productive at 9am and have a “dip” in the afternoon when you are less productive. Jeff encourages leaders (and everyone) to schedule their days around this biological phenomenon. “What this means is you need to be tuned into when you’re going to be at your peak performance and when you’re not, and then be able to plan your day accordingly.” As Jeff and Mike Preuss, our CEO, explain, they use their circadian rhythms and “dips and peaks” to schedule their day. For example, Mike has a peak (AKA is most productive) in the morning so tries to block this time in his day to do more strategic thinking and planning. Whereas when he is in a “dip” he may schedule demos and do other tasks he does not need to be 100% as his best performance for. This isn’t the first time someone has brought this up on the Founders Forward Podcast. Amanda Goetz, Founder of House of Wise, actually tracks her sleeping patterns and circadian rhythms to schedule her day as well. How do I track Circadian Rhythm? There are different applications and rituals that people will suggest to track circadian rhythms but we actually use Rise ourselves at Visible. They have what they call an “energy schedule” that is based on your sleep schedule so you can see your natural peaks and dips throughout the day. For example, here is my energy schedule from the app: There is actually a second “peak” not shown in the screenshot (which I was in as I wrote this) when I tend to get my best writing done. So what is Jeff’s other tip to productivity? Categorizing the Day Throughout the course of a week, a founder is pulled in every direction. Maybe it is fundraising, or customer calls, or HR, or finances, etc. In order to stay fully prioritized Jeff “categorizes” his day. This means that Jeff buckets his different activities/calendar events throughout the day into different categories. “I basically organize my day into sort of categories. Let’s say I’m working on a fundraise or I’m working on something on B2B or product or consumer or HR or whatever it happens to be, I sort of have these different categories. And every time I start a new task I track that and track the category. And what I found, there’s sort of two useful learnings.“ The first useful learning is that tracking his task allows Jeff to look back on a week and understand if he focused his time in the right place. Going into a week Jeff will have one (or a few) overarching things he would like to focus on. If he looks back at the week and sees that his time spent on the focus area was low, he knows he needs to change something in his scheduling. The second learning is that categorizing his task allows him to fully understand how time he spent on “focused work.” Over time Jeff has determined his optimal amount of time he should be working over the course of a week. How do I categorize my day? Jeff uses a tool called Toggl. It allows you to prioritize and categorize your day. Jeff has set up a Zapier Zap between Toggl where he sends his status to Slack so his team can see what he is working on. If you’re interested in learning more about sleep, productivity, and founder life check out the rest of the podcast with Jeff.

Startups are in a constant competition for 2 resources — capital and talent. In the early days of building a business, hiring is crucial to the trajectory of your business. Some people may tell you to hire a product team first, or customer success, or marketing team members. There is a blog post or Tweet making the case for different early stage hiring decisions. What about executives at the early stage? Generally speaking, we think of executives at the early stage as a founder type person that is deeply ingrained in the company DNA. But does it have to be this way? What about a part-time executive to help you get the business to the next level. We had the chance to interview Amanda Goetz, the part-time CMO at Teal and part-time founder of House of Wise, on the Founders Forward Podcast. As Amanda is living the “part-time executive” life herself, she offered lots of great advice and reasoning for founders that may be evaluating a part-time executive. As Dave Fano, the CEO of TealHQ, wrote: “Today I couldn’t be more excited to welcome Amanda as our half-time CMO at Teal. Beyond getting an exceptional executive, we are excited to show that the traditional models of employment need to change. It does not have to be all or nothing, a person can be a committed and meaningful contributor to a company while also pursuing entrepreneurial effort. We are thrilled to learn from Amanda and support her in every way we can in building House of Wise. As a team we’ve already learned so much from watching how she’s navigated building her brand, being an entrepreneur & team leader.” Consultant vs. Part-time Executive Earlier in her career Amanda led a masterclass for Teal and fell in love with their community. At the same time she knew that she was going to be parting ways with The Knot and was debating taking the leap as a full-time founder (with House of Wise). Amanda approached the CEO of Teal about her love for building brands and that she would love to get Teal to their Series A and help hire her backfill. While most people may think, “oh, just hire a consultant.” Amanda made the case she should be a part-time executive. As she put it herself, “There’s something about being in the trenches and caring so much about not only the product, but the team that’s working day in and day out.. And you can’t get that as a consultant. And I think especially for seed stage companies, you have to be in the research. You have to be in that agile moment of are we this? Are we this? Let’s like pressure test this. I love the zero to one.” This allowed Amanda to be invested in the team and culture at Teal over a consultant who may be viewing things from the outside. Be Clear From the Start When approaching a part-time executive you have to be extremely clear about what you are looking for. As Amanda put it, “If you need somebody to be managing social everyday, writing content, hitting your SEO content goals, that is not a part-time executive.” You need to be transparent during the hiring process and let them see under the hood of the business so they know where they can help to get the business to the next level. Which brings us to the next point. A part-time executive is someone that should challenge you: A Sparring Partner At the seed and early stage, an executive is someone that can set you up for success in the future. They will be there to test strategy, acquisition models, etc. and ultimately help you set up your organization and structure so you are ready to go in the future. As Amanda put it, “What you’re getting from a seasoned executive is someone to spar with, to have those really meaty strategy conversations with to challenge you.” If done correctly, a part-time executive can be an incredibly valuable position early in your company’s lifecycle. While it may not be a great fit for every business there are certainly businesses and individuals that can make it work. To learn more about Amanda Goetz and her journey from the wedding world to the CBD and part-time executive world, give her episode a listen here.

Over the last 5 years at Visible we have heavily invested in creating a blog and curating resources in our weekly newsletter to help give founders an edge. We’ve decided that it is time to test a new medium at Visible so we launched the Founders Forward Podcast (learn more about the actual podcast here). About Lindsay Podcasting is a medium we know can work so decided it was time to take the leap. Naturally, we thought there would be no better first guest than Lindsay Tjempkema, CEO and Founder of Casted. Casted is the first and only podcasting platform built for B2B companies. Our CEO, Mike Preuss, had the opportunity to sit down with Lindsay to chat all things podcasting. Lindsay offered countless tips and advice for founders and marketing leaders looking to start a podcast at their company. Give the episode a listen (below or on any podcast player) or check out our favorite takeaways: Who is it for? Why are you doing it? Before making the leap to start a podcast you need to understand (1) who is it for? And (2) why are you doing it? If you can answer those two questions, you’ll be able to find better guest, create better content, and overall have more success. As Lindsay put it, “It’s just like any other form of content or any other approach to anything marketing related. Who is it for? Who’s my audience? What are they interested in? What do they want to know? What are the goals that you have for the show? What are you trying to achieve? Are you trying to build relationships? Are you trying to help people dive deeper? What’s your why? Because without those two pieces of information you’re going to try to appeal to everyone. Which when you try to please everyone, you end up mildly even entertaining at best anyone.” In turn, the more dialed you have your who and why, the easier it is to measure. If you don’t know why you are doing something, it is almost impossible to measure. If you have a solid understanding of your audience and what your goals are, the leap into podcasting will be much less intimidating. Fuels Other Content A podcast can be a great source to inform your content roadmap and other content decisions. If you focus on having a great conversation with someone your audience wants to hear from, let the rest of the content flow from that. In turn, one conversation can make your content and marketing teams more efficient as they repurpose and reuse the original podcast. https://website-staging.visible.vc/wp-content/uploads/2020/12/Lindsay-—-wring-out-podcast.mp4 As Lindsay went on to explain, “What areas could I dive into to create some supplemental written blog content? Is there a white paper here? Is there a way to equip my sales team to give them the insights and the perspectives and the quotes and the quips that I captured in this interview? Really think about what else you can do with that show because then you’ll be reaching people across other channels and giving them the opportunity to dig in across different formats to really engage in what you’re saying.” Putting the energy and time into distributing your podcast is key to success. If executed properly, it can actually allow you to produce more content with less work. Find the Right Guest Going into the Founders Forward podcast, we were advised to “aim high” for our first set of guests. This would allow us to feature a big name and have an anchor for future guests. While Lindsay says this is certainly true, you also want to make sure you are having on the right “experts” for your field. As Lindsay explains, “if your audience needs to hear about what it’s like to be new to the career force and just graduated from school, they’re going to want to listen to people who just finished their first two or three years of school. Which many of us would not think of as experts by the definition of famous people.” No matter the field or guest type it all comes down to knowing who it’s for and why you’re doing it. By being able to answer these questions, you’ll be able to make sure you have the right guest for your audience. Think in Seasons One of the first questions someone may have when exploring a podcast for their company is, “how long should I give it?” How do you determine when you’ve had success? Is there a magic episode # where you should know or pivot by? Lindsay likes to advise companies to think in seasons, not episodes. By thinking in seasons and allowing a set of episodes to be recorded and distributed you’ll be able to hear from your audience and make necessary adjustments and test new ideas. Regardless of how small the audience, you will have people listen in the first season. And you’ll make an impact on their lives in some way. Listen to these core listeners. Give yourself seasons so you can take a pause, get feedback from your listeners, and make the necessary tweaks. Creating an Internal Podcast One of the unexpected tidbits we got out of Lindsay was how she and the team at Casted use podcasts internally. The first way is for their board meetings (which we wrote more about here). In short, Lindsay and the founding team records a quick snippet on the state of the business and sends it over to the board in advance of the meeting. Board members are busy and this allows them to ingest the necessary information before the meeting in an easy way. The second way is their product notes podcast. After every product push, the product team leader records a quick podcast explaining the changes and why they made them. This allows for the entire company to be aligned around a new feature. When sales and marketing reps are hearing the decision making directly from the leader, they can better message and relay the product launch to customers. All in all, podcasting can be an incredibly valuable tool for your startup and marketing efforts. To start, make sure you can define who your podcast is for and why you are doing it. From here, the options are endless for where you content can go. We thank Lindsay for taking the time to chat with us. To learn more from other founders, leaders, and investors, check out the Founders Forward Podcast here.

