Category Archives: Entrepreneurship

What should a series A funding process look like? Step 4: Negotiations and Legal Discussion

Please read series A funding plan and strategy, the first step of the process – the introduction to an investor, the second step – first meeting and follow up, step 3 – present to the partnership and now onto Step 4 – Negotiations and Legal Discussion.

Congratulations, you have achieved what nearly 95% of startups (anecdotal evidence) wont end up doing – getting to a “term sheet” discussion with an institutional investor. After your first VC meeting, usually this step happens about 3-4 weeks later in India and a week or two in the US.

Typically most VC’s and their associate / principal will make a trip to your office between this period. They will want to meet the team, check out your offices and make sure that you are a “real company”. My personal experience shows that you should use your “lack of funds and frugality” to your advantage. Dont try and have them meet you at someone else’s office (has happened once) or try and spruce up your office (keep it clean, but dont go overboard).

Question I get is usually “I am working out of my home / garage”, should I invite them there? Let the investor know that you work out of home and they will usually ask you what your plans are post funding. Most will decline to come to your home, but if you wish you can ask them to meet at a coffee shop near your home / garage.

Most investors like the frugal quotient in startup founders.That shows that you focus on hiring the right folks and building the right product instead of “AC offices” and plush “Aeron Chairs“.

Your investor champion will typically call you with a short message in which she will say the firm is pretty excited about your opportunity and would like to offer a term sheet. She will invite you for a discussion on valuation and quantum of funds, at their office typically, with their associate and/or principal – let me call them “investment professional” or IvP from now on.

The IvP would have done quite a bit of work by this time to review your financial projections and assumptions. They will have also called a few potential customers, a few existing customers, some industry experts and a few of your friends and past acquaintances (yes, this happens in US and India) to get more information about you, the market, customers and other trends.

The negotiations are never one meeting. It will take typically 2-3 (or more) weeks to discuss between you, lawyers at both parties and the IvP. In your first meeting with the investors, they should state clearly why they are investing in your company – we like the market, we think the team is good, we think you can make it big, etc. They should also give you feedback on what needs work – you need to revisit your assumptions on hiring costs, the revenue projections are aggressive, your channel strategy is something they can help with etc.

Then they will give you two numbers of your term sheet – the valuation and the investment. They will say something to the effect “We are willing to invest $1 Million at a pre-money valuation of $3 Million”. Or they might say “We are looking to invest $1 Million for 40% of your company”.

You should be aware of these terms: pre-money valuation, investment quantum and post-money valuation, ownership %.

post-money valuation = pre-money valuation + investment

ownership % (for money invested) = investment / post money valuation – this is also the amount you “dilute“.

So in example 1: If they are investing $1MM at pre-money of $3MM, then your post money Valuation is $4 MM. So the company is valued at $4MM after funding. Since they put $1 MM, they will get 1/4 or 25% of the company.

In example 2: They are investing $1MM and are looking for 40% of the company. Which means the post money valuation is $2.5M and the pre-money is $1.5 MM.

How they come up with these valuation numbers is a series of posts in itself, but suffice to say its part art, part science and largely a function of market conditions (supply / demand). If you have multiple investors competing for your deal, you might get a higher valuation if your company is *hot*. If the investors you are talking to are the only ones who are still interested, and you need the money, be prepared to dilute more.

After this meeting they will let you, the IvP, their lawyers and your lawyers hammer out the other “terms”. The term sheet (pdf file) will have many other conditions and clauses. I wont cover them all, they require a series of posts in themselves and enough people have written about them.

The most important terms are: liquidation preferences, anti-dilution, full ratchet, drag-along, tag-along (called co-sale in the US), ROFR (Right of first refusal) and board representation.

Keep in mind that your company will pay for your legal fees, and also the investors lawyers. You need two sets of lawyers so each party can protect their interests.

Most investors will say most of these terms are non-negotiable, but depending on the deal they will negotiate with you – through the lawyers, obviously. Realize that the lawyers really are the go-between. They wont do or ask for anything the investor really does not want. So, its pointless blaming the lawyers (they are a few errant ones, but they are largely service providers who do as they are told).

What might go wrong and how to fix it?

