In line with my comments about last week being a week about beginnings, we quickly move to the this week's Bible portion, with the first "hard reset" in history, which was the great Flood, the only survivors being those who were "backed up" on the Ark with Noah.
Part of the problem with Earth 1.0 was loose ends -- a lot of vagueness from the founder[s] as to rules of the game.
I find that in meeting with start-ups we see the same problems again and again -- today I am highlighting that often a cloud of vagueness surrounds the founding, leaving the founders ill-prepared to answer simple questions like: What is the cap table? (meaning, who owns what share of the company). Many of the founders, with very good intention (I was there myself many times over), push off clarity to focus on the revolutionary aspects, the disruptive nature of their product/service offering, not wanting to get bogged down with "boring" shareholder agreements.
Just today we held a series of back-to-back meetings with the top companies in our deal flow pipeline, as our Special GP Adviser and Investment Committee member, Richie Pearlstone, was with us in Jerusalem to check out portfolio candidates in person (and as Richie said today -- still nothing like being here in person -- subject for future discussion). Almost every company we met with suffered from series haze of vagueness surrounding key issues...the best was a one-person company, because at least he could accurately say what his cap table stands at (as a bootstrapped company, he owns 100%). The other four companies had all kinds of side agreements, former founders, advisers, etc., which prevented them from answering a simple question of who owns what. And the one with clear ownership, well, he has other issues of vagueness concerning his business.
What I have quickly realized as a new-born venture capitalist, specifically one focused on seed to early stage, the best free advice and coaching I can give is to push for clarity on all fronts.
Loose ends are almost never a good thing with a seed stage start-up, they only serve to take what could be a simple deal and turn it into a takeover of GE.
Through painful personal experience I have learned that it is at the earliest stages that total clarity must be paramount -- leaving as little as possible to be "worked out down the road."
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