The Venture World

Finding My Tribe — The Upside of the Downcast Year

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It’s been a tough year globally. Many feel the division in our families and societies. It has been heart-breaking to see progress reversed and social & racial tensions exacerbated unnecessarily.

Much of the focus on the public discourse has been how social media and the polarization of information sources has worsened the problem. We seem to be stuck on the narrative that our angst is tied to the arguments we’re having on Facebook, Twitter or the Thanksgiving dinner table.

I feel the weight of these differences, too. There was a period of time where we were encouraged to open up our horizons and make sure we were listening to the viewpoints of others. I did much reflecting and listening and reading.

I wanted to better understand the African American journey and anxiety better so I read “Between the World and Me” which was important to me even if its conclusions were sometimes hard to read. I watched 13th and cried.

I was touched by the messages of J.D. Vance and his poignant comment that white liberals go so far to try and remove any racial & religious prejudices from their minds & hearts yet still condescend and show prejudice against poor, white, working class populations of what we call “fly over states” or areas like Appalachia. It was hard for me to disagree with this view when I heard it so I read his biography “Hillbilly Elegy” and recommend it highly. The first step of understanding is reading an informed narrative of lives lived differently than yours.

I read books like where a professor in moral philosophy — Jonathan Haidt — discusses how humans make decisions in daily life and how they rationalize the choices they make. His book “The Righteous Mind — Why Good People are Divided by Politics and Religion” literally changed my views about how human decision-making and gave me a framework for understanding why some people may be wired to view the world differently than I do. He made me realize that people in industrial areas weren’t necessarily irrational people stupidly voting against their own economic interests but rather were making choices that supported different moral foundations than those that I thought were important to them. He made me think hard and realize that of course I personally vote against my own economic interest by supporting higher taxes and spending on programs to create equality and fairness so it might be understandable that others vote against their perceived economic interests on the other side, too.

I continue to go on a path of self discovery. But in the past year I’ve also realized something very important that I think gets missed in our anger about the blatant racism and anti-semitism and muslim fear-mongering promoted by the President of the United States and the apologists who surround him …

I’ve also found my tribe and feel more bonded to them.

I want to hug Hunter Walk and Manu Kumar for every post on Facebook where they speak out for values I hold dearly. I have grown closer to my sister-in-law Adrienne in absolute pride at her political activism with her three children marching on behalf of women’s rights and tolerance.

I’ve always considered Jason Hirschhorn a dear friend but he has now become family. I have to take twice as many meetings with Rebecca Kantar now because we need half of our meetings to debate how to save the world and half to talk about how Imbellus is moving from strength to strength.

Jonathan Strauss decided to take time off of work to help in local elections. I am inspired by his dedication.

I’ve talked with immigrant founders tell their stories about coming to this country and their fears for their children’s futures. These have gotten emotional and personal and I’ve never felt closer to many of them.

I’ve been proud of my partnership and their complete support for the rights of women and people of color and immigrants and refugees. I feel ever more bonded that we have built a tribe that is supportive and aligned.

I love CRV for the anti-Trump stand they took during the election and I want to find more ways to work with them.

I am grateful for the public voices of Chris Sacca and Kara Swisher and Ina Fried. I feel blessed by the positives notes of encouragement and the voices from friends like Foundry Group. I text Walker & Co. founder Tristan Walker more often and share our frustrations and disbelief but I also feel more kinship and unity.

I feel fortunate that many of my LPs have thanked me for speaking up and I’ve learned so much about their families and their own personal missions. I feel united.

I am grateful that my kids who long teased me for watching too many politics shows on Sundays now regularly watch Trevor Noah and Stephen Colbert and know way more about what’s going on in the United States than they ever have before. They are engaged.

In the wake of Charlottesville it is easy to feel despondent. But the reaction of cities to rip down Confederate statues across the country is such a positive boomerang effect.