1. You dont like the valuation or you would like more money (investment amount). That’s negotiable and depends on the deal dynamic. Some investors low-ball and others will give you “fair valuation” Its rare that an investor will over-bid – (A16Z is an exception). Let them know your expectations and be prepared to defend why you think your valuation metric is the right one.

2. They term sheet is loaded with investor-friendly (anti-founder) clauses. Some of those are negotiable as well. I would advice you to pick your battles. Choose 2-3 items you consider very important to you and only negotiate those. The investors typically will do that as well. Most likely you’ll meet in the middle.

3. The lawyers take up endless time splitting hairs. In India, legal advisers will work on a fixed fee for the transaction model, but in the US that’s rare. So in India the incentive by the lawyer is to protect the parties interests but spend as little time as possible so they can bill at a higher rate. In the US though, the incentive is to take the “right amount of time”. Be aware though, that lawyers only do as they are told. Either your investor is telling them some terms are non-negotiable or your are telling your lawyer some issues cannot be compromised. Either ways, get on the call, and fix things proactively.

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What should a series A funding process look like? Step 3: presenting to the partnership

You have a series A funding plan and strategy, the first step of the process, the introduction to an investor, the second step the first meeting and follow up, now its step 3 is to present to the partnership.

Most times this step is hard to get to. Getting to this step means the key partner who is “sponsoring your startup” believes in it enough to get your company in front of the other partners. Most investor firms have 3-5 partners who (should) have the same # of companies they fund and same amount of funds to deploy. So if the fund is $500 Million and has 5 partners, then each person has to deploy $100 Million to get best returns. The partner sponsoring your company has to convince other partners why he’e excited about investing in your company.

In the US I have been asked to present to the entire partnership 2 times (they will then discuss it between closed doors among themselves), but in India, the way it works is that the partner presents your case to her partnership. So, instead of you telling the story about your company, you have to arm the partner with the best story so she can convince others in the partnership. Other partners can say no, but that’s rare is my experience. Usually your champion has been sharing details about your company with others early in the cycle so they are typically aware of the company, and now are trying to look at the deal in its entirety and look for any last minute reasons to say no.

To get to this point, though, is a series of multiple steps, follow-ups and constant progress updates. There is no “one thing” that you can do to get here. After your first meeting with the investor, follow up on the action items they suggest and ask the right questions of them so you can do the due diligence on them as well.

One of the most important parts (besides following up and providing frequent progress udpdates – weekly) of the process is the type and kind of questions you ask of the investor.

Smart questions and they realize you are trying to evaluate them as much as they are you. No questions and they will think you are a novice.

Here are a few questions to consider, which you can tailor to your situation:

1. How much time do you spend with portfolio companies and how often? Will give you a sense of their involvement. Some investors like to invest and only attend board meetings, whereas others will also provide valuable advice and connections.

2. What are the biggest challenges to scaling our company that you foresee? Will let you know their thinking around amount of money they think you will need eventually.

3. Which of your portfolio company CEO’s can I talk to, so I can learn from their experience? Make sure you also speak to other portfolio companies who they dont mention, so you get a well rounded perspective.

4. Will you be able to lead our round, or will you expect me to find a lead investor? Most firms will lead your round if they are excited, but some seem to prefer to co-invest and let others take the lead. If the firm you are talking to does not lead, then you will have to spend a lot of time trying to get another lead investor.

5. How long will it take from the time your partnership says yes to the time of finishing the paperwork and completing the money transfer? They will mention “on average it take X weeks / months” which will give you a sense of the negotiation process you have to endure.

Typically the partner meetings are on Monday, so if you hear back on Monday or Tuesday all’s good. Later than that means, there are typically more questions that came up, so you things might go sideways for some time.

What might go wrong and how to fix it?

1. Your investors “goes cold” on you after they present to the partnership (happens more often that I’d like). Remember that admin you started building a relationship with in step 1? Leverage her to find a time to speak to your investor – either when she’s on the way to the airport someday or in between meetings.

2. Your investor “needs more time” since they have some concerns. Get the list of specific concerns. Not generic stuff like “we dont like the market”, since nothing’s changed in the market since they started talking to you (assuming its not long). Try and see if those concerns are valid and addressable. If they are not, cut your losses, move on. Keep them informed or progress via a monthly email update, but realize trying to engage again is going to suck up a lot of your time for an unknown outcome.

