What is world class behavior for a venture capitalist?

Charlie O’Donnell has a good blog post, for venture capitalists, called Level Setting and Career Goals for VCs: What level are Midas List VCs actually performing on?

He shares what he believes is world class performance for venture capitalist in the following areas: Visibility, Sourcing, Reputation, Screening, Domain Knowledge, Deal Closing, Board Approach, Capital Network, Talent Network, and Corporate Network.

Financing lessons for startups from Viaplay’s recapitalization plan

Viaplay’s announced pay-to-play recapitalization plan highlights a few lessons that are also applicable for startups.

  • The Golden Rule (Whoever has the gold makes the rules) is especially important when a company is about to run out of money, is about to break loan covenants or cannot pay its debt.
  • Debt gives leverage in both directions. When things are not going well, it amplifies the problems and creates instability for the company and shareholders. In addition to the fact that interest payments and amortization are creating a cash outflow.
  • Equity, as a comparision, is stable and don’t create a cash outflow.
  • Taking on significant operational costs and liabilities without fully securing funding creates a big dillution risk for shareholders that cannot or are unwilling to provide additional equity funding if needed.

10x and good enough

A startup, and for that matter all organisations, have limited resources. To get customers to adopt a new behavior or a new product you need to be a lot better on a few things (let’s say 10x). To achieve that requires an intense focus. This means there is limited time to do everything else, so it should be done but not more (let’s call it good enough).

A startup should try to do some things 10x better and most things just good enough. Figuring out which areas needs to be 10x:d and doing them really well is very difficult.

(This was inspired by a lunch discussion with Stockholm-based entrepreneur.)

Four ways to build a monopoly in technology

Peter Thiel on four ways to “build a monopoly“:

  • Super fast distribution on a very thin product (e.g. Twitter)
  • A technological advantage that is continually built upon: you come up with something new and steadily improve (e.g. enterprise SaaS software)
  • A truly brilliant breakthrough (e.g. Bitcoin)
  • Complex coordination—where you take a lot of little pieces and coordinate them into something new