Building a company is difficult. Being a founder can almost feel impossible. As Naval Ravikant, Founder of AngelList, wrote, “It’s never been easier to start a company. It’s never been harder to build one.” Being a founder can be an incredibly lonely journey. There are very few people that truly know what it takes to build a company while being a strong leader. The best way to learn is from someone who has been there before. Being a founder can oftentimes be an “asymmetric experience.” As Seth Godin, business author, puts it: “In these asymmetric situations, it’s unlikely that you’re going to outsmart the experienced folks who have seen it all before. It’s unlikely that you’ll outlast them either. When you have to walk into one of these events, it pays to hire a local guide. Someone who knows as much as the other folks do, but who works for you instead.” We are excited to launch the Founders Forward Podcast to do just that — enable founders to learn from their peers and leaders that have been there before. Every week our Founder, Mike Preuss, will interview a founder or startup leader that has a specific area of genius. We will cover everything from sleep and wellness to alternative forms of financing. Why a podcast? Our mission at Visible is to give startups a better chance to succeed. As we and our brand continue to evolve, so will our content. We want to give founders the absolute best resources they need to move forward. We will launch a new episode of the Founders Forward Podcast (paying homage to our original newsletter name) for the next 6 weeks. We will use this to elevate our other content and give founders digestible takeaways. You can check out our first 3 episodes below (or listen on any podcast player): Episode #1 — Lindsay Tjepkema, CEO and Founder of Casted Episode #2 — Amanda Goetz, CEO and Founder of House of Wise Episode #3 — Jeff Kahn, CEO and Founder of Rise Science How can you help? This is our first season and foray into podcasting so any feedback is very much welcome! If you have any suggestions, questions, or would like to recommend a guest, send us a message to foundersforward at visible dot vc. To stay up-to-date with the Founders Forward Podcast subscribe to the Visible Weekly Newsletter below:

On episode 3 of the Founders Forward Podcast we welcome Jeff Kahn, the CEO and Founder of Rise Science. Rise is the only app that unlocks the real-world benefits of better sleep. Jeff has 10 years of sleep science experience and research. Before starting Rise Science Jeff spent time publishing academic articles and supporting world class athletes and teams with better sleep. There is no doubt about it that Jeff knows about sleep. About Jeff Being a founder is difficult. Mix in 2020 as a whole and the stress and anxiety of being a founder can be overbearing. Jeff shared his story of going from sleep science student to founding a sleep app. He discusses how sleep can be an easy way to improve your overall well being (and leaves us with plenty of sleep takeaways). The conversation does not stop there — Jeff also has plenty of tidbits about his life of a founder and how he leads and stays productive. Mike Preuss, CEO of Visible, had the opportunity to sit down and chat with Jeff. You can give the full episode a listen below (or in any of your favorite podcast apps). What You Can Expect to Learn From Jeff The 100 year history of sleep science (in 5 minutes) Simple takeaways to improve your sleep How sleep impacts your leadership skills How you can leverage circadian rhythms to do better work How managing sleep (and sleep debt) can improve your overall well being How Jeff categories his day to be most efficient How iteration and measurement improved a key activation metric 10x for Rise Related Resources Rise Science — Check out and download the application. Toggl — Application that Jeff uses to categorize and prioritize his day. Traction — Book from the founder of DuckDuckGo mentioned by Jeff. How Superhuman Built an Engine to Find Product/Market Fit — Rahul Vohra, Founder of Superhuman, explains how they found product market fit. We created the Founders Forward Podcast to learn from people like Jeff. For founders looking to improve their overall health and leadership skills, Jeff has you covered. As you scale your business, having the right guides at your side can make all of the difference. Each episode we’ll talk to fellow founders, investors and experts. We’ll dive into their zone of genius as well as hear about their past mistakes to give you a better chance of success. To stay up-to-date with the Founders Forward Podcast subscribe to the Visible Weekly Newsletter below:

On episode 2 of the Founders Forward Podcast we are joined by Amanda Goetz, CMO of Teal and Founder at House of Wise. Before taking the leap into her second time as a founder, Amanda was the VP of Marketing at The Knot. With her experience in branding and recent jump to starting House of Wise we couldn’t think of a better guest to chat about all things branding and founder life. About Amanda House of Wise is empowering women to take control of their sleep, sex, stress, and wealth with luxury CBD products made with real women in mind. Give Amanda a follow on Twitter to stay up to date on the House of Wise. If you’re interested in learning more about CBD and wellness, be sure to give the episode below a listen. Amanda shared her story from founder to operator back to founder, how startups can leverage part time executives, how to build a brand, and how she deals with the stress of being a founder and part-time executive, and much more. Mike Preuss, CEO of Visible, had the opportunity to sit down and chat with Amanda. You can give the full episode a listen below (or in any of your favorite podcast apps). What You Can Expect to Learn From Amanda How she went from founder to operator to part time founder/executive. How startup founders can leverage a part time executive How she structures her day and stays productive The importance of knowing your body and rhythms to be a better leader and executive How she has stayed sane with the pressures of being a founder How she raised capital for House of Wise Related Resources Amanda’s Twitter House of Wise TealHQ We created the Founders Forward Podcast to learn from people like Amanda. For founders that are taking the dive or seasoned founders alike, Amanda has plenty of powerful takeaways. As you scale your business, having the right guides at your side can make all of the difference. Each episode we’ll talk to fellow founders, investors and experts. We’ll dive into their zone of genius as well as hear about their past mistakes to give you a better chance of success. To stay up-to-date with the Founders Forward Podcast subscribe to the Visible Weekly Newsletter below:

On episode 1 of the Founders Forward podcast, we are joined by Lindsay Tjepkema, Founder and CEO of Casted. Casted is the first and only podcasting platform built for B2B companies. Being our very first episode of the Founders Forward we could not think of a better guest than Lindsay. If there is one thing we know about Lindsay — it is that she knows podcasting. About Lindsay Lindsay shared all sorts of interesting tidbits for founders and startups looking to explore podcast and new media types. We had the chance to dive into her life as a founder as well — we chat board meetings, fundraising, leadership, and more. Mike Preuss, CEO of Visible, had the pleasure of interviewing Lindsay for our very first episode. The full episode is below (and transcript further down). You can also listen on any of your favorite podcast apps. What You Can Expect to Learn from Lindsay Why invest in a podcast at your company? How to measure podcast success, find the right guest, and create great content. Leverage podcasting for board meetings and product launches. How Lindsay approached fundraising and why she actually liked it. How to set boundaries and balance with work. The importance of conversation and connection. Some related content Lindsay’s Twitter Casted We created the Founders Forward Podcast to learn from people like Lindsay. For the founders out there debating a podcast (or alternative media type), Lindsay is a great guide to lean on and listen to. As you scale your business, having the right guides at your side can make all of the difference. Each episode we’ll talk to fellow founders, investors and experts. We’ll dive into their zone of genius as well as hear about their past mistakes to give you a better chance of success. Podcast Transcript Learn more about our favorite podcasting tips here, or give the full episode a read below. Mike: Welcome everyone to season one, episode one of the Founders Forward podcast. Today I’m joined by the founder and CEO of Casted, Lindsay Tjepkema. And I thought this was just super fitting because this is our foray into podcasting, and we need someone to guide us through the treacherous waters. Maybe not treacherous, but the world of podcasts. And this is what Lindsay and Casted do for a living. Lindsay, you probably do a better job of explaining Casted than I can. I’m gonna turn it over you, but essentially, from what I understand, you are like the only branded podcast experience there is on the web right now. Lindsay: Yeah. Thank you so much for having me. It is such an honor to be your first guest. Basically, you’re right. I mean, what I do for a living is podcasts about podcasts. So I am here for it. Casted in a nutshell, you got it just about right. We are the first and right now the only podcast solution around B2B podcasting. It’s a content marketing platform that enables content marketing teams for B2B brands to use their podcasts, to really fuel their sales and marketing strategies as a whole. Mike: I love it. When did you start this business? When did you start Casted? Lindsay: My day one was April 29th, 2019. So as we record this, we’re, you know, about a year and a half into it. Why invest in a podcast? Mike: I love it. And so podcasting has clearly exploded. It feels like there’s a podcast for just about every single topic. Visible, we’re a team of 10, we’re small, I’m the founder of the company. We’ve known each other for a couple of years now, but you mentioned like everyone should have our podcasts. Like why should I care and have a podcast for Visible what’s your take on it? Lindsay: Right. Well, I have a couple of answers on that. Podcasts do something that no other form of content can, you know, everyone that’s listening to this podcast right now, your very first episode, is connecting with you and with me and with both of our brands in a way that all of the other great content that we’re producing just. I told you this, I think first time we met, I love the content that you guys put out there because as a founder of a company, I’m looking for that information that you’re providing about how to work with my board and when to be thinking about different