3. Investor needs “more data“. Understand what data they need and which parts of it falls into the “due diligence” and which parts of it are truly needed to make a decision to offer a term sheet.

4. Investor does not say a firm yes or firm no. This is the biggest problem. Most Indian investors are fairly straightforward and will give you a quick 2 week (from start to finish) no. But the yes might take longer. The trouble is the quicker you push, the more likely you’ll get a no. US investors for most part (institutional) have a hard time saying no. Usually their “yes, but” means not yet. My suggestion is to focus on building your product during this time and get enough other work going on to ensure you dont keep waiting for the phone call from the investor.

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What should a series A funding process look like? Step 2: The first meeting and follow up

Once you have a series A funding plan and strategy and also the first step of the process, the introduction to an investor, the next step is to prepare for the first meeting and follow up.

Since you got an email from the investors admin, I’d recommend meeting investors either on Thursday or Friday.   Typically the admin will give you 30 minutes or 1 hour. Plan to finish presenting your pitch in 1/2 your allocated time to leave room for Q&A and a discussion on next steps. I dont recommend taking anyone else for your initial meeting, since its exploratory for both parties.

Typically the email from the investor will request you to “send me something so I can review”. From my experience its better you dont actually send your pitch deck via email, but your ONE page summary. Include detailed profiles of yourself in that one page (5 sentence per founder, with previous *accomplishments*).

Here’s a money tip: Include a link to your LinkedIn profile (not facebook or twitter please) at the bottom of the email with the attachment to your one page summary. [Side note: Make sure your LinkedIn profile is updated]. Make it easy for them to find out about who they are going to meet with.

Another money tip: When they click on your LinkedIn profile try to have at least 3 “mutual connections” with that investor. That seems to be a magic number (yeah, I know these may be lame tips, but bear with me).

Prepare for the presentation and show up about 5-10 minutes early (not half hour). Try to pitch your deck to 2-3 others in your company and let them ask you multiple questions.

You should have a overview presentation of about 15 (7 if its a 30 min meeting) slides for this meeting. The average person takes about 2-3 minutes per slide (depending on content), so you will have 30 minutes to present.

There are 2 strategies you can adopt on your pitch deck: Either you go deep on content (the slides should speak for themselves) or moderate (you are needed for the slides, else they are “content free”). There are pros and cons to both approach.

Content deep: Usually used by technical founders, these tend to focus on sufficient detail so that the investor gets a handle of the pitch The pros are: even if you suddenly develop cold feet (rare, but hey that happens) the slides convey your message. The cons: What’s the point of having you in the presentation?

Content moderate: My preferred approach. As you might have heard, investors are people, who invest in people. The pros are: You are in control of the presentation and are able to add “color commentary and provide lots of stories”. The cons: You might forget some very important points you wanted to cover, but those should have been on your pitch deck in the first place.

Here is a possible list of slides and a suggested order (tweak as appropriate).

1. Your background and your co founders: Try to answer these questions in this slide: Are you credible? What makes you unique to solve the problem you are going to solve?

Money tip: Dont use your background slide to only talk about yourself. Use your background to create “connections” with the investors. If you have (smartly) done some background, you will figure out some way to be a Kevin Bacon. Example: I know you invested in <portfolio company> and we recently hired a UX designer from there.

2. The problem you are trying to solve: Stick to 3 real use cases and make sure you have more detailed knowledge of your customer / user. Tell multiple stories here and use 5 minutes of your time on this slide. Why? Most people believe if you understand the problem clearly, you likely have a solution for it.

3. What is your traction? Show them that you are solving the problem already and address the question: So what if this is a problem? Are people buying? Are users signing up?

4. Your estimate of the market – preferably top-down and bottom up. Try to address the skepticism – is this worth the investors time? Money tip: If you market is < $1 Billion for US and < $250 Million in India, dont go to institutional investors. Dont waste your time, because it wont excite them. If you dont know the size of the market, dont make wild-ass guesses. Just say you are doing market analysis in your first meeting. It makes your pitch more credible. Ask the investor for their approach towards market sizing.