Politics in this country are going to get a whole lot worse. I will have to unfollow more people because frankly I DON’T WANT TO HEAR THEIR VOICES. And I’m ok with that. I can understand the other side from reading thoughtful books and magazine articles and not from vitriolic yelling or trying to justify blatant racism. I don’t need that in my life. And it’s ok if they’re tired of hearing from me, too, and choose to unfollow. I can’t NOT speak up: Silence killed too many of my tribe just 75 years ago in Europe.

But as things get a whole lot worse I also have comfort that my relationships and bonds with those I love, admire and respect are going to get a whole lot stronger. And it’s time we look at the positive side of this moment in time.

I’ve found my tribe.

Photo credit: mollyktadams via VisualHunt

Finding My Tribe — The Upside of the Downcast Year was originally published in Both Sides of the Table on Medium, where people are continuing the conversation by highlighting and responding to this story.

11 Quick Tips to Get More Value out of Your Board

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Many board meetings are bored meetings. Management teams whisk through slides trying to get through a presentation to share how great things are going and they are eager to get through the meeting so they can get back to their real jobs. This is a shame since the value that the right board could add is immense if you select the right board members and manage them effectively.

Yesterday I wrote a blog post about what the role of a board actually is. In short the board is there to represent the interest of all shareholders (big & small) of the company and all other stakeholders (debt, creditors, employees, etc.). The board’s job is to review the company’s financial performance and strategy and help provide counsel to the executive team.

Some boards are highly functional, many are not. Sometimes dysfunctional boards are a result of having investors who don’t really understand their role on the board or have the right skills or experiences to be helpful. Sometimes poorly run boards are a function of the executive team not knowing how to get the most out their boards (and also their investors).

I can’t change who your board members are so let me offer some thoughts on how to make your interactions with your board more productive.

Communicate frequently and proactively

The most effective CEOs that I’ve observed send regular, short, board update emails every few weeks or monthly just to give the board a sense of what is going on. Of course it’s not required and many don’t do it. But I find that the more informed your board is and the more you’re staying on their radar screen the more effective they’ll be for you.

As a starting point the more you’re on their mind the more likely they’re out advocating on your behalf when they are out talking with senior executives at potential customers, future potential investors, potential employees, biz dev partners, journalists and all of the other constituencies where investors should be helping you.

The more you keep investors update the more likely they will respond and try to be helpful for problems you’re trying to solve. The most updated they are the more prepared they are when they do turn up at board meetings. And the more informed they are (thus the less surprised they are if things aren’t going to plan) the more they feel bought in to your company’s successes or setbacks and the more productive they will become.

Keep your updates short and to the point or they run the risk of not being read and also don’t waste your time on too long of updates.

I wrote a much longer post a while back on communicating with investors between board meetings — ->

Run board discussions not board presentations

Many board meetings become really long slideshow presentations where management takes the board through pages and pages of financial results and plans. Once you prepare the deck each department that contributed slides feels compelled to get it’s half hour of time presenting their progress. The problem with this approach is that most of this information could be disseminated before the meeting and the time you have with what should be some of your most important mentors is wasted as they turn into an audience vs. counsellors.

Your goal should be to have discussions with your board. As executives you know the details of your company infinitely better than we ever will and you shouldn’t suck us down into the weeds with you. In stead, we can be valuable in that we see dozens of boards and situations and can try to offer helicopter view solutions from what we’ve learned elsewhere. Boards shouldn’t assume that situations are broadly applicable but by introducing views from experience across many companies this should give executives ideas they may not have seen on their own.

I’ve written a more detailed post on how to structure a board meeting — ->

Run board meetings focus on solving strategic issues

So in stead of wasting your time walking us through financial information we should already be familiar with you should spend your time walking us through a few key decisions you’re trying to make and get our input / debate on the topic.

Boards will only discuss the information you provide them and will mostly get off track if your agenda or your management style allows them to. If you set expectations before a board meeting and get financial information out before the board meeting and understand any issues on the minds of investors before the board meeting your actual discussion will be infinitely more productive.