stages of the process and how to be approaching new things that I as a founder haven’t run into before. So you all are creating really, really exceptional content. But, this content that your audience is consuming right now helps them to connect and build a relationship and trust. And really that human to human level that no other content does. So to me, that should be the basis of every single content strategy is how can we capture the insights of experts in whatever topic or area of interest that we have? Capture their insights, capture their unique perspectives and use that as a show to create real human level connections with our audience and then spin more content out from that across other channels. Finding Podcast Listeners Mike: That was an amazing answer. And so one of the things that I’m trying to wrap my head around though as a founder is back in 2010, it was all about content, content, content, and particularly blogs building my SEO strategy. To me, this kind of feels the same, right? Everyone knows it’s a strategy or playbook you should probably be running but there’s a ton of options out there. How, how do I get people to listen to the founders forward? I can create it but it doesn’t mean they will come. So how do I get people to listen to this podcast? Lindsay: Right. Well, I mean, it’s just like any other form of content or any other approach to anything marketing related is I always say first, think about who’s it for. Who’s my audience? Who are they? What are they interested in? What do they want to know? And then why am I doing it? Who’s it for and why am I doing it? What are the goals that you have for the show? What are you trying to achieve? Are you trying to build relationships? Are you trying to help people dive deeper? What’s your why? Because without those two pieces of information, you’re going to one, try to appeal to everyone, which when you try to please everyone you end up mildly entertaining at best. Then if you don’t know why you’re doing it, it’s really hard to measure success. So, then to answer your specific question around, like how do I get people to listen, if you can really hone in on who’s it for that’s when you can provide those unique insights and dig deep. With the guests that you have in your show in areas that your audience would probably want to ask them questions on too, you can ask different questions than other podcasts or other content providers would not get into and really get into unique, original content that will be all the more engaging for your audience. So that’s how you create the good content. But then what you do with it from there is what, one of the reasons that Casted exists. It’s something that I see so often is people leaving behind, so much value because they publish their show and then they go on to the next thing, which yes, sometimes it’s the next episode, but then quite often as the 8 billion other things on your to-do list, which as founders we know is there’s a lot. But if you’re going to put the effort into capturing an interview. Definitely, definitely take another beat and take the time to bring it out. So publish the show and then think, okay, what’s the related content I could pull from this? What are the clips that I could pull to share on social media? What areas could I dive into to create some supplemental written blog content? is there a white paper here? Is there a way to equip my sales team? Give them the insights and the perspectives and the quotes and the quips that I captured in this interview. Because then you’ll be reaching people across other channels and giving them the opportunity to dig in across different formats to really engage in what you’re saying. Defining Podcast Success Mike: Yeah, that makes so much sense. So knowing that let’s say we have this beautiful, why, which I think we do. We know it’s founders, right? And we want to get close to founders and starting a startup is hard and it’s a journey and so we want to find experts to help our community of founders with a problem they’re facing. I think we have a way to measure that and we plan on investing in this podcast, right? We’ve found someone to do some editing for us. We have an awesome intro song ready to go. We have eight people lined up for the first season. How long should we give it? Is there a way we know like we should pivot this? Or maybe this isn’t the right strategy for us? Is there a timeframe? Is it a gut feeling? Is it a metric? Lindsay: Yeah, definitely give it time. Quite often we see in the space in general, across all of marketing, all of podcasting, people will, we’ll give it a few episodes and then say, “Oh, you know, it’s not where I want it to be,” whatever that means, and give up and kind of throw in the towel and say, “well, that didn’t work.” Give it a couple of seasons. Really watch it. See what kind of feedback you get. And keyword there being seasons. I do really like to advise people to look at it one season at a time, not necessarily one show at a time. Start with your first season. You said you have like eight, let’s go with that. So do the first eight, take a minute, take a pause and then come back in and dive into another topic that’s within, you know, this Founder’s Forward area of interest. Or find a different subset of guests that you could have on or toy with the length or format of the show and do little minor tweaks based on the kind of feedback that you get. That will help with success. You will impact the lives in some way of some group that’s listening. And so listen to what they have to say. And if you give yourself chunks to do one season at a time that gives yourself the opportunity to take a pause to maybe not quite pivot but to make those changes without it feeling really jarring to your audience, right? You can make those little changes and they’ll grow to expect those tweaks along the way. Measuring Podcast Success Mike: Okay. And how do you guys measure your success? Is it top of the funnel for you or is it bottom? How is Casted measuring the success of Casted? Lindsay: Good question. Actually in a lot of ways. And I think that’s, something that anyone that gets into podcasting should also think about. There is no one metric it’s certainly not, you know, some magical number of downloads. If that was the case, then we would all be trying to achieve that number and then be like, “Oh, there we go.” Success is going to fuel revenue. Now, it’s a little different for everybody, but that’s why, again, while you have to know who’s it for and why are you doing it so that you can look at all the indicators that contribute to, “am I getting to my why?” So for us, we look at overall listenership. Is a show growing? Do we have new listeners coming all the time? And do we have returning listeners? Did they listen before? And do they keep coming back? Are they listening to the whole show or most of it? We also pull clips from the shows, like how successful are those clips? Or the things that we’re sharing on social media, leading to people to come and listen to the show, and then engagement? That’s all show level and that’s fine and good, but you know, if I’m a marketer, that’s not enough. Like what else? Right. Are people going through? And from my episode page, are they engaging in the other content that we have? Are they going on and reading the related blog posts? Are they clicking into the information that we’ve shared along with that episode? Because that indicates engagement and that really indicates somebody who’s really interested in learning more about who we are, what we do, what we’re sharing as far as our content is concerned. We also have different integrations. We have a Drift bot that allows us to actually engage with our listeners while they’re listening. As long as they’re on our show page, we can recommend other related content, see if there’s any questions that we can answer. So it’s that kind of real-time engagement that helps us to understand how we’re doing. And then also through our integration with HubSpot. Just beyond like metrics and how many, but actually who? Did Mike come and listen to our show? Yes, he did. He listened to 97% of the show. And then, you know what somebody else from Visible listened too, even just like any other activity that you can see in your CRM really helps to fuel. One, are we successful? Two, what can we do now? Think about the big picture Mike: That’s why I love what Casted is doing and why we’re starting the Founders Forward podcast. It feels like it kind of lifts and elevates everything we’re doing across all of our different experiences on our site. From a concept we’re writing to how we engage with people that are on a trial. It feels like for me, downloads is really not a metric. I care about it’s going to be like, how do we create really unique and differentiating nuggets of wisdom from people that we can use from the podcast and in different parts of our marketing site. Am I thinking about that the right way? Lindsay: I was literally going to say, “you’re thinking about that exactly the right way.” Because there is no one size fits all downloads are one indicator and if that’s all you have, cool. Are they going up? But when you have the opportunity to look at the bigger picture, and especially those of us who are founders, you have the opportunity to lead from the top. Even if the top is just a couple of people to say, “We’re going to look at this show as a big picture thing. We’re not going to look at any one metric and decide whether it’s succeeding or failing. We’re going to say, okay, what kind of anecdotal feedback are we getting? When we do talk to someone and they say, Oh yeah, I listened to your podcast.” What does that conversation turn into? Are they a little bit more engaged with, is there a little bit more trust there? That’s an indicator of success. And then also, what else are we doing? Are we more effective and efficient as a team? Because we have this starter content that we’re pulling more out of and we’re able to do more with less, which again, as a founder is something that we’re looking to do all the time. So, yeah. It’s you gotta think big picture, you got to think, from these conversations, think about it less as I’m recording a podcast episode and more as I’m recording a conversation that I’m going to make a podcast out of it, but I’m also going to do a lot of other things too. Distributing Your Podcast Mike: Yeah, for me, it’s like a forcing function for me not to be lazy. It’s like, okay, I have an hour with Lindsay today. We’re going to record this. And then there’s a ton of other things that are going to happen, because of that forcing function of us having an hour to sit down and chat with one another. Lindsay: Okay. Mike: Okay. And last thing, as it relates to our journey, as we launch this podcast is there like one thing or gotcha that you think we’re going to run into? Lindsay: Yeah, I hate to sound