Founder Fridays No. 105
Founder Fridays No. 105
Boom Time Versus Gloom Time -- The Silicon Valley Advantage -- Board Meeting Pre-Read
Happy Friday.
I’m so sorry… Last week I had a misfire. I was attempting to schedule Founder Fridays, but actually hit “publish” on Monday. Anyhow, I hope you enjoyed getting your content 4 days early.
Now back to our regularly scheduled programing.
Boom Time Versus Gloom Time
Could a recession be the perfect time to launch your startup? Surprisingly, "gloom time" startups — those founded during economic downturns — often have significant advantages over their "boom time" counterparts launched in periods of prosperity. While boom times offer excitement and abundant funding, they also bring intense competition, inflated costs and pressure for unsustainable growth. In contrast, gloom times allow founders to focus on fundamentals, faceless competition and build stronger investor relationships, potentially setting the stage for more sustainable, long-term success. Andrew Chen (7 minutes)
The Silicon Valley Advantage
Research from Jorge Guzman, analyzing companies between 1988 and 2014, suggests that startups could significantly improve their chances of success by relocating to tech hubs, with Silicon Valley offering the most substantial benefits. The study found that moving to Silicon Valley could increase a startup's odds of achieving equity growth through an initial public offering (IPO) or acquisition by 277%, boost their probability of securing venture financing by 218%, and increase their chances of receiving a patent by 60%. However, this data is now quite outdated, and the tech landscape has dramatically changed since 2014 with the rise of remote work; emerging tech hubs in other cities; and advancements in communication technologies, potentially reducing the necessity and advantages of physically relocating to Silicon Valley. Wall Street Journal (4 minutes)
Board Meeting Pre-Read
A good board meeting pre-read is a comprehensive document distributed to board members several days before the meeting. It typically includes key updates on sales, technology, manufacturing, finances and personnel. The sales section covers current performance, pipeline, major accounts and near-term projections. Technology updates focus on priorities and upcoming releases. Manufacturing information highlights key partners and progress. Financial data includes the balance sheet, profit and loss (P&L), and cash forecasts. The people section covers recent and planned hires, as well as any significant departures. This pre-read allows board members to arrive at the meeting well-informed, enabling more productive discussions on strategic topics rather than spending time on basic reporting. AVC (4 minutes)
Founder FAQ: How Do Startup Vesting Schedules Work?
Vesting schedules are crucial tools for startups to attract and retain talent while ensuring alignment with company goals. These schedules typically involve employees earning equity over time, rather than all at once, serving as both a reward and motivator for long-term commitment. The most common vesting structure is a four-year schedule with a one-year cliff, meaning employees start vesting after their first year and continue monthly thereafter. By implementing thoughtful vesting schedules, startups can create a culture of commitment and collaboration that fosters long-term growth and success. Westaway (5 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
An Innovative Law Firm?
Being listed among Fast Company's “Most Innovative Companies” is an honor for our law firm, yet we believe innovation matters if it actually produces better outcomes for startups. Here’s how we’ve innovated to better serve startups:
Clear Pricing. Traditional billable hours can lead to misaligned objectives and unexpected fees. We've replaced this with straightforward, flat-rate pricing.
General Counsel. Most entrepreneurs want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a fixed, monthly fee so you can control your costs and focus on scaling your business.
Automation and Artificial Intelligence (AI). We've streamlined our operations through automation and AI (where appropriate), ensuring efficient, high-caliber results.
If you’re an innovative startup looking for an innovative law firm, let’s talk.
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