Remember — it is your responsibility to stop investors who want to get into the weeds and it’s important for the good of all board members. Nothing drives me more bonkers than board members who want to hold dissertations on 409a valuations, product feature minutiae or spend 30 minutes on how many people they know that they can introduce you to. This should all be handled outside the board meeting.

I’ve written before on the topic of how to avoid letting your board members take your meeting down a rat hole — ->

Get financial information out early

Financial information should be sent out 72 hours before a board meeting. If you send a deck and information 24 hours before the board meeting or at 11pm the night before a meeting then you should expect that investors will come unprepared. I always read the deck before the meeting but if I get it 12 hours in advance I certainly don’t have time to do analysis, formulate views, check on facts and so forth and therefore I’m less prepared to add value when I arrive.

Early stage tech startups aren’t public companies so you don’t need to obsess with “having your books formally closed” or scheduling the board meeting only after the end of the quarter. If you’re at that level of reporting you’re probably sub-optimizing your board’s role.

Have pre board meeting calls

I always recommend that founds call each board member well before the board meeting for a super quick update. First, it meets the needs of point 1 — super frequent communication. But secondarily it enables you to walk an investor through the major financial information in advance so they can turn up and be more productive in the actual meetings and focus on strategic topics. Most investors want to enquire about a few operating metics and this type of discussion is less productive in a group setting.

But as importantly is that by having pre-board calls you can run the agenda items by the board member and confirm that these topics are what are on his or her mind. That way they feel bought into the topics when you meet and if they DO have a burning topic on their mind (let’s say their upset about something) — you get a chance to learn about it in advance and come more prepared.

Never be surprised at a board meeting. If you’re surprised at a board meeting it’s on you.

Never decide anything super critical at a board meeting

I know that it can be controversial to say “nothing critical should be decided at board meeting” but it’s actually a really important point. You can “ratify” critical decisions that were discussed individually in advance. You can get a group of people to come to consensus on the direction of the company — choosing amongst multiple difficult options. But you should really know board members views before the meeting. If you can’t get a board member to see your point of view in advance then at least you can try to modify your position to win their support.

This follows the golden rule of any political decision: you lobby in advance, you count your votes, you modify your positions to build consensus and then you show up to ratify the position you’ve triangulated in advance. Just “showing up and seeing how things go” is a recipe for things to get off track.

I have a much more detailed post on this if you’re interested — ->

Follow up on post board meeting actions

Many things get decided at board meetings. But also many ideas percolate but aren’t fully decided or require more work. What you do after the board meeting can be as important if not more important than what happens in the time you have together. If you took away actions — follow up. If a board member agreed to take actions, hold them accountable. As with most meetings, much progress is squandered by lack of follow up. I know it sounds obvious. It IS obvious. Yet more people of guilty of this than you’d imagine. It turns out many people are terrible at follow up.

Have as many board meetings in person as possible

There are times when a given board member can’t be in person. It happens. But you should push for as many investors to be physically present as possible and as often as possible. If they need to dial in make sure they’re on a web conference and you can see them and vice versa. When you dial in by voice most people have a harder time being totally in sync with the conversation and are often distracted by other activities. There is no way they’re as productive when it’s just voice. Also, having a well functioning team with a high degree of trust in each other and confidence in each other’s opinions is critical to a successful board. And you simply can’t build relationships on the phone.

Ban the use of electronic devices at board meetings

I know they are “taking notes” for the meeting and “reviewing slides” and materials and need their: laptop, iPad, phone, etc. It is a HUGE MF distraction. I’m usually more able to see their laptops than you can at the front and I promise you — best will the world — they are sneaking a peek at their email, stock prices, web, etc. It’s human nature. Help them be their best selves by banning electronic devices if you want a productive meeting. I recommend you do a 15 minute break in the middle of your meeting and inform people that there will be sufficient time to check in on their email during the break. Obviously there are exceptions if they have something mission critical going on that might pull them away. But this should be the exception, not the rule.