like a broken record but kind of what we just talked about. I think a lot of people think all I need to do is just, you know, hit record and that’s my show. Well, it’s not that simple. it’s also not that hard, right? So you just, you find great people that your audience wants to hear from. You interview them it turned into a show, but it is a lot of work, there’s time involved. There is a lot of effort, which is kind of what we just talked about. All the more reason to make sure you’re getting a lot of value out of every single interview you do. How are you making sure you’re just wringing it out and that you are not just for a moment but ongoing, constantly coming back and saying, “what else can I do with this show? What else can I do with this interview?” I think that’s honestly, the biggest thing is looking for immediate success with minimal effort. And I also don’t want to make it seem like it’s really hard because if you do look at it holistically, like everything we were just talking about, what else can you get out of every show? Every time I record a podcast it’s on top of my blog on top of my social media strategy. On top of all these other things, it doesn’t have to be that way. It’s what if you just think about your podcast first and all of those other things that are on your to-do list flow from it. So it’s going back to the exact question you asked is what is a mistake that we see quite often. I think the flip side of that is where do we see the greatest success it’s with the companies that think about their podcast and in those interviews first as fuel for everything else and how they can, as a result, be more efficient, be more effective, be a little bit more lazy and saying, okay, everything’s going to feel out of this one resource of content, which is going to make everyone’s lives easier. Finding Your Guests Mike: Okay. Now you mentioned something in there that does not in the outline I sent you and put you on the spot. so you mentioned great guests. Is there any truth to like the guests list, like, should I shoot high? Should I try to get Mark Zuckerberg on the podcast because that kind of anchors my future guest list versus, having my brother, Matt, who’s in the background right now as our production Lindsay: He’s like what kids? What’s wrong with me? Mike: I could do that cause he’s my brother. Let’s talk about guests. Is there any truth to that? How do you recommend, I think about the guest list for the podcast? I’m sure some of it’s the why and why we’re doing it, but is there truth to like trying to aim high and get like a list type person right away? Lindsay: Absolutely. Which is why I’m here. I’m just kidding. I would say yes, but also no. So yes, in that when you have, you know, you said Mark Zuckerberg find if you got him, if you got Oprah to come on your show, would that spike your listenership? Of course, because it’s a big name. If you can get Oprah on your show and get her to Tweet, like, Hey, just did a great recording with Mike and Visible, check out their new show. What would you have a spike in listenership? Sure. But what if your audience doesn’t want to listen to Oprah? Right. I always say go find a great expert, capture their perspective. So on and so forth expert does not necessarily mean famous influencer in this space. It could, sure. I was actually just talking to someone yesterday, who was just asking for podcast advice and stuff and not a great fit for Casted, but has had the most ridiculously amazing people on their show because that’s what makes sense for them. Find the experts for your audience But that’s not what expert always means. If your audience needs to hear about what it’s like to be new to the career force and just graduated from school and what it’s like to be a newcomer to the career world. They’re going to want to listen to people who just finished their first two or three years of school, which, you know, many of us would not think of as experts by the definition of famous people. So again, it’s all about who is your audience and what are, who are the experts you’d want to hear from? They could be interns, they could be engineers, they could be product leaders, or CMOs, or your customers. Your customers are really great guests, your partners. It comes in all shapes and sizes, which again is why it’s so, so, so important to know who it’s for and why you’re doing it. Because if Oprah did come along to a show where she was not going to be a great fit, you’d have to say no, probably say, how else can we use Oprah because she’s amazing. Maybe we spin up another show, but yeah. You know what I mean? The other danger of having just quote unquote, the expected experts is that you’re going to get the same exact interview that everyone else has done with the name your person and it really is a mix because yes, it could be the big names because they’re big names for a reason. People like to hear from them. But don’t discount the people that haven’t really been heard from before, because they have really, really exceptional insights to your audience too. Starting an Internal Podcast Mike: Great to know. And so we’re going to shift gears just a little bit. So I got wind that you had a board meeting this week so one, How did it go? Then it sounds like you also use Casted or create a podcast for your board. How does that work? Podcast for Board Meetings Lindsay: Yeah. Board meeting went great, thanks for asking. Part of why it went so well is that we do use Casted for ourselves for an internal podcast. And I say that facetiously, but also truthfully, one thing that we do is, you have founders listening, so I’m sure that they can relate. When you have your board you send pre reads ahead of your meeting, right? So you send your agenda and all the things you’re going to vote on and things you’re going to talk about and things that, you know, all of the data that you want them to ingest before you spend a couple hours with them. So we were no exception. I put that together as well. But then along with that, I send a podcast that is myself and anyone else is going to be in the meeting. This time around, it was myself, my two co-founders and our marketing director, talking through, “Hey board, this is what we’re going to go through.” Q3 was really great for all these reasons. Pass it on over to the revenue update. Here’s what we’re going to go through. And here’s some of the highs and lows from revenue this month. And it’s nice because our board gets to hear literally from us, our voices talking about how things are going and what to expect. And then the feedback I’ve gotten has been this is really great because literally I’m gonna drop the name of Scott Dorsey, he is on my board. He’s fantastic. He’s like I was preparing for the meeting and he was like, “I got up and walked around and could have your voice in my ears while I was making my lunch.” It gives them more flexibility. All of our board members are really busy but we want them to engage in what we’re providing them. Mike: Do you go off the cuff or is there a script you’re sticking to you when you’re doing that board reading? Lindsay: For those, we all script it out because it’s pretty specific to the information that we want to share in that. In each of our one little clips it ends up being like a 15 minute episode when you put all of our different voices together. I think otherwise, as you can tell I’m a little bit long-winded I think it would very quickly turn into a 40 minute episode. Mike: I love that idea, especially since board members are busy. So if they’re traveling or walking around and they can pop you in and listen it’s almost like an earnings call for a startup really in a way, where like it’s you or your executive team talking to the board. Podcasts for Team and Customers So that’s cool. And then do you use it internally as well for team communication? Not just your investors and your board, but are you doing like an internal podcast for the team? Lindsay: Well, we do. It’s actually not me though. At least not yet. When we get bigger it might be. One of my co-founders, Adam Padrino, who heads up the product side of the business. Every time we have a release he does a release notes podcast. And if I’m not mistaken, I think that started out as like an internal podcast that we actually ended up changing to be for our customers and more public facing as well. But that started out to be like, Hey, this is the release. This is what’s happening. The related resources were a little video clips about what it looked like and how it worked. And the show notes were more information about the release and it was him literally talking through what the release is and how it changes things and where it fits in. Mike: So cool. That’d be like, if you wrote an investor update for every single one of our customers every time we changed the product. But yeah, I love that. That’s cool. Lindsay: Well, and if you go back to just to tie it all together it sounds funny, but it’s true — it’s a way to be a little bit more lazy. Or you could say more effective or more efficient is that if Adam, our head of product goes through and talks about why we built this, how it works, what it is, the rest of our team can then speak more eloquently about it can pull content you can write about, it can create the webpage update about it, it enables everyone else to do their job so much easier because they already heard straight from the product leaders from the founder’s mouth. Our Founders Forward Questions Mike: I love it. Okay. This is the part of the episode where we shift gears and focus you, Lindsay, the founder. I know you had a marketing agency. Is this your first startup though? Where you’ve raised money? Lindsay: Yeah. I did my own thing. I consulted on my own for awhile but this is my first foray into founder life. Mike: Do you find board meetings? Stressful? I always stress myself out before the board meeting. Lindsay: You know,I’ve only had a few. Stressful? There’s good stress and there’s bad stress. So I think it’s definitely a forcing function to get everything together, which I think is good. I don’t get nervous, stressful. Like I actually really, really love that time with my board because they’re your biggest cheerleaders and also your biggest challenges to make sure that they’re cheering for you, which is why sometimes the redirection or identification of blind spots is hard to hear. We all want this to succeed. But I don’t know, stressful feels like a strong word.It’s a lot of work, but then I always try to not make it a lot of work because there’s so much other stuff to do, so. Mike: I’m assuming you did this one virtual, given COVID, was this your first one virtual or have you been doing the remote since you started? Lindsay: Actually we’ve never had one in person. Heah, because we got started right when I think my first board meeting first official board meeting was March 18th. The