Category

Entrepreneurship

Sometimes, There Is No Lesson To Be Learned

Sometimes, There Is No Lesson To Be Learned We had a very unusual employee situation this week at Return Path.  A brand new senior executive we brought in to the company to be our first ever head of HR and Organization Development resigned very abruptly after only a few weeks on the job, citing a complete change of heart about her career direction and moving on to a government position in economic and community development.  Unfortunately, the person gave no notice and provided no assistance with transition, and resigned by cell phone.  What a disappointment, especially coming from an HR professional! After getting over my disbelief/irritation/rage (not easy, not a small amount), after communicating this difficult message to the company,…

Sometimes It's Worth Travelling 5,000 Miles for a 5 Minute Meeting

Sometimes It’s Worth Travelling 5,000 Miles for a 5 Minute Meeting I re-learned this lesson shortly before the holidays.  We’re negotiating a big deal with a company out on the west coast, and we were at a tense and critical spot in the negotiations.  I knew that the only way to move the deal forward to a handshake and a term sheet was to meet face to face with the decision makers on the other side of the table, in person.  So I got on a plane.  It wasn’t my first choice of activities, and although I was able to work a couple of other meetings into the trip, the trip was a long way to go for a really…

How to Negotiate a Term Sheet with a VC, Part III

How to Negotiate a Term Sheet with a VC, Part III Brad has kicked off his blogging year with a a good new post on VC valuations.  It’s along the lines of the ones he, Fred, and I have written over the past six months and has the wonderful line in it: If you are negotiating a deal and an investor is digging his or her feet in on a provision that doesn’t affect the economics or control, they are probably blowing smoke, rather than elucidating substance. Happy New Year!

How to Negotiate a Term Sheet with a VC, Part II

How to Negotiate a Term Sheet with a VC, Part II The original posting (probably one of my top two or three in terms of comments and trackbacks) talked about HOW to negotiate a term sheet with a VC.  I just received a question from a reader today about WHEN to start looking for VC money.  The answer, of course, depends on your stage of business. The general rule is that the best time to start looking for money is when you don’t need it — but not so early that a potential investor can watch your business closely for too long a period of time before the deal (since all startups have hiccups along the way).  If you’re looking…

The Gift of Insight

The Gift of Insight Jonathan Schwartz has a great post entitled “Every Customer Visit is a Lesson.” It’s so true…if you want to give yourself a gift this holiday season, give yourself the gift of insight and spend some time in the market with a few of your top customers or prospects.  I’ve always found that to be one of the most valuable ways to shape the business, both strategically and operationally. One of the most vivid memories I have to illustrate this concept is a meeting that I had with Crate and Barrel, a prospect, in the very early days of Return Path, back in 2000 or 2001.  I went in with my colleague Sophie Miller, and with a…

The Hiring Challenge

The Hiring Challenge   Fred had a great posting a couple weeks back called The Talent Economy.  In it, he writes: The CEOs who survived the downturn with their companies intact proved that they were tenacious, creative, hard nosed, and financially savvy. Now they are waking up to find out that the game has changed. They have to start focusing on the people side of the business a lot more. Hiring, managing, and retaining the talent is back at the top of the priority list. Retaining good people has always been at the top of my list, even in the dark days.  But hiring and managing in an environment that’s once-stagnant-now-growing presents some real challenges.  Many of these aren’t unique…

Being the Client

Being the Client My friend and colleague Sophie Miller, a long-time sales executive in the direct marketing industry, once said, "In my next life, I want to come back as a client."  She didn’t mean it this way (I think she meant it as "I want to be in the driver’s seat next time ’round"), but this is great advice for any member of an entrepreneurial team in a software or services business that serves other businesses.  The good news is, it doesn’t require the afterlife to achieve it! Mariquita and I have done some work in our spare time the past two years for two different organizations to help them out with their technology.  One is our golf course,…

Why Entrepreneurship is Like Windows

Why Entrepreneurship is Like Windows My family and I had a great and very relaxing Thanksgiving holiday, and I hope you did as well.  I always enjoy the four-day weekend — it’s one of the few times during the year where no one (outside of retail) is working, so I always get to relax and take some mental time away from work.  It’s often said that no matter how many hours a day an entrepreneur is in the office, he or she is always working mentally.  It occurred to me this past weekend that being an entrepreneur is a lot like Windows in this way: Usually, at night, you’re in Screen Saver mode.  One little jiggle of the mouse, and…

Reverse Engineering Venture Economics

Reverse Engineering Venture Economics Most entrepreneurs don’t really understand how their VC investors actually make money, so I thought I’d take a shot at explaining it in general terms. Let’s say a venture firm raises $100 million from a series of what they call Limited Partners, or LPs.  LPs can be anything from diversified institutional investors like pension funds or banks to high net worth individuals.  The partners in the venture firm, or General Partners (GPs) typically derive money from two sources. First, they receive a small percentage of their fund as an annual management fee to pay basic operating expenses.  These fees range in size, but a typical one is 2% per year.  So on the $100 million fund,…

We Did What?

We Did What? Newsgator founder Greg Reinacker has a pricelss posting about the first time an entrepreneur discovers that something happened in his company that he didn’t know about. An absolute gem.