5. Your product: Address the question: Do you understand how the problem can be uniquely solved by you?

6. What’s unique about the way you solved the problem? Address the question: Do you have sustainable advantage or unfair competitive advantage over others.This might also be a place to address any unique technology challenges you have overcome.

7. How are you going to acquire customers? What approaches might help you best to acquire customers in a scalable fashion? What distribution mechanisms will you use to get multiple customers in very short time?

8. Competitive landscape. The best way to show this is a two-by-two matrix. Be real.

— If this is a 30 min meeting, you should be done by now.

9. How do you plan to make money (if you dont have financials) Or how are you making money right now?

10. The ask: How much money are you looking to raise and what are you going to do with that money?


Slides 11-15 are for your product screen shots, since SNAFU’s happen all the time and you wont get Internet connectivity (or it will be a really slow connection), when you need it.

Use the last few minutes for Q&A and follow up. Have at least 3 questions about how they can help you get further and what improvements would they suggest to your product.

The easy follow-up asks: Ask for introductions to 2-3 of their portfolio companies so you can get a few customers. If you are a consumer internet company, ask them to use the product and let you know their thoughts. Suggest a list of questions they asked that can be the agenda for the next meeting.

Money tip: If you ask “What is the next step”? most will answer “Let me think about this for 2-3 days and get back to you”?. That’s lame.

You should suggest a next step. Examples:

a) Why dont I meet these people you recommend and lets chat on 29th August?.

b) Why dont you come by our office and meet the rest of the team so you get a feel for our culture?

What might go wrong and how to fix it?

1. You turn up really late for the presentation or you get lost trying to find the office. Apologize, try to use the shortened time, but most of all, pray that their previous meeting overran.

2. The investor turns up late for your meeting. If this is your top tier investor, you have not much option, but I know most of them will give you appropriate time if they are late. You can also have 2-3 more “asks” if they are late. If this is not your top investor, be courteous, shorten your pitch, and move on. Life’s too short for people who dont value your time.

3. Investor asks you a ton of questions for which you were either not prepared or do not have answers for. Be honest, say you dont know (its okay to not know) and suggest a follow up on your part to prepare and send him answers and meet again when you are ready.

4. Your “live demo” does not work. Go back and read what slides 11-15 are for.

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What should a series A funding process look like? Step 1: The introduction

Once you have a series A funding plan and strategy the next step is to have a defined process to make it easy to scale.

Most developer CEO’s dont quite like the word “process” – which usually means repetitive and bureaucratic. In this post I’ll try and outline how you can use process to scale and not lose your mind when dealing with investors.

There are 5 important parts of a series A funding process:

1. The introduction and initial call. Since your plan has already given you a spreadsheet with the target investors and possible connections, this step in the process is to either email (or call as appropriate) your connections with a request to introduce you to the investor.

I recommend that you do a quick 15 min brief to your connection about your company so they know what your company is doing and why the connection you are requesting is a good fit as an investor. I would recommend a short 40-100 word email with your elevator pitch, which can be forwarded to their investor connection.

I would recommend not more than 10 firms in your list (5-7 is ideal). 3 of them which are your top targets, 3 that have not an investment in the space, but have expressed an interest, and finally 4 who are likely to be move slowly.

Usually in India, most investors respond in 3 days and in the US, the top investors in 1-2 days after you have been introduced via a warm contact. Of course there are exceptions, and it might take longer. If they respond faster, you have a connection that’s very highly regarded by the investor.

Ideally you should email all connections in a day or two and get introductions within 3 days from start.

After your connection has sent and email (ideally she has copied you on the introduction), expect a couple of days to get an email back. Usually the response to your email will be an note to you (with their admin copied) to schedule time to meet. Dont ignore the admin, because she will be a big help in steps 3 and 4 when things get slow or responses are delayed.

Elizabeth’s approach was to get meetings to completely book her schedule in 2-3 weeks, which might work for the US, but for India, I’d recommend spacing meetings out a bit so you can a) iterate your deck and positioning based on the feedback you receive, b) get some time to think and follow up with investors and c) give yourself time for traffic and travel (unlike US where most investors in the bay area are in Sand Hill road, in India, they are all over the map).