Fundraising Journey Mike: Okay. Awesome. And earlier this year, I think at least publicly announced you guys raise some capital in February. one, congratulations. I know it’s hard to do. What was that journey like? Any takeaways? For our audience that are just getting started, maybe pre-seed type company seed founders. What was that journey like for you as a first time founder and anything you’re like, Oh man, that was like a mistake I made or I love that I did that? And that really worked well? Lindsay: Sure. I’m trying to figure out how to sum it all up. It’s interesting because right when you find your stride, it’s all over. Like then you find your stride because you bring in the money and everything before that, it’s like, “well, was that good? Did I Bumble it? I don’t know.” I guess we’ll find out, you know, if they invest or not. I enjoyed it. There’s nothing better than being able to talk to person, after person, after person about your company. This entire thing that you’re building. That’s a great feeling and it’s exhilarating and it’s exciting to be able to share your passion with somebody else and actually to invite them to be a part of it. Like that’s really cool and that’s very fun. That’s also the hardest part because it’s your baby. And when you share something with so many people, and you get so many nos, that’s hard. I mean, that is the hard part, but and in all, I think that if you, if you maintain that stature of this is my thing, I’m really, really proud of it and I am so convicted that what I believe is going to happen is going to happen, share that passion and that you really, really, truly are. You’re not asking for money, you’re inviting someone to be a part of it. And I think that if you keep that stature, it’s felt by the other party. And even if it’s a no, if you can come away, having allowed them to see that passion and that fire that you have for what you’re building, that will only do good things for the company long-term. Mike: Did you treat it as a numbers game? Did you talk to a lot of investors or did you take a more pointed approach? Lindsay: Hmm. Somewhere in the middle. Definitely talked to a lot of people and even those that I didn’t feel like we’re going to be a great fit. One thing that happens once the word gets out that you’re raising money, all kinds of entities, all kinds of different funds, pop up, which is great. And I looked at it as practice. Like no matter what,it’s always good to know more people. It’s always good to get in front of more people. You never know what’s gonna come to fruition. You never know who they’re going to know. So that said, I did not say yes to every single outreach. I was also very careful about what I shared. But every at-bat is practice. And so I talked to a lot of people, probably a total of gosh, 75 pitches or so if that’s the number that’s out there, and a lot of them, it was just, it was really great. Practice if nothing else. And then there were the ones that were like, okay, this one is what I’ve been practicing for. I think this one is a great fit. I really liked them to come in. I’d really like them to think really, really highly of me. And therefore, all of the other practices, all the other at bats, come to a head for that, you know, hope for a home run. Mike: Yeah. Okay. So 75 it’s a lot. I think a lot of people underestimate the amount of time it takes to raise capital. And I think we also probably underestimate how many conversations we need to have. 75 is probably the median, if not like on the low side, maybe for a seed round. We’re going to try to figure that out as we continue to talk to guests, but okay. So this is your baby, you have been doing this since April, 2019. It’s stressful. Right? I’ve been, I’ve been doing this now for six years. How do you stay sane as a founder? Like how do you unplug in, is it a TV working out family time? How do you separate work and starting a company? What do you like to do to keep yourself sane? How do you separate work and starting a company? What do you like to do to keep yourself sane? Lindsay: it’s interesting. You didn’t say the words, but people talk a lot about work-life balance, or you know, how do you unplug or how do you turn off work? It’s just that, I don’t ever take off. Like I have three kids I don’t ever take off my mom hat. I’m never like, well, I’m not your mom right now. I lean in and I lean back. I love my kids. I love Casted. I love everything. That is a huge part of my life. It is there for a reason. So the goal is not to turn it on and turn it off, it’s to set up boundaries along the way so that it all fits and so that you can be everything all the time. And so that means that I have to put up healthy barriers with work. We’re fully remote right now, who knows how much longer we will be. I can’t work all the time. I shouldn’t all the time be like, “Nope, I’m going to skip dinner.” I’m just going to eat dinner in my office, you know, “Hey honey, kiss the kids goodnight for me.” Like it has to be a constant daily decision to lean in and lean back on every part of life so that you have energy for everything.So that tomorrow I sit down at my desk strong, healthy, ready to go and I close up the day at the end of the day and go kiss my kids strong, healthy, and ready to go. And so it’s boundaries and balance. And then yeah, taking care of myself, I try to get good sleep. Some nights are better than others. I spend time with the kids. I’m a health nut. So I think that actually physically taking care of yourself is super, super, super important. What you put into your body and how you take care of comes back to you when you ask it to work hard for you. How have you stayed healthy during COVID? Mike: Health nut. What have you done in COVID? Has it been a diet? Has it been working out? What tips or tricks do you have? Lindsay: I try to work out every day, even if it’s like, “Oh, today was crazy. I’m just going to do a five minute quick workout, or go for a walk.” But yeah I try to work out, as much as I can and then just being healthy. Like if you fuel your body with quarantine treats all the time, you’re gonna feel it and you’re going to be sluggish the next day and that pitch isn’t going to go as well. I eat really healthy and I drink a lot of water. Just all the typical things, eat healthy, get sleep. workout, drink a lot of water. There is a Michael Polen, I think quote that’s like eat food, not too much. Mostly plants. Like just do that and you’ll feel better. Mike: I knew you were coming on. I needed to have higher energy today for our first podcast ever. So I only ate sweet potatoes yesterday. Lindsay: Just sweet potatoes. Little worried about you. When do you feel like you’re not working? Mike: Just boiled chicken and sweet potatoes and super clean. Okay. Last few questions, three questions, that were planning on asking everyone that joins the podcast. We’re huge fans of the zone of genius and that’s defined as, when do you feel like you’re not working? So I guess for you it is every day at Casted or when you are in like your flow state, where you’re like, I’m not even working? Lindsay: So it’s going to sound super duper cliche, but it’s doing this it’s I’m doing podcasts or speaking. That is the most fun thing is just having conversations about the things that I’m passionate about, which are exactly what we’ve been talking about is, you know, podcasting and content marketing and leadership and starting a company. That is flow. Before we know what the conversation’s over and time is up and it’s onto the next thing. Then I think the next layer out of that onion is learning. I think that’s one of the coolest things about being a founder, is all of the things you get to do for the first time, which is also a lot, but I mean, you’re just constantly learning. If your brain was getting wiped out tomorrow, what’s one thing you would write down tonight? Mike: Okay, next question. This one comes from Max Yoder. Max is great. And I sent him some questions and he said, well, the one I like, so I’m giving credit to this. So we’ll see how this goes. Lindsay: Okay. Mike: If your brain was getting wiped out tomorrow, what’s one thing you would write down tonight? Lindsay: Yeah. I’m trying to decide whether to be like leader Lindsay, Mom Lindsay You could be super facetious and be like, well, there’s lots of things written down already. I mean, you know, something about my kids and my family to make sure that was still intact. That’s the most important thing. Things that I would write down, actually it’s funny cause it’s Megan Brazina’s chocolate chip cookie recipe and she actually works at Lessonly with Max Yoder cause it’s the best chocolate chip cookie recipe on the planet. But as far as like, you know, Leader Lindsay. Let’s like, let’s bring it back home to this audience and what we’ve been talking about, just the importance of connection and conversation. I’m an introvert which surprises some people since I’m very chatty. So it’s really easy for me to retract to my own cave and just go heads down and do the things. But something that I’ve been working on over the last couple of years, particularly through quarantine, is to stay connected with other people. It actually is something that I need a reminder about because it’s so natural for me to just be on my own, but then I’m not okay. I’m a better leader, I’m a better founder, I’m a better partner, I’m a better mom, a better all the things when I invest in my community. The people that are around me to challenge me and help me grow and to love on me and to support me. So I’d write that down. Cause that’s something that I should probably write down anyway is to remind myself, like go connect with other people. Don’t try to do this alone. Who is someone you’d like to give thanks to? Mike: Okay. I love that. And our final question before we wrap this one, I think is going to be interesting to you in terms of what people say. On Monday morning, Visible has been fully remote since we started and on our all hands, we go around and talk about priorities for the week, but then more importantly, someone gets thanks to a team member for something that they did for them the week before. Is there anyone you want to give thanks to right now that maybe you haven’t thanked before or someone that just really helped you out over the past year and a half since you started? Lindsay: So many people. So like my answer that I just said is about community and how we’re stronger together. So, so many people. I think, you know, again, especially given this show and who you’re speaking to founders, I’m going to thank my co-founders. I know that’s two people, but I’m going to take it anyway. Adam Padrino, Zachary Ballenger, just full sto. They’ve been amazing. We’ve been an incredible team. We have grown together as humans and we’ve grown this business and together done some really, really incredible things, both business-wise and culture within our team and hired some incredible people and got to work with some fantastic customers and create this incredible product. I mean, it wouldn’t be what it is today without them. We wouldn’t be going where I know we’re going to go if it wasn’t together. So there you go. They’re going to squirm cause they hate attention. Mike: One mistake I’ve made is that I don’t have a co-founder. So that’s one thing I will certainly change in the next go around is I wish I had that. That’s a whole nother episode Lindsay: We could talk for a long time. Mike: I can just talk to myself about it. It’ll be an internal monologue with myself. Well, Lindsay, I can’t thank you enough for one taking your time out of your busy day and then to really being our guide, for the Founders Forward podcast as we get this going. So thanks so much for joining us. How do you think we did for episode one? Lindsay: I am so excited that you’re doing this show. Obviously I’m biased because everybody on the show knows by now that I’m super biased about podcasts, but you all are doing such amazing content. This is going to be a really, really incredible show. And I’m so honored to be a part of Mike: Thanks so much. All right, everyone, we’ll see you for episode two. The Founders Forward is Produced by Visible Our platforms helps thousands of founders update investors, track key metrics, and raise capital. Try Visible free for 14 days.

