Issue #4: Even as you hit your key milestones and carefully manage your runway, events outside your control constantly move the goalposts.
Choose Your Venture Investors Wisely
Issue #3: Choosing your venture investors is one of the most important decisions you’ll make as a founder. Relationships last for years. Don’t settle.
Now You Know That Private Company Valuations Are Arbitrary
The recent WeWork IPO debacle is certainly a great demonstration of how unreliable and arbitrary private company valuations can be. Six weeks ago WeWork expected to go public at a valuation of as much as $60 billion. Now they are on the edge of bankruptcy and hoping for a lifeline at a valuation of $8 […]
Gross Margin Is Sexy Again
What do WeWork, Uber and Blue Apron all have in common? Two things actually. First, their investors have taken a beating in the past year. WeWork just pulled it’s IPO, and might become the fastest company to ever fall from a $47 billion valuation to zero. Uber, which went public in May at $45 a […]
Almost Worthless: What Can We Learn From A 99.7 Percent Writeoff
When I see 99% destruction in value in a once high-flying startup, there must be some useful lessons in there somewhere. I know I’m a bit late on the Tumblr story, but I was on vacation last week! It’s hard to keep up with this level of destruction of shareholder value when you’re off the […]
Valuation Makes The Headlines, But Liquidation Preferences Allocate The Cash
You’ve heard this story before. A startup raises a lot of cash from venture investors over several rounds of fundraising. The company attains the mythical Unicorn status. The billion-dollar valuation. You see pictures of the founders with big confident smiles as if victory is assured. Then the company stumbles, growth slows, valuations fall. And yet, […]