I’ve written more about this topic in the past — →

Allow enough time for a board meeting / don’t rush through it

Some people schedule 90 minutes for board meetings. Maybe 2 hours. Unless you’re a super early stage company there is no way that this is enough time to: Present information, frame strategic options, have informed discussions, agree actions and build important relationships across board members. If you’re trying to “get through your deck” and get back to work then 2 hours is plenty. If you truly want input, discussions and relationships — NFW.

Build social relationships amongst your board members

I am a strong believer in getting board members out for social occasions together. We’re all busy so it can’t be every meeting but certainly once or twice / year you can have a board breakfast, lunch or dinner to build social relationships. These relationships are critical to getting your board to act in concert in difficult times so invest early in building a “board team.” I personally prefer if the board meeting is before the social occasion or otherwise the meal ends up becoming a mini board meeting and the actual meeting feels superfluous. I suggest the meal either be purely social or at least a follow-up discussion on board topics you’ve already debated in the meeting.

There you have it. 11 tips. I’m sure I could keep going. Boards take work. But the best boards are super critical to your success and you get out of them what you put in.

Photo credit: BaileyRaeWeaver via Visual Hunt

11 Quick Tips to Get More Value out of Your Board was originally published in Both Sides of the Table on Medium, where people are continuing the conversation by highlighting and responding to this story.

What Do Boards Actually Do?

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There’s a lot of mystique about what happens at board meetings and a lot of imagined board-room drama. I read commentary or Twitter or blogs and realize that there are also strongly held convictions that there are these evil VCs who do terrible things to mostly altruistic founders.

The image of boards and of investors vs. founder conflicts has been so at odds with my experiences on dozens of boards over the past 20 years that I thought it was worth sharing what I actually see.

As a starting point the board is intended to have legal and financial responsibilities to a few key constituencies: shareholders, debt holders, creditors, employees, government and major parties with whom the business operates.

In some ways being a board member is like how I’ve heard people describe learning to become a pilot: Many hours of boredom followed by some brief moments of absolute panic and fear. In fact, as one Twitter commenter observed to what do board do, “Often, not much.” That’s true. Executives run the day-to-day so often the board is more involved as a sparring partner at key intervals.

The administrative work we actually do at board meetings?

  • Agreeing an annual budget
  • Setting a 409a valuation used to price stock options
  • Agreeing stock option allocations
  • Reviewing financial performance
  • Talking about the organizational structure and where we need to bolster things
  • Discussing sales & marketing strategies, product launches, technical challenges
  • Talking about law suits (patents, trademarks, employee disputes)
  • And so forth

Between board meetings we do calls to discuss performance or major initiatives. Often we are asked to get involved in executive-level recruiting. And of course we help with business development introductions and with fund raising events.

Board work does involve a lot of conflict at moments throughout the company. Sometimes conflict comes because a company isn’t hitting its expected targets and investors vs. executives have different views in the causes or the consequences of under-performance. Sometimes conflict comes because executives want to increase personal compensation and investors aren’t in favor of this. Sometimes it comes because investors believe the company needs more experienced leadership to run the company or more often to help run the company.

But unlike the popular press reporting of this conflict — 80% of the time it is founder-to-founder conflict and not investor-to-founder conflict. The overwhelming majority of conflicts that I’ve seen on boards over the years are a result of the tensions of either:

  • underperformance of a company in which executives blame the action of each other or specific individuals
  • founders or senior executives in a company upset that they don’t have the right role, title or compensation
  • organizational changes in a company initiated by the CEO that leaves somebody in the company being unhappy
  • different risk expectations founders have with each other: Raise more vs. raise less, engage in M&A vs. fund raise, grow faster with higher burn or cut costs and focus on profitability, etc.