What is a 409a valuation? Most founders aspire to take their companies public. Until that dream is achieved (or another is realized), it can be a bit tricky to understand the value of a startup along the way. Public companies value are set by the market. Private companies, however, depend on independent appraisals and private valuation.That is where a 409a valuation comes in. A 409a valuation is a critical term and concept founders need to know. A 409a valuation is the fair market value (FMV) of a private company’s common stock. This FMV is determined by an independent appraisal. Common stock is the stock that has been reserved for founders and employees. A 409a valuation determines the cost to purchase a share. Related resource: 8 Startup Valuation Techniques and Factors to ConsiderWhat Does the DCF Formula Tell You? What are the benefits of a 409a valuation? A 409a valuation is critical if you want to offer equity to your employees. While startups are getting up and running, matching benefits of large, established public companies can be difficult. A great option to offer new employees (and attract top talent) is to offer equity in the business. Offering stock options that will vest (or become accessible or earned) after a period of time promises high earning potential and promotes loyalty and employee investment in the vision and growth of the company. A 409a valuation is needed in order to accurately offer this benefit to your team. In addition to providing attractive stock options for your employees and attracting top talent to your business, another benefit of a 409a valuation is that understanding and keeping this valuation up to date can help attract new investors and help a founder intelligently grow their business. We will cover when you should get this valuation done (and how often) but the insight provided by the valuation can be another metric to showcase success to investors and board members, especially if a startup is not cash-flow positive or growing revenue yet. Having a clear understanding of how much your business is worth by continuing to seek out an updated 409a valuation is critical for founders as they grow their business and get to the critical point of taking the company public or selling it for a profit. When is a 409a valuation required? To start, it’s important to highlight how long a 409a valuation stays valid. A 409a valuation is only valid for up to 12 months after its issuing date. The only exception to this timeline is if a material event occurs prior to the 12 month timeline. Material Events Material events are pivotal situations or changes to the business that would dramatically shift the valuation. Some examples of “material events” include: Financing such as convertible debt, sale of common shares, or preferred equity. Qualified financing is probably the most common material event startups will encounter. Acquisitions – if your startup chooses to buy another company this would qualify as a material event and significantly alter the 409a valuation. Divestment – selling off part of the business or any of the major assets of the business would shift the valuation. A secondary sale of common stock would, though less common, would also be a material event same as an initial sale of common shares. Any major exceeding or missing of financial projections for the business (annually or quarterly) can be significant enough to be considered a material event and trigger the need for a new valuation. Major business model shifts are also sometimes considered a material event. If, as a founder, you are ever unclear on what constitutes a material event, always consult a 409a valuation firm to be sure. Technically speaking, a 409a valuation is required every 12 months or whenever a material event occurs. Beyond these requirements, there are critical times in the startup lifecycle where 409a is very much needed in order to continue growing and building your business in a smart, successful way. Related Resource: A User-Friendly Guide on Convertible Debt In order to receive a 409a valuation, you should be prepared to provide the following information to your independent assessor: Company overview including executives names and an overview of your startup’s industry A certificate of incorporation / corporate charter The most recent cap table A board presentation and recent pitch deck especially if you just completed a round of funding Historicals and 3-year profit and loss, cash balance, and any debt projections – essentially a complete financial picture Estimate of your hiring plan and options estimate you expect to issue over the next 12 months, the typical period that the 409a valuations are valid for. A list of publicly traded companies that are comparable to yours. Any info about expected timelines relating to IPOs, acquisitions, or mergers Any other significant events that have happened since you last had a 409a valuation created. When do I need a 409a valuation for my startup? Beyond the technical requirements of every 12 months and when a material event occurs, there are other circumstances where it is highly recommended that you get a new 309a valuation. Though not necessarily “required” these instances are critical to your success as a startup and as a founder because this new valuation will equip you with the most up-to-date information on the worth of your startup and provide another data point for growth. Other instances where you need a 409a valuation outside of material events and the 12-month mark are: Before issuing common stock for the first time As stated, stock for your co-founders and employees can be a huge perk to offer in order to attract top talent and retain hard-working employees who will stay loyal and push the company forward. When common stock is available, all employees have a stake in the success of the business and want to push the company growth forward because they want to vest their stock when the company is on the verge of going public or getting acquired in order to walk away profitable from that common stock. That being said, you need an initial 409a valuation to even have the opportunity to offer this stock to employees at all. After raising a new round of venture financing Raising a round of venture funding is extremely monumental for your business. Weather your startup is raising an initial seed round of just a few million or a 40M + round 3-4 years in, that type of capital injected into the business is extremely significant. While a pre-money and post-money valuation will also be in play, it’s important to reassess your 409a valuation after this type of significant funding, too. After raising a new round of venture financing it is necessary to get a new 409a valuation because the new cash injection in the business will significantly change the speed at which you are able to scale. You will most likely be hiring more and offering more common stock so an updated valuation is crucial to do this accurately and intelligently. If you are taking on a lot of new venture financing over a short amount of time, it is still recommended that you get a new 409a valuation after every round, even if that is close to your 12 year expiration of an existing 409a valuation or another material event. This is because venture funding is typically such a high-value injection for your company and there will be a new breakdown of ownership with the new investors at the table. As you approach the “end” of your startup with an IPO, Merger, or Acquisition If your company is on track to go public, or have an initial public offering (IPO) on the stock exchange, it is critical to get a final 409a valuation. A 409a valuation is only in existence when you have common stock and are a private company. So as you approach the time where your company is going to IPO and be publicly available for trade, those common stocks worth will convert at the public valuation. With that in mind, as your company approaches IPO, a new 409a valuation is necessary one final time. This final 409a valuation is going to be a factor in what the startup IPO’s at. That initial public offering will be influenced by your 409a valuation (among many other things). Its best to ensure your public offering is influenced by as many factors as you can control before the market takes hold of it. Having an accurate 409a valuation leading up to IPO sets up all your common stockholders for success by having the most realistic and up-to-date picture laid out. The same goes for approaching a merger with another company in your company’s space or selling the company to be acquired by a larger company. Both instances can lead to a big payout for your common stockholders. However, in both cases, good due diligence on the part of the acquiring company leadership or leadership at the merging company should be to ask for a recent 409a valuation. It is necessary to invest in a new 409a valuation leading up to this major “end” event for your startup. An acquisition or merger will most likely change the primary owner of the business and shake up the valuation of the common stock. In some cases, if your private startup is acquired by a public company, your common stock will be absorbed by the public stock of the buying company. That being said, an updated 409a valuation is important to influence the market value of the stock that your employee’s common stock will be converting to. Let’s note, however, that this is dependent of course on the way the merger or acquisition deal is structured and if stock