The Startup Solution

Mastering cold emails is a superpower—one that can unlock dream investors, top-tier hires, and world-class mentors. The most successful founders craft messages that break through the noise and create opportunities. In this episode, Heidi shares the proven strategies she teaches at the Stanford Graduate School of Business to help you master the art of impactful outreach.  More information: https://www.threshold.vc/podcast/the-art-of-the-cold-email

If you’re considering an earnout, you should know exactly what is involved to set expectations – and to give yourself the highest chance of it amounting to something. Heidi presents recent market data along with her firsthand experience to help you understand why earnouts are so challenging. More information: https://www.threshold.vc/podcast/the-case-of-the-elusive-earnout

Successful entrepreneurs seek out mentors to positively impact their careers. But how do they find a mentor, initiate contact, and build a relationship? As an experienced mentor and mentee, Heidi believes all these questions can be answered by following her tips on becoming a great mentee.   More Information: https://www.threshold.vc/podcast/how-to-be-a-great-mentee   Further Reading:  I mentioned a bunch of organizations and resources in this episode, so here are the links to them: Fortune Brainstorm and other conferences: https://fortune.com/conferences TechCrunch Disrupt and other events: https://techcrunch.com/events Meetup Entrepreneurship groups: https://www.meetup.com/topics/entrepreneurship Startup Grind: https://about.startupgrind.com Founder Institute: https://fi.co Indie Hackers: https://www.indiehackers.com LinkedIn groups for entrepreneurs: https://www.linkedin.com/pulse/16-linkedin-groups-entrepreneurs-gs-kumar-job-search-trainer Techstars: https://www.techstars.com/communities Founders Network: https://foundersnetwork.com Reddit entrepreneurs subgroups: https://startupsavant.com/startup-center/best-subreddits-for-entrepreneurs and https://startupsavant.com/startup-center/best-subreddits-for-entrepreneurs And finally, here are first-person narratives on learning how to be interested, not interesting. There are similarities – but there’s something to learn in each one of them: https://www.jodymichael.com/blog/be-interested-not-interesting https://tybennett.com/be-interested-not-interesting https://www.jackysherman.com/networking-the-art-of-being-interested-not-interesting https://sunwords.com/2024/01/28/dont-be-interesting-be-interested

All entrepreneurs should understand what venture debt is so they can make an informed decision to take it or not. Heidi poses a series of questions and scenarios to help founders know whether it’s a good option for their company. And if it is, how to set it up and use it.  More Information: https://www.threshold.vc/podcast/the-case-of-the-venture-debt-dilemma Further Reading: As I mentioned in the episode, General Catalyst has an interesting offering around a financing model for growth equity that is a hybrid of debt and equity: https://www.generalcatalyst.com/stories/the-unbundling-of-growth-equity Also, as mentioned, the next version of the SAFE has arrived in the form of a SAFERloan agreement, which allows for some repayment instead of conversion: https://www.liquiditygroup.com/resource-funding/what-is-the-safer-agreement Here’s a solid primer on debt covenants:https://www.lightercapital.com/blog/what-are-debt-covenants-on-a-loan#:~:text=A%20debt%20covenant%20lays%20out,more%20specific%20and%20complex%20requirements Finally, one thing I didn’t cover in the episode but is relevant to the decision-making about debt is that the lender may ask you to move all your banking business to their bank. And that can prove disastrous in situations like what happened to SVB. Here’s a great piece on that danger: https://www.linkedin.com/pulse/wake-svbs-collapse-some-tech-founders-turn-against-venture-tanya-dua

Many entrepreneurs start companies to solve a big problem or apply innovative technology, or both.  But when they fail, it’s typically the result of a business issue. Heidi has observed that founders usually run out of money because they didn’t pay close enough attention to running the company. Here, she shares practical advice to help entrepreneurs become great at business.  More information: https://www.threshold.vc/podcast/the-best-entrepreneurs-are-great-at-business

 When the world is uncertain, it is especially challenging for an entrepreneur to steer their company forward. Heidi’s six-word operating manual helps founders face the unknown and lead. Caution: Heidi’s operating manual may sound simple, but executing it takes grit and leadership. More information: https://www.threshold.vc/podcast/six-word-operating-manual-for-entrepreneurs Further reading: No additional reading for this episode, but as promised, here’s the link to the Etsy shop that sells the bracelets. You do have to specify to the shop owner what you want the bracelets to say! https://www.etsy.com/listing/575211134/personalised-stamped-bar-bracelet-on?click_key=1ae487b1f6385e2ed98e175cf738ae2369e5fbbe%3A575211134&click_sum=eefd3991&ref=nla_rv-1&frs=1&sts=1 