In nearly 20 years of sitting on boards I have seen:

  • Founders trying to fire other co-founders
  • Companies revolting against the founder & CEO and asking for the board’s help
  • Founders physically threatening other co-founders or employees
  • Substance abuse
  • Major problems with depression and dysfunction at the executive level

Of course I’m not saying most founders have problems — I’m just pointing out that when you’re involved with scores of companies you see every kind of human behavior. But importantly non-founders who are often major contributors to the success of a company and would be interested to know that it’s not unheard of to see founders

  • Ask for major top-ups of their personal equity while not having commensurate top-ups for rank-and-file executives
  • Major squandering of company resources on travel & entertainment that isn’t in support of company goals
  • Profligate spending with limited regard for future fund raising that causes major dilution when funds are raised at the last minute

I point out the worst that I’ve seen in 20 years for a reason. Boards are not appointed to be founder-friendly lapdogs for the 1–3 founders who start companies and usually own the largest equity positions in the company. Boards are fiduciaries to represent the interest of all shareholders — big and small — and this includes employees who bet with their careers and with reduced pay in order to have equity they hope will be valuable.

To be clear — most founders I’ve ever worked with have been super ethical, very conscientious, not overly greedy and take their personal responsibilities very seriously. I also want to be clear that some investor board members can act like total jerks at times.

I am usually loyal to the founders I’ve backed above all else. I consider myself founder friendly. I will work evenings or weekends to help a founder in need. I prefer to leave the passionate, mission-driven founder in charge for as long as is possible. If the founder has limitations in running a company I will normally try any other option other than removing them from the CEO role. And if I believe they aren’t the best suited person to run the company I will always sit down and walk the founder through why I believe the company might be better suited with somebody else at the helm. I will see if I can get him or her to see this herself.

But in the end — a board’s ultimate loyalty must be to the company and all of its shareholders. The board is there to represent the interests of all shareholders & creditors and to put the interests of the company before their own interests. At times being “founder friendly” can mean protecting many founders from a CEO or it can even mean providing tough guardrails to protect a CEO’s own personal interests from his or her worst instincts. I saw this first hand with a CEO who tried to get into numerous company-betting lawsuits that we knew weren’t in his best interest.

What prompted this post? It has nothing to do with any individual company. I have been meaning to write this for a while as I’ve noticed that much of my board time is involved in trying to be an independent referee for founders who themselves are trying to resolve their own conflicts. Those seldom get reported.

The rise of crowd funding saw the first wave of founders gleeful that they could raise capital without having to deal with terrible VCs. I think we’re far enough into this trend to see that having strong board members — including VCs — is a healthy alternative to party-rounds of crowd funding with no oversight.

Lately I’ve noticed that there is a second wave that many fantasize about a world in which ICOs drive all funding and founders and employees never have to deal with venture capitalists. ICOs certainly have a place in startup financing.

But having a board of directors and having some of those board members be large financial owners in the business with shared corporate governance forces a tension in businesses that I believe is healthy. This is similar to the role that public markets play in helping shape publicly traded companies. At times I’m sure it feels terrible to be a publicly traded company but ultimately I believe the sunshine of publicly reported numbers produces better results. So, too, a healthy and skeptical board.

Photo credit: jpeepz via VisualHunt / CC BY-NC

What Do Boards Actually Do? was originally published in Both Sides of the Table on Medium, where people are continuing the conversation by highlighting and responding to this story.

Founder Friendly

AVC - Musings of a VC in NYC -

Long time VC watcher, writer, and analyst Dan Primack suggested on Friday that the days of VCs trying to out “founder friendly” each other are now over.

It is an interesting observation and was worthy of a reply. The VC industry is highly competitive for the best opportunities and we certainly do try to ingratiate ourselves and our firms to the entrepreneurs who will decide who gets to invest in their companies and who does not. Being “founder friendly” is an important way to do that.