Spacing things out a bit also ensures you’ll get time to work on the action items they give you. Example: please go meet this person who I know is an expert in the space, or please send an email so I can connect you to a potential customer who is in our portfolio.

Nothing pleases investors more than you taking their advice, acting on it, and showing that you are diligent and value their input. Its the best way to build a relationship.

Setup the follow up meeting, ideally on Wed or Thur – why? Mondays are partner meetings so most people are busy all day. If you meet on Thursday or Friday there’s more chance of your deal being brought to the “partner radar” fresh the next Monday.

What might go wrong and how to fix it?

1. Your connection might not respond to your email. Follow up with a gentle reminder via email (if your connection is a good friend, call her)

2. The connection may take 4-5 days to send your email and may sent it to a influencer (associate) but not a partner. That’s okay, just make sure you meet the associate and try and see if you can get the partner to join – “Hey I met <partner> at <this event> and I’d love to follow up with him on my company”, might work.

3. The connection sends an email but the investor does not respond. Try twitter (most US VC’s are on twitter, but a few Indian VC’s are as well). Best approach is to get a second connection who can also put a word in for you. Calls rarely work if email did not, so try another connection.Try your legal firm’s partner as a person to connect you as well.

4. The investor says they are not investing in the space or they dont like market you are working on. Try and get an alternate investor who they think might be a better fit. “I understand <investor>, would it be possible to suggest someone who might be a fit?”

5. The investor says they are busy for the next few weeks / months (either because of their board meeting schedule or they are raising their own fund). See if you can meet them at the airport when they have a little down time. Dont laugh, this has worked for me several times in SFO. In India, investors attend many events, so suggest you meet there.

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In the next set of posts I will cover the next 4 steps in the process including:

2. The first meeting & followup.

3. The presentation to the “partnership”.

4. The negotiations and legal discussions.

5. The due diligence and transfer of money to the bank.

What does a series A funding strategy and plan look like?

This post is the first in a series that I am planning to do on fund raising. I have successfully raised money 3 times (to a total of $29 Million – series A, B and C) and failed twice (once trying to raise $2 Million series A and second time $3-$5 Million series B).

As a background please read Elizabeth’s great post on “Behind the scenes of a seed round”.

Fund raising is one of the most difficult parts of a founder’s job. Getting money from investors of any type is hard. Dont be fooled by stories of entrepreneurs talking to investors and getting checks in 10 minutes. Those are truly black swan events.

The first thing you have to realize is that you need to develop an comprehensive plan and strategy to raise your series A. Think of it as an effort that’s similar to the launch your product. For purposes of this discussion lets call series A, as your first institutional round. I am also making the assumption that you have a working product, paying customers and are targeting a very large market (>$1 B for US, >$250M in India). If any of those criteria are not met, dont bother trying to raise money in this environment.

What are the 3 most important elements of your funding plan?

1. The pitch deck – a 15 slide PowerPoint presentation which summarizes the market, problem, traction and investment requirements. This is needed only for the face-to-face meetings.

2. The target list of potential investors – a Excel spreadsheet which has investor’s firm, name of partner, list of 2-3 recent investments (in the same general space as yours), email addresses, phone numbers, admin assistant’s name & email address, investor connection (people who can give you warm introductions to the investors), status and notes fields. You could use a CRM tool like Zoho if you like, but its overkill for this purpose is what my experience tells me.

3. An email introduction (40 – 100 words) and a one page summary. A simple text file with no images or graphs (something that the investor can read on their mobile phone (most have blackberry, although that’s changing). This can be sent to your connections to introduce you to investors or directly to known investors.

What should your strategy be?

1. Who should you target by role?: Investment firms have partners (decision makers) and associate / principals (decision enablers). Partners make decisions so if you can, get a introduction to a partner. If you cant, its not all doom and gloom, since many partners rely on their associates and principals to source deals for them.

2. Who should you target by investment thesis: Every investment firm has an investment thesis (how they will deploy funds to get best returns for their investors). This should guide you as to whether you’d be a good fit for the firm. Example: An investment firm might say we believe India’s broadband access and huge number of consumers with high disposable incomes is a great target for Indian eCommerce companies. So, they will deploy a certain % of their funds in eCommerce companies. Similar theses exists for big data, SaaS, etc.

