Founder Fridays No. 67
Helping startup founders and operators scale smarter.
Happy Friday.
Post Raise Success
As the post-raise glow fades away, what’s revealed underneath is a pressure to spend the money you raised and communicate your decisions to your new bosses: your board of directors and your investors. Here are three tips: 1) Personalize consistent communication with your investors and board members. Monthly is a good cadence. See below for good guidance/template on board communication. 2) Spend money based on a plan, not pressure. After a raise, founders can feel a lot of pressure to spend that money quickly on hiring. If you’re still in the early stages, you’ll likely need to hire a chief operating officer if you don’t have one already. Beyond this key hire, it can be tough to quiet the pressure to hire more people without a solid plan, just because you have the money to do it. 3) Get your board meeting plan together. See more on that below. DocSend (5 minutes)
Investor Updates
A startup investor update is a structured report that a company provides to its investors on a monthly basis. It should include: 1) A Performance Snapshot. This overview includes crucial metrics and financial figures that show the company’s health and growth. 2) Honest Disclosure of Highs and Lows. While it’s important to share successes to show progress, being truthful about challenges and struggles is even more important. An open and candid account not only builds trust but also invites feedback and potential solutions from investors. 3) Specific Requests for Assistance. Your investors and board members are valuable resources, with knowledge, experience and extensive networks. To make the most of their help, be precise and specific when requesting assistance. This article has a few templates that you can use and customize. Westaway (7 minutes)
Running Effective Board Meetings
A successful board meeting starts weeks before your board enters the board room (or Zoom call). While board meetings are essential, they need not be burdensome or excessively time-consuming in preparation. The goal should be to set up a system that will maximize the value derived from these meetings while minimizing the preparation time. This article has a preparation timeline that begins 28 days prior to the meeting. To optimize the meeting, founders should pre-determine one or two strategic decisions for the board to focus on. This sharpens the discussion, allowing for more in-depth exploration and valuable advice. This article has some templates for board meeting agendas. Westaway (6 minutes)
Founder FAQ: How do I take startup board meeting minutes?
Taking minutes during startup board meetings may seem like a mundane task, but in reality, it is a critical aspect of corporate governance. Not only do these records serve as a legal documentation of decisions made, but they also offer transparency and accountability while providing valuable insights into the strategic course the company is charting. This article outlines what to include in meeting minutes, best practices for minute-taking, and how to maintain good records for efficient management and due diligence. Whether you are an experienced notetaker or a novice, this article will equip you with the skills necessary to ensure nothing of significance slips through the cracks. 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
Is the billable hour right for startups?
Most law firms bill startups by the hour because that's the status quo. But while it may work for big companies, the billable hour is likely the wrong model for startups. Why?
It incentivizes inefficiency. Firms are motivated to pad hours rather than work efficiently. This adds unnecessary costs.
It rewards busywork over results. Startups care about outcomes, not hours logged.
Costs are unpredictable. With fluctuating monthly hours, legal spend is hard to budget.
It stifles innovation. Hourly billing gives no incentive to find better solutions. Startups need forward-thinking counsel focused on results. That's why we've ditched the billable hour for transparent flat fees.
If you're ready to explore a law firm with a better billing model, let's talk.
Post of the Week