But there is another important participant in the VC/entrepreneur relationship and that is the Company the entrepreneur creates and all of it’s stakeholders; the employees, the customers, the suppliers, and even the community around the Company.

Having worked with entrepreneurs for over thirty years now, I have developed tremendous admiration for what they do and for the Companies they create. Entrepreneurs are a very special breed of people.

But there are times when interests diverge and what is best for the Company and it’s stakeholders may not be what an entrepreneur perceives to be in their own best interest. This creates a conflict situation and VCs are often caught in the middle of it.

I’ve been there many times and my mantra in those moments is “what is best for the Company?”. It has to be that way and, many times, when it is all over and done, the founder realized it was in fact best for them too.

Of course, reasonable people will disagree about what is best for a Company. That is what Boards are for. They are the bodies made up of reasonable people who can and should debate these issues and find resolution and make the hard decisions.

I reject the notion that being led by its founder is always what is best for a Company. It is often so, but certainly not always so.

Orthodoxy in thinking and believing is quite troublesome. There is no one way to do things and no single truth. You have to figure things out all the time based on facts and circumstances, based on a combination of experience and knowledge. If you do that well, you will get a lot right but never everything right.

I have heard from quite a few founders that they read the book Hatching Twitter and came away thinking that they would not want to work with me. That sucks for me but I don’t regret anything I did or said in the events that were described in that book.

You must try to make the right decisions for what is best for the Company and if that means being labeled unfriendly to founders, so be it.


Albert Wenger — August 12, 2017
Preparing for Superintelligence: Living the Values of Humanism Today

A Public Record

AVC - Musings of a VC in NYC -

AVC has been going on for almost 14 years now. I write every day, mostly about tech and investing in startups and observations about entrepreneurs and entrepreneurship.

WordPress says I have posted 7,622 times. That is more than once a day but that is because I used to post multiple times a day. Now I can barely find the time to write once a day.

Anyway, posting your thoughts and investment ideas every day creates a public record.

That can be bad when you are consistently wrong about something, like I have been about Apple since Steve Jobs left the company.

But all in all, I would not have it any other way.

A few days ago, Founder Playbook posted a timeline of my writing on Bitcoin and Blockchain, stating that “Since 2011, Fred has been bullish, yet critical, on the crypto market.”

I have been a believer in Bitcoin, Blockchain, and Crypto since 2011 and my confidence in this macro investment thesis gets stronger every day.

And I will continue to critique the sector, calling it out when I see things like greed, infighting, or other issues that get in the way of its collective success.

One could do a similar lookback on my roughly decade long obsession with social media that led me to blogging and ended around the time I fell for crypto.

I tend to get obsessed about one thing and write a lot about it. Which creates a public record. You can’t hide from that, but then again blogging is the opposite of hiding.


Albert Wenger — August 6, 2017
The Fallacy of Biological Determinism

Greed Isn’t Good

AVC - Musings of a VC in NYC -

The famous Gordon Gekko line that “greed is good” is bandied about quite often to explain why capitalism, and the pursuit of riches, is a positive thing for the economy, society, and the world at large.

Greed is not good. There is a fine line between the profit motive and greed.

I am a firm believer in the profit motive. It drives many of us to work hard, make new things that can move the world forward, and better our lives and the lives of our children, and others, through philanthropy.

But when the profit motive is taken to excess and you enter into the territory of greed, things go bad quickly.

We have seen this in the tech sector in many places, we have seen it in wall street, in real estate, and elsewhere. And we certainly are seeing it crop up in the crypto sector as well, particularly recently.

I like the concept of checks and balances. It is important to make sure to stay on the right side of the line between what is reasonable and what is excessive. Surrounding yourself with the right people, who have been around this issue a lot, can help a lot.

There are a lot of temptations out there when a lot of money is sloshing around. It is good to resist them.


Albert Wenger — August 6, 2017
The Fallacy of Biological Determinism

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