Example: if you are an education startup focusing on India, Lightspeed (thanks to their success with TutorVista) should be on the top of your list. If you are a SaaS firm targeting US, Accel (thanks to Freshdesk) should be on your list. If you are a travel technology startup, Helion & Saif (thanks to Make My Trip) should be obvious targets.

A word of caution: If a firm has invested in a company in your sector, they will very likely ask you to speak to the CEO of their portfolio company to perform cursory due diligence. You may decide that company might be competitive and likely to execute your idea better since they have more resources. So proceed with caution and dont reveal any thing during your due diligence that might hurt you later.

Many investors invest in a sector because they “need one of those in their portfolio”. Example: Every firm has a baby products eCommerce company. So, I also recommend the “herd rule”. Which means, you should talk to other investors if your competitor has been funded by your first choice investor.

3. Who should you target by investment stage: Although every Indian investor claims to be sector agnostic and stage agnostic, there are a few early adopter VC’s. If you are the “first” in a new space, then consider an early adopter investor, else any investor who has not made an investment in the sector will suffice.

In a next post I will outline what the series A funding process should look like. This post will include information about whether you should follow a “back-to-back” process, or do a “listen and tweak” process.

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The power of active observation for entrepreneurs

There’s an awesome stand up act that Jerry Seinfeld does in his “I’m telling you for the last time”. In that he tells the audience a secret about men.

The question on many women’s mind is “What are men thinking about?” is his premise. He goes on to say “Let me clue you on to the secret women. Here’s what men are thinking.”


We are just walking around, looking at stuff.

Its pretty funny and mostly true. Its also true of most people, not just men. Most of our “thinking time” is spent thinking about nothing.


That’s such a waste of time.

What I think it really means is its not worth sharing what we are thinking about.

We are “constant dreaming” about mundane useless stuff and our thoughts wander to more useless stuff.

While we go about some daily routines, we are still thinking and less “observing”.

Most successful entrepreneurs I know have a heightened sense of observation.

They watch everything. I mean they observe at least 50-80% more than the average person.

Most non-entrepreneurs people see the same things an entrepreneur does, but they dont observe.

A technique I use is active observation. It is seeing, then asking questions. As you know, questions are the root of solving interesting problems.

To discipline yourself to constantly keep observing, you have to train your mind to look, then ask. Not keep looking and neither keep thinking.

There is a downside to active observation. Its that you are not in the “present”. Critics will point to the mind-rest that your brain needs which helps it recuperate and rejuvenate. They might also say you should go with the flow to generate great results.

I prefer active observation when I am thinking about ideas and problems to come up with which need solving.

P.S. Post a few comments on facebook, I wanted to clarify that active observation is observing then doing. By default I assume most entrepreneurs are doers. Many though confuse doing (action) for progress.

Solve meaningful problems as a startup

Back in the 90’s and better part of last decade, most of the smartest folks from the top colleges would go and work at Wall Street. Lured by high salaries and fat bonus checks, they used their wizardry to create CDO’s, asset backed securities and derivatives to create billions for hedge funds, investment banks and trading desks of large financial organizations.

We all know where that ended up – the subprime mortgage crisis.

We thought there was a turn of events when one of them started to build a meaningful startup.

That prompted Bill Gates to say

“I’d say we’ve moved about 160 IQ points from the hedge fund category to the teaching-many-people-in-a-leveraged-way category. It was a good day his wife let him quit his job”

I get a sense that, “founding an Internet startup” is the new “joining a hedge fund” in the 90’s.

We are getting an amazing number of very smart people who are joining these startups in droves and applying for incubators, accelerators, hackathons and startup weekends.

There is a massive movement of high level IQ points from old-school consulting and “IT services backend for a large Indian outsourcer” to startups. That’s awesome news.

I have attended and judged 3 startup hackathons and prototype creation sessions over the last 1 month. I am absolutely thrilled that there are so many people turning out for these events in India. Over 650 attended the Yahoo Open Hack day. It was amazing to see such a diverse group of young talented developers and programmers solve some very interesting problems.