is at play for the existing startup employees. How do 409a valuations work? We’ve laid out when a founder should seek a 409a valuation for their startup, but now let’s dive deep into how a 409a valuation actually works. A 409a valuation is calculated by an independent appraiser with no affiliation to the startup at hand. This is done to ensure the valuation is fair and based on a defensible methodology. An independent appraiser will approach a 409a valuation with one of three main methodologies. The three methodologies that might be used include: Market Approach A market approach is a methodology where the independent appraiser will look at comparable companies in the public market in order to reach the private 409a valuation. The market approach uses something typically known as an OPM backsolve. An OPM Backsolve is a methodology where the appraiser assumes the new investors or recent investors paid fair market value for their stock options and equity. Investors typically receive preferred stock, however, so the OPM backsolve is a special application for an option-based valuation method that takes into account the market value payment to calculate the preferred options into common stock options. Asset Approach The Asset Approach is typically the best approach for new startups that are pre-revenue and also have not raised any outside money. It is a very simple approach that consists of simply calculating a company’s net asset value and that number determines the proper valuation. These valuations are typically straightforward because it’s too early and there aren’t enough defining financial changes (positive or negative) to affect the valuation. Income Approach An income approach is a bit more straightforward than the Market Approach and basically the easy option for a company at the opposite end of the startup spectrum that would be using the asset approach. This is an approach that is typically used by independent appraisers when the startup receiving a new 409a valuation has a high amount of revenue and a positive cash flow. Using the income approach, a fair market value is determined by looking at a companies total earnings, or assets, and subtracting any outstanding liabilities or debts. Again, this approach is typically going to be the most effective and beneficial to a startup when they are in a positive earning position with high revenue. Typically if these 409a appraisal methodologies are done within a 12-month valuation and done within these methodologies in the correct way as deemed by the IRS, they may be eligible for safe harbors to ensure extra security for that valuation. These are just extra protection for your business as long as the valuation isn’t extremely unreasonable. To review, an asset approach is typically used at a startup’s inception and pre-revenue / pre-funding. An income approach is used to find a valuation when a company has high revenue and cash-positive. A market approach is used at every step in between asset and income stages or when there are more factors at play with investors or recent finding where an income approach is too simple. Independent appraisers may use any of these methodologies to find a 409a valuation so let’s dive into how much a 409a valuation costs. How much does a 409a valuation cost? Typically the cost of a 409a valuation can vary depending on the different aspects of a startups business and how complicated the valuation is going to be. The cost of a 409a valuation will also depend on how it is offered by your provider. Some providers offer it as a standalone service while others bundle it with other financial offerings which can alter the price. The average cost of a typical 409a valuation will range from $1,000 to $10,000. The effects on cost include size of the startup and complexity of the company. Complexities could include significant material events, fundraising, cash position, investors involved, and timeline of the startups path to IPO. An independent firm offering a valuation may offer a valuation with a flat rate of $1,000 but increase by $500+ as the state of the business becomes more complex / for each additional 409a valuation requested. Now that we’ve talked through what is needed to created a 409a valuation and the typical cost range of a 409a, lets outline who can help with a 409a valuation. Who can help with my 409a valuation? 409a valuations can be provided by a variety of financial sources. They can be provided by independent financial firms and banks. Tax firms are also a key resource and provider that can give you a 409a valuation. If you believe your 409a valuation will be especially complicated, a tax firm may be your best bet to ensure all IRS requirements are fulfilled and any safe harbors that can be are taken. 409a valuations can also be calculated by software companies specializing in the practice (in addition to other financial services). Pulley is a great choice for startups to calculate their initial 409A valuation because you can also issue option grants using the 409A price directly on the platform. FAQ If you missed these pertinent pieces of info in the post or simply want a refresh, here are some frequently asked questions. Is a 409a Valuation public? No, a 409a valuation is not public as it is only available to privately held companies. In order to get a fair market value appraisal, a startup must look to publicly traded companies in their space for a comparison. Is a 409a Valuation required? Technically a 409a valuation is only required if you want to offer common stock to founders and employees. Investors technically take preferred stock, however, that relies on common stock valuation too. Typically the case to NOT have a 409a valuation will be the exception not the rule. 409a valuations are strongly encouraged if not typically required based on the nature of how you will most likely be financing your startup. When does a 409 Valuation expire? A 409a valuation expiries after 12 months or when a significant material event occurs before the expiration date.

What is a pre-money valuation? In the world of startups, valuation of your startup is discussed constantly. Understanding that valuation, however, can be a bit confusing depending on where you are in your funding and startup journey. The valuation of your startup will shift significantly (as will the risks) as soon as you decide it’s the right time to take on funding. Now whether a founder or founding team decides to take on angel investors, venture capital backing, or bootstrap your business, if funding is involved a startup will have a pre-money valuation and a post-money valuation. Understanding this difference is essential startup knowledge. The definition of this type of valuation is fairly straight-forward. Pre-money valuation is what a startup is worth without external funding or prior to a round the startup is actively raising. This is the valuation given to a potential investor before a funding round to showcase what the company is currently worth. The pre-money valuation of a company will shift overtime. It will be different before initial funding vs. before a Series A for example. What is a post money valuation? On the flip-side of a pre-money valuation, a post-money valuation is what the startup is worth after that next round of intended funding takes place. This will have some significant change because the new investors receive a percent value of the company. Post-money valuations are a more set amount based on true money worth of the company. There are no potential factors within a post-money valuation. Pre-money vs post-money valuation for startups While the difference might seem clear between pre-money and post-money valuation for startups, there are a few things to keep in mind when understanding valuation in general and why these numbers really are so significantly different. Valuation, in general, is fluid. It is speculative and flexible. Valuation is completely driven by the market and opinions of various players in the game. Entrepreneurs and existing investors will want a high valuation. They believe in the idea already and want to make sure their shares aren’t diluted when new funding is taken on. New investors, however, will want to assess all risk and ensure they aren’t overpaying or overvaluing and risking their financials. They way that an investor positions their pre-money valuation can affect the post-money valuation and ultimately the founders, investors, and all current shareholders valuation. Related resource: Navigating Pro Rata Rights: Essential Insights for Startup Entrepreneurs Timing is Everything As stated, pre-money valuation is set prior to the investment round while post-money valuation is a fixed valuation after the round is complete. Because of timing, post-money valuation is a lot simpler. That number will always be fixed. Although post-money valuations are simpler, pre-money is more commonly used. Pre-money valuations can flex so much because of the timing and number of factors in place that could affect the valuation in any given scenario. Pre-money valuations are affected by employee share open plan expansion, debt-to equity conversions, pro-rata participation rights, and of course the value and market opportunity seen by current stakeholders and founders. To break down some of these terms: ESOP (employee share open plan) are the plans given to employees of the company to vest as shareholders. Debt-to-equity conversion is any potential situation where debt taken on by the startup is promised to be paid back by a value amount of stock. Pro-rata participation rights are the rights (typically not contracted) to previous investors to invest in future rounds at a set level to maintain ownership rights. Timing is everything for pre-money valuation because it will affect the post-money valuation. If a startup is growing rapidly, doing really well in the market, and the potential is obvious because of demand in the market or interest from other investors, a founder may be able to get a really great pre-money valuation. If the founder is looking for funding to bail out the company or because growth is only possible with more capital, then that could affect the desirability of the startup and therefore lead to a lower pre-money valuation. Price per share or PPS is the focus. The market price per share of stock, or the “share price,” is the most recent price that a stock has traded for. It’s a function of market forces, occurring when the price a buyer is willing to pay for a stock meets the price a seller is willing to accept for a stock. A solid PPS is the goal for any company taking on funding to set themselves up for a successful IPO or acquisition at some point. This is ultimately an understanding of what an investor will pay per share for a startup. The PPS is the pre-money valuation divided by the fully diluted capitalization. The PPS and pre-money valuation are directly proportional (one goes