Founder Fridays No. 133
Hiring Good Judgement -- Steve Jobs on How to Hook Your Audience -- 3 Types of Investor Deadlines
Happy Friday.
Hiring Good Judgement
Hiring is ultimately a leap of faith based on intuition about who will exercise good judgment in unpredictable situations. Despite our attempts to make recruitment scientific and data-driven, executive hiring decisions remain fundamentally subjective assessments of qualities that can't be quantified. When evaluating candidates for leadership positions, what you're really betting on is whose judgment you trust most when faced with uncertainty and limited information. The uncomfortable truth is that even the most rigorous hiring processes culminate in a subjective decision about who feels right for navigating the ambiguity that defines executive work. Jason Fried (4 minutes)
Steve Jobs on How to Hook Your Audience
The first 90 seconds of your pitch determine whether investors stay engaged or mentally check out. Jobs' legendary iPhone launch demonstrates three techniques founders can immediately implement: make bold promises backed by evidence of significant investment ("two-and-a-half years") while framing your product as revolutionary, invite your audience to feel like privileged insiders witnessing something extraordinary ("you're very fortunate") and establish credibility by juxtaposing your current vision with past successes. Your opening functions exactly like a doorway — craft it deliberately to pull listeners in. Once they step through, they're invested in your vision and significantly more likely to follow your entire story. World Builders (4 minutes)
3 Types of Investor Deadlines
Should you give prospective investors deadlines? Creating artificial urgency usually backfires, but strategic deadlines can transform your fundraising dynamics. The three-tier approach — starting with soft timeline outlines ("aiming to wrap things up in six to eight weeks"), progressing to more defined deadlines after gauging interest ("looking at getting to terms in about two-and-a-half weeks"), and deploying ultimate deadlines only when legitimate constraints exist — keeps investors engaged without appearing desperate. Properly communicated deadlines don't alienate investors; they actually help them prioritize your deal among their chaotic schedules and create the right pressure to make decisions. When an investor pushes back on timing, it's often a positive signal that they're interested enough to negotiate, giving you valuable leverage to decide whether adjusting your timeline is worthwhile. Adamant (5 minutes)
Founder FAQ: How Should Founders Think About Employee Compensation?
Most founders overlook the critical relationship between cash compensation and equity when structuring early employee packages. The most effective approach follows two complementary principles: allocate roughly 10% to your first 10 employees (with the first five hires receiving 0.25%-3% and hires six through 10 receiving 0.10%-1%), while remembering that below-market salaries should always be offset by proportionally higher equity grants. Implementing a four-year vesting schedule with a one-year cliff protects your company from early departures while providing both the carrot of increasing stock value and the stick of incomplete vesting. When communicating these packages, emphasize transparency about vesting details, highlight the total rewards beyond just cash and equity, and proactively address concerns — all while tailoring your approach to each candidate's individual priorities. Westaway (7 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
Extending Your Runway with General Counsel
In this economy, every startup is looking to lower burn rate and extend runway. We helped a Series A, generative AI company drastically reduce their legal spend by switching to our General Counsel service. When we first met the owners, they were working with a big law firm and felt they were overpaying for basic legal work. Nearly every month, they got a hefty bill just to cover equity grants, contract reviews and lawyer calls/emails. When they switched to General Counsel at Westaway, they:
Got more personal service and quicker response times.
Significantly reduced their legal spend.
With faster deal execution and lower spend, they extended runway and improved cash flow. If you're looking to optimize legal costs and extend runway, click here to schedule a call. Let's discuss whether on-demand General Counsel is right for your startup.
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