The part we have to work on is why the brightest minds are solving the most trivial of problems.

Startup IQ
Startup IQ

I think the problem with Indian startups is they think we are in the US.

There are rich people problems (The pictures from my mobile phone dont look good, can we build a “pimp my photo” app”) and there are real world problems (how can I make sure new grads from college learn to develope real apps, so they can get a job and reduce the jobless rate).

My humble request to Indian entrepreneurs is ‘Please dont build any more “I’m bored” apps’.

I am not trivializing the need for “fun” apps.

All I am requesting is that the highest IQ folks should be working on the highest impact problem areas to aid most humankind.

Why I am reducing my face-to-face mentoring & advisory sessions

I have many friends and acquaintances who have been reaching out to get some face time with me for brainstorming and advice. Usually its about their company or their career. I love these sessions and used to keep my 2pm to 3pm slot only for these meetings. It was like an office hours to meet people who reached out and would like to chat and meet.

Lately though, I have been declining those meetings. The issue is time.

I have 4 kids and a patient wife, and I am trying to prioritize family over work or business. This means I have limited time slotted to meet folks outside of the work environment.

Its a lot easier to find time to blog, email, discuss on Hackerstreet or be on the phone. The face-to-face meeting is very time consuming.

It starts out mostly with good intentions. Most emails I get ask for 15 – 30 min, but I feel guilty to give them that little amount of time after they have made the hike all the way from where they work / live to come and meet me. So its invariably a 1 hour meeting.

I also have some great folks working with me as part of our team. I have to prioritize time with them first. So the average 8-9 hours at work goes towards running projects, talking to customers, working on my to-do list and mentoring my direct reports.

I started initially with the intention to make a contribution to startups in India. I would meet and actively participate at many conferences, events and sessions. I am still doing that, but my focus is to spend more time with few people, instead of doing a quick meet-and-greet at those events.

So if you wish to catch up face-to-face, please meet me at one of the conferences / speaking engagements.

I usually meet / speak at 1-2 events each month. I promise to stay later and come early to these so I can devote time to learning from you and giving you my opinions.

I know this is not ideal for most entrepreneurs, but I would prefer to set expectations to not meet at all and make meeting face-to-face the exception than the rule.

I am always available via email (mukund @ or phone: +91 998 054 2748.

Thanks for understanding.

Do you really need a “board of directors” when your company is 6-12 months old?

I had a few questions on “Board of directors” at a startup from Manish Taneja. This it a post on the first question – Do you really need a “Board of directors” when your company is 6-12 months old?

You always need a board of directors, even if its just one person. A board primarily is responsible to the shareholders and looks out for their interests.It also advises the management (mostly the CEO) on company direction.

A board of directors (BoD) is not the same as an advisory board. The BoD has a fiduciary responsibility, whereas the advisory board has none.

Obviously when you are single founder, you will be “the board”. Since you are the only shareholder. There are a few procedural (statutory?) items that need to be completed (annually or more frequently) which are performed by the board.

Now on to the larger question: When and how should you expand the Board to a larger set of people?

The simple answer is when you believe your company needs Operational discipline, Financial discipline and “Discipline in your strategy“.

That could happen in 3 months, 6 or even later.

The most important thing I have personally experienced with board meetings is the need for reporting & tracking your company’s key metrics. Hence the discipline that sets in.

The company’s key metrics may not be revenue, customers or any other metric in the first few months. It could be as simple as status of the product development effort, customer development status, etc.

What I have found is the simple act of having to report that on a frequent basis is a bias for action and progress.

This is the biggest advantage of having a board of directors (especially for those entrepreneurs who tend to be “loosey-goosey” about most things.

Initially it might be okay to add one more person to the BoD, who you trust, can bounce ideas off and someone who will give you honest feedback to help keep things on track.

Most institutional investors (VC’s and some advanced angels) will however request a board seat to protect their (as a shareholder’s) interests.

In the next set of posts, I will detail – how many board members should you have, how often should they meet, what are board committees, how to manage your board and other board questions. If you have a specific question about the board,, feel free to email me or leave a comment.

