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I thought about things I never had to as an entrepreneur: check size, ownership percentage, deal stage, portfolio construction and risk. So I encouraged entrepreneurs to think about raising their funds as quickly as they could because. I have a young entrepreneur friend who IMs me a lot. Unemployment likely to rise.
” And yet we entrepreneurs who will sign up for the journey accept that failure is a possibility and the true entrepreneurs know that they must stick with the ship even if it’s sinking. First time entrepreneurs can fall prey to hubris. But markets don’t generally love failure. Yet failure smells.
Even if you are an experienced entrepreneur, you’ve probably only seen a few founder agreements in your life. They have voting rights which may entitle them to force or veto certain key decisions, e.g., hiring or firing the CEO, selling the company, raising money, etc. Founders have rights as shareholders.
Normal advisors are also assembled by naive entrepreneurs who think the mere presence of an advisory board will create social proof and help them raise money. Advisor compensation Whether you’re hiring a normal advisor or super advisor: Advisory shares are usually issued as common stock options.
Many modern entrepreneurs have limited exposure to the notion of failure or layoffs because it has been so long since these things were common in the industry. Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees.
I call it the entrepreneur thesis. I’m not talk about the age old debate amongst investors whether you back entrepreneurs, markets or products (or as people like to hedge – product / market fit). It’s entrepreneurs I back. It’s what I call the “entrepreneur thesis.” So what is the “entrepreneur thesis?”
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