A friend of mine recently asked me a straightforward question: “After 4 years as a VC, knowing what you know now, what fundamental ideas do youhave for guys like me who are growing venture-backed corporations?” It got me thinking about what I’ve learned being on the other side of the fence – and though I do not profess to be an professional on how to be the best entrepreneur, I believed my personal experiences may possibly aid some founders out in the trenches nowadays.
1) Keep your alternatives open. The smartest second- and third-time entrepreneurs I see raise capital in a extremely focused and efficient manner. They preserve alternative value at every single stage of the company’s growth and make conscious decisions about how to proceed in every funding round. I learned this the difficult way in my first company, exactly where we raised capital at a $ 250M valuation and essentially priced ourselves out of an desirable M&A opportunity. I can’t tell you how many companies I see that would be terrific $ 50M-100M acquisition targets, but shed that alternative because they’ve raised too considerably capital.
2) Employ the finest talent you can locate. I truly can’t say enough about this. The bottom line is A players may possibly price 50% much more than B players, but will add 10X the value. Talent wins. Be proactive and constantly on the lookout for impact players.
3) Take advantage of the moment, and run like hell. Wonderful entrepreneurs don’t wait. When they’re onto some thing, they move aggressively, and don’t spend time thinking about Plan B. They realize they have a window of chance, and they jump by way of it. I meet with a lot of organizations who are the number two or 3 player in their space, and the CEO frequently cannot figure out why the number one player is kicking his/her butt. If I’m performing my job as a VC, I will have also met with the number one player. The leader is aggressive, maniacally focused on growth, moving rapidly, and delivering for consumers. The followers are frequently bogged down by customer/item/board/funding troubles. In short, #1 sees speed bumps and jumps them, whereas #two and #3 see roadblocks and devote time trying to figure out how to go about them.
four) Operate with fantastic investors. This doesn’t necessarily mean the headline-grabbing VCs you read about on TechCrunch. Ever heard of Dave Strohm, David Cowan, or Jim Goetz? They’re three of the most profitable early-stage VCs you’ll ever meet, but you won’t generally read about them on nowadays’s hot tech gossip blog. Don’t get caught up in the hype. Concentrate on VCs who have built winners in your space and reference nicely with entrepreneurs and CEOs. They’ll make a distinction.
5) Play bigger than you are. Develop a market place impression that is better than reality. This has to be done cautiously – history is littered with businesses that failed to live up to the hype – but carried out nicely it can actually increase your company’s prospects. Artfully tooting your personal horn is part advertising, element PR, and component an aggressive method to today’s social platforms. Completed appropriate, Twitter, LinkedIn, and Facebook can serve as potent platforms to amplify you company’s position. The key is to not just talk about how incredible your company is, but to show how you are succeeding with important consumers, company milestones, analyst and media coverage, and crucial new hires. Examples of firms that have done a wonderful job building this sort of buzz incorporate Buddy Media, Yammer, Zuora, Betterworks, Square, and Appirio (my firm is an investor in Buddy Media, Square, and Appirio).
6) Uncover and leverage mentors. There are a lot of remarkable CEOs in Silicon Valley who really like nothing at all far more than to aid young entrepreneurs create great organizations – you just have to ask for their support. It’s one of the truly distinctive aspects of Silicon Valley. Ask your investors for introductions. And don’t just reach out to a mentor in instances of crisis construct an ongoing relationship with him or her. You’ll be amazed and the nuggets of wisdom you pick up from CEOs who have “been there, carried out that.”
7) Be honest and transparent. The most productive entrepreneurs I know are transparent with their team and with their board. They remain in standard communication with their board members and treat board meetings as an opportunity to have a meaningful discussion around core issues – not as a sales pitch. Your board and investors are “in the boat” with you, and totally invested in helping you build a winning firm. If you have to constantly “sell” your business to your board members, you’ve got the wrong board members. Brad Feld and Fred Wilson have covered the topic of board meetings well.
Get pleasure from the ride. I began my 1st business when I was 25, and by the time I was 30 we had raised a lot more than $ 100M and hired 400 employees. It was great, but I was immensely stressed. The second time around, I surrounded myself with much better talent, raised much less capital, and had a lot more enjoyable (and a far better outcome). Great entrepreneurs have that exclusive DNA that makes them relentlessly focused on constructing one thing great, and it’s a 24 thought method. However, the difference I see in between very first-time entrepreneurs and second-time entrepreneurs is that veterans are normally enjoying the ride. They’ve figured out how to make time to have fun, invest time with family and buddies, and nevertheless develop a great company.
I look forward to hearing from entrepreneurs in the trenches. What did I miss? What kind of assistance have you valued from your mentors and investors?
Jeff Richards is a partner with venture capital firm GGV Capital and the former co-founder of two firms, R4GS and Quantum Shift. Follow Jeff on Twitter at @jrichlive.
Filed under: Entrepreneur Corner, VentureBeat 