A sample of the “values and culture” of leading technology companies

As part of the culture and values post I looked at what were the values & culture statements of the top technology companies. From Amazon to Zynga, the key things that they believe makes their company unique and successful. Some observations:

1. The older the company is the more “traditional” its values are, like integrity, customer focus, etc.

2. If you had to allocate a % to the categories of values, hiring people features in almost all of them.

3. Customer (or User) features next in 70% of them.

4. Innovation (or the commitment to it) features in less than 50%.

5. Interestingly only Apple talks about products.

  1. Google

1)       Focus on the user and all else will follow.

2)       It’s best to do one thing really, really well.

3)       Fast is better than slow.

4)       Democracy on the web works.

5)       You don’t need to be at your desk to need an answer.

6)       You can make money without doing evil.

7)       There’s always more information out there

8)       The need for information crosses all borders

9)       You can be serious without a suit

10)   Great just isn’t good enough.

  1. Apple

1)       We believe that we’re on the face of the Earth to make great products.

2)       We believe in the simple, not the complex.

3)       We believe that we need to own and control the primary technologies behind the products we make.

4)       We participate only in markets where we can make a significant contribution.

5)       We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.

6)       We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.

7)     We don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

  1. Facebook

1)       Focus on Impact

2)       Move Fast

3)       Be Bold

4)       Be Open

5)       Build Social Value

  1. Zynga

1)       Love to play

2)       Level Up (Meritocracy)

3)       Be CEO

4)       Zynga Speed

5)       Zynga first

6)       Innovate

  1. Salesforce.COM

1)    Get Your Aspirations Right

2)    Field Your Best Possible Team

3)    Focus on Your Best Customer Segments

4)    Create Your Competitive Advantage

5)    Build Your Sales and Marketing Factory

  1. Amazon

1)       Customer Obsession

2)       Ownership

3)       Invent and Simplify

4)       Are Right, A Lot

5)       Hire and Develop the Best

6)       Insist on the Highest Standards

7)       Think Big

8)       Bias for Action

9)       Frugality

10)   Vocally Self Critical

11)   Earn Trust of Others

12)   Dive Deep

13)   Have Backbone; Disagree and Commit

14)   Deliver Results

  1. Microsoft

1)    Integrity

2)    Honesty

3)    Openness

4)    Personal excellence

5)    Constructive self-criticism

6)    Continual self-improvement

7)    Mutual respect

  1. IBM

1)       Dedication to every client’s success

2)       Innovation that matters, for our company and for the world

3)    Trust and personal responsibility in all relationships

  1. Netflix

1)       Judgment

2)       Communication

3)       Impact

4)       Curiosity

5)       Innovation

6)       Courage

7)       Passion

8)       Honesty

9)       Selflessness

  1. HP

1)       Passion for customers

2)       Trust and respect for individuals

3)       Achievement and contribution

4)       Results through teamwork

5)       Speed and agility

6)       Meaningful innovation

7)       Uncompromising integrity

  1. Zappos

1)       Deliver WOW Through Service

2)       Embrace and Drive Change

3)       Create Fun and A Little Weirdness

4)       Be Adventurous, Creative, and Open-Minded

5)       Pursue Growth and Learning

6)       Build Open and Honest Relationships With Communication

7)       Build a Positive Team and Family Spirit

8)       Do More With Less

9)       Be Passionate and Determined

10)   Be Humble

  1. Twitter

1)       Grow our business in a way that makes us proud.

2)       Recognize that passion and personality matter.

3)       Communicate fearlessly to build trust.

4)       Defend and respect the user’s voice.

5)       Reach every person on the planet.

6)       Innovate through experimentation.

7)       Seek diverse perspectives.

8)       Be rigorous. Get it right.

9)       Simplify.

10)    ___ it.

  1. LinkedIn

1)       Demand excellence

2)       Take intelligent risks

3)      Act like an owner

  1. SAS

1)       Passion for excellence

2)       Enthusiasm and initiative

3)       Responsibility

4)       Focus on customer

5)       Emphasis on Competence building

6)       Cost consciousness

7)       Team work

8)       Integrity and loyalty

9)       Organizational pride

10)   Knowledge sharing

  1. Cisco

1)       Customer focus

2)       Corporate citizenship