up, the other goes up). So, the greater the pre-money valuation, the more an investor will pay for each share, but the investor will receive less shares for the same investment amount. Every startup founding team wants to make sure they are setting themselves up for a successful end game so timing their funding to line up with excellent pre-money and post-money valuations is critical. Why the differences matter The differences of pre-money and post-money valuations matter. Outside of timing, the main difference between pre-money and post-money valuation is the insight they provide to investors. A pre-money valuation provides value into the potential shares issues while post-money valuation provides a hard, clear, and fixed numeric value equating to the current value of the difference. A hypothetical, potential value pre-money leading to a set value post-money. The difference is critical for founders to understand. Why are pre-money and post-money valuations Important? Ultimately, pre-money valuation and post-money valuation matter because these valuations also have the biggest impact on determining the percentage of a company an investor is going to acquire for a given investment, as well as the percentage of the company the existing stockholders will retain. Having a deep understanding of pre-money and post-money valuations will certainly help during negotiations as well. On top of being an integral part in the dynamics of a deal it is also an easy way to portray to potential investors that you understand the mechanics of a startup and cap table. A pre-money valuation can make or break your post-money valuation. Understanding what factors go into a pre-money valuation can help a founder make an informed decision when choosing to take on new investors or not and ultimately retain a solid post-money valuation they can stay excited about. How to calculate pre-money and post-money valuations? Now that the differences and importance of pre-money valuation and post-money valuation is clear, breaking down how to actually calculate these values is the next step in building out essential startup knowledge. Calculating Pre-Money Valuations Pre-Money valuation is pre-funding so it’s important to keep that in mind when calculating this valuation out. The catch to this is to factor in the post-money valuation you want to get your company to – that is critical into calculating the pre-money valuation you are going to pitch to investors. The formula to use for this is: Pre-money valuation = Post-money valuation – investment amount Understanding what factors you have in play that will be attractive to investors and then incorporating that into your projected goal post-money valuation will lead you to understanding what investment amount to seek and how to ultimately present a pre-money valuation to investors. Calculating Post Money Valuations Getting to your post-money valuation is much simpler than calculating your pre-money valuation. The main thing to keep in mind for calculating the post-money valuation is understanding what percentage of your company the new investor will receive and ultimately understanding how that takes away the value overall. A good way to think about calculating post-money valuation is by using this formula: Post-money valuation = Investment dollar amount ÷ percent investor receives The post-money valuation will be a fixed dollar amount and does not flux in the way a pre-money valuation can be adjusted. Ultimately, it’s important to understand pre-money valuations and post-money valuations if you are ever going to be involved in a startup at any level. Employees should understand this when considering their stock options and how their company presents those to them. Founders need to understand this to intelligently grow their business and of course investors need to understand these valuations to make smart investments and walk away with high-potential earnings. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

Last week our CEO, Mike Preuss, joined the Product Market Misfits podcast to discuss Mike’s lessons from building Visible and how startups can think about fundraising. We’ve shared our favorite quotes and takeaways from the podcast below. If you’d like to give the full episode a listen, you can do so here. Fundraising is like B2B Sales We think that the fundraising experience for a founder is the same as what a B2B enterprise SaaS selling motion is. So you have your prospecting and awareness of your brand at the top of the funnel. And then all the way at the bottom of the funnel, you have current investors and investor updates which I would call customer success, right? And then in the middle you have things you are putting a pipeline together and having meetings and those meetings are progressing. And, hopefully I get a couple, a term sheet or more at the end of that whole process. We often compare the traditional VC fundraising process similar to that of a B2B enterprise SaaS sales funnel. Dan asked Mike about how investor updates can be a secret weapon for a startup (as mentioned in a previous podcast episode). Mike goes on to explain how investor updates can fuel your “fundraising funnel.” Learn more about running a fundraising funnel here. Connecting the Dots for Potential Investors If I’m sending an investor update out every month and sharing a light version with potential investors, I’m staying top of mind to them. I’m showing progress along the way. You’re probably building a relationship with them through that, that mechanism. Because remember a big part of this whole kind of song and dance of fundraising is building a relationship with new investors. Speaking more tactically on the idea of using investor updates during a fundraise Mike mentions how the value of investor updates can be two sided. One one hand, you can use a light version of an investor update to “nurture” your potential investors to speed up the conversation and negotiations when the time is right to raise. Using Investor Updates During Due Diligence A lot of times in diligence, depending on the stage, investors will ask for you to send them your last 12 months of investor updates. If you don’t have it that’s a really bad sign. But done correctly that will help weave a narrative and will let the investor see think, “hey, this is how I can expect for them to engage with me after I write a check.” On the other hand, investors updates are a vital part of the due diligence process. One of the first places your new potential investors will ask about how you operate is your current investors. If you do not regularly communicate with your current investors and they are not willing to be an evangelist with new potential investors, that is generally a red flag. As Mike mentioned, new investors may simply just want a first hand look at your last 12 updates as well. To learn more about investor updates and how you can leverage them for fundraising, check out our investor updates guide here. On the Importance of Harmony in the Workplace Harmony is our secret weapon. What I’ve realized is that just because you’re working more hours or your butts in a chair doesn’t mean you’re actually more productive and we have a lot of bit data to back that up. When asked, “what is your secret weapon for team culture?” Mike dug into the importance of harmony at Visible. Mike goes on to explain how he does not prescribe to the idea of work/life balance. Rather work is a component of life and there needs to be harmony between your life and the things that are a part of it, like work. Mike and Dan go into deep detail to cover more tactical fundraising advice, company building, and “secret weapons” that Mike has used during his time as a founder. If you’d like to give the full episode a listen, you can do so here.

Last week, Mike, our CEO, joined Russell Benaroya on Stride Services’ “Stride 2 Freedom Speaker Series,” where every week Russell interviews people who can help you move your business faster. Russell and Stride have been longtime users of Visible & great partners to work with. On this episode, Mike & Russell discuss Visible’s recent developments, the relationship driven nature of venture capital, and why people invest in lines rather than dots. You can listen here. Related Resource: 11 Venture Capital Podcasts You Need to Check Out VC is a Relationship Driven Business Venture capital investments take a long time to reach maturity. In many cases, an investor is “hitching a wagon to you for the next 10+ years.” You need to show that you’re trustworthy and working for the long term to persuade an investor to take a chance on your company. Good Communication Has a High ROI At Visible, we like to say that communication saves startups, but it can also help startups get off the ground. Mike mentions that it’s rare that an investor will write a check based on a single interaction. However, investors are able to see your growth if you have past investor updates that you can share to show your progress over time. They’ll also feel good about your level of transparency, and believe that you’ll keep them in the loop too if they decide to invest. Relationships Are Built On Lines, Not Dots You need to show consistent improvement over time when fundraising. It’s impossible to build an accurate judgement of a business or an individual with only a handful of scattered data points. Long term relationships are built through consistency of character, and long term businesses are built by consistent iteration and effort. You can impress people by showing how you’ve developed over time, regardless of where you currently stand. It’s crucial to focus on lines, rather than dots when building investor relationships. Good Leaders Care About the Team What does Mike wish people asked him more about? The team. Startups are built by teams, not just founders. When asked about how we built our newsletter to nearly 20,000 subscribers, Mike recognized that the credit belongs to Matt (who runs marketing here at Visible), rather than himself. The more that a founder can celebrate a team & lead effectively, the better they will perform in the long term. The Startup Ecosystem is Increasingly Global While Silicon Valley will likely remain the primary startup hub in the US for the foreseeable future, the emergence of new startup ecosystems around the world are beginning to attract new founders and investors. At Visible, we’re fortunate to help thriving entrepreneurs from around the world, and Mike has been personally exposed to many startup ecosystems around the US. With the rise of remote work during the pandemic, founders are re-evaluating whether or not they need to remain in the traditional startup cities. As a globally distributed team ourselves, we can verify that A+ talent exists in every corner of the world. Founders everywhere are waking up to this trend – expect to see more startups founded worldwide, not just in northern California.