Shareholder voting rights are an essential element of the many crucial decisions made in a company. For example, they may come into play during a fundraise or M&A. In this episode, Heidi explains what shareholder voting rights are so you can be well-informed and avoid messy situations in the future. For more information: https://threshold.vc/podcast/the-case-of-the-shareholder-shenanigans/ Further reading: For those of you who think shareholder shenanigans only happen in small companies, Joy’s case is similar to the HP case of many years ago, fascinating reading for those who like Succession and boardroom drama: https://www.zdnet.com/article/hp-directors-slam-walter-hewlett/ Every entrepreneur should understand the impact stacked preferences may have on governance, board votes, and shareholder votes. This article does a great job of laying those out: https://thevcfactory.com/liquidation-preference-conflicts-venture-capital/ The Council of Institutional Investors has an interesting piece on dual-class stock: https://www.cii.org/dualclass_stock And for more details on why I think good governance is good for entrepreneurs and their companies, see https://www.threshold.vc/podcast/the-case-of-the-infallible-founder/ 

Heidi Roizen, a renowned networking expert and 'Silicon Valley super connector,' shares her two decades of insights on building a relationship-driven life. She stresses the transformative power of meaningful connections over transactional interactions. Listeners learn practical tips for enhancing their networking skills, the role of emotional intelligence in venture capital, and how controlled randomness can lead to valuable relationships. Additionally, she emphasizes the art of collaborative negotiation, focusing on mutual needs to foster genuine partnerships.

Dive into the intricacies of startup equity as the show unpacks the concept of dilution. Discover how issuing new shares affects ownership percentages for founders. Learn about the different types of funding and the importance of financial literacy. The discussion emphasizes valuing future growth over mere percentage ownership, presenting a strategic perspective on funding dynamics. It's a must-listen for anyone navigating the world of venture capital!

To determine if you should pursue VC dollars to fund your company, you first need to understand how the venture capital model works. Heidi covers the type of businesses and growth potential required for a VC to make an investment, along with the high risk involved in venture capital and an explanation of the power law. More Information: https://threshold.vc/podcast/how-to-think-about-venture-capital Further Reading: I promised a lot of additional reading – so here goes. First off, understanding the VC power law is fundamental to understanding the VC business model. Here’s a post about it:  https://x.com/speechu/status/1083921878786310144   And a whole book abot it: https://www.amazon.com/Power-Law-Venture-Capital-Disruption/dp/0241356520 The topic of whether venture capital is the right way to fund your business is critically important. Here’s a post by VC Erik Berg that nicely captures many of the key points to consider: https://abergseyeview.com/is-venture-capital-funding-right-for-my-busines  Here’s a fantastic article by the New York Times about why some entrepreneurs didn’t take VC:  https://www.nytimes.com/2019/01/11/technology/start-ups-rejecting-venture-capital.html And here’s a post by entrepreneur Anthony Collias about the pros and cons of taking that venture investment given his experience as an entrepreneur: https://blog.joinodin.com/p/vc-steroids A bit dramatic, but the gist of it isn’t wrong – The warning label that should come with VC money: https://hackernoon.com/the-warning-label-that-should-come-with-venture-capital-9432500b7195 And for those of you who like stats: Here are some interesting stats on startup financing from Fundera: https://www.fundera.com/resources/startup-funding-statistics A great infographic by Entreprener on where startup financing comes from:  https://www.entrepreneur.com/money-finance/where-startup-funding-really-comes-from-infographic/230011 And venture investing data from Crunchbas: https://news.crunchbase.com/venture/global-funding-data-analysis-ai-eoy-2023/  And more data from the National Venture Capital Association: https://nvca.org/wp-content/uploads/2024/05/2024-NVCA-Yearbook.pdf As for startup failure rate,  there’s this piece from Harvard Law School: https://corpgov.law.harvard.edu/2023/09/29/startup-failure/ Here’s the story about the Wordle creator and his sale to the New York Times: https://corpgov.law.harvard.edu/2023/09/29/startup-failure/ The Benchmark/eBay story is summarized here:  https://medium.com/venture-capital-research/8-vc-insights-from-the-genesis-of-benchmark-capital-8915d4fe6f39 And last but not least, my Alec Baldwin quote comes from this famous scene in Glengarry Glen Ross:  https://www.youtube.com/watch?v=Q4PE2hSqVnk