Founder Fridays No. 41
Helping founders scale smarter.
Happy Friday.
If you don’t also subscribe to my other newsletter the Weekend Briefing, you may not know that I love music and have put out a monthly playlist for the last 8+ years. I may start including them here as well. I think my June playlist is particularly good. I’ve been into electronic music recently, so this is a fun playlist featuring artists like Bob Moses, Rufus Du Sol, Ben Bohmer and Ry X. Enjoy!
The Funding Divide
DocSend just released its annual survey on how race and gender impact startup fundraising in 2022. Here are some takeaways: (1) All-female teams raised 36% less than all-male teams. (2) All female teams with minority members averaged 33% fewer investor meetings and raised the least amount of funding. (3) Diverse teams raised 33% less than all-white teams. (4) All-female teams with a minority took 33 meetings to raise $750K. All female teams without a minority took 53 meetings to raise $1.2 million. All-male teams with a minority took 48 meetings to raise $1.3 million. All-male teams with no minorities took 49 meetings to raise $1.6 million. Mixed-gender teams with a minority took 50 meetings to raise $1.1 million. Mixed-gender teams without a minority took 45 meetings to raise $1.8 million. DocSend (14 minutes)
Mental Models for Collaboration
According to our reader survey, the most popular adjective you identify with is “collaborative.” If that’s important to you, here are three mental models to help you improve your collaborations. (1) The Abilene Paradox is a phenomenon where a group collectively agrees on a course of action that goes against the preferences or beliefs of each individual in the group. It happens in a low-energy collaboration because individuals don't want to express their true feelings or ideas, and instead go along with the group to avoid conflict or maintain harmony. (2) Parkinson’s Law is the adage that work expands so as to fill the time available for its completion. (3) Chesterton’s Fence, coined by philosopher G.K. Chesterton, is a prime example of second-order thinking. The idea is that before you attempt to change or remove something (i.e., “the fence”), you should first understand why it exists in the first place. The Pocket (5 minutes)
The Most Important Skill
As a founder myself and working with founders over the last 15 years, I think the most important skill is choosing where to focus your energy. Deciding what to pay attention to is hard, overlooked and, most importantly, a negative skill. It’s about what you willfully ignore as much as what you actively seek out. Francis Crick, who discovered the double helix structure of DNA, was once asked what it takes to win the Nobel Prize. He responded: “Oh it’s very simple. My secret had been I know what to ignore.” Einstein reportedly once said that his own major scientific talent was his ability to look at an enormous number of experiments and journal articles, select the very few that were both correct and important, ignore the rest, and build a theory on the right ones. Collab Fund (6 minutes)
Founder FAQ: What Is Due Diligence and How Do I Prepare My Startup for It?
Due diligence is a crucial step for any startup seeking funding. It’s a deep dive into the company’s financial and legal history to assess risks and opportunities. Going through due diligence provides an opportunity for founders to showcase their business acumen and build trust with potential investors. It can also help startups identify areas where they need to improve their operations or legal compliance. Like it or not, due diligence is an essential step in building a successful startup. Preparing for and going through the due diligence process is not the fun and exciting part of running a startup. Many founders find it tedious. This article will help you understand what to expect and how to prepare for due diligence. Westaway (12 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.
Move Fast. Don’t Break Things.
Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a 1-on-1 call with me.