Welcome to my Blog

I typically blog on various topics related to founders/cofounders, investing in startups, motivation and entrepreneurial culture. You'll note in the drop-down menu to the blog above that I have written several series you can access on subjects such as Mentorship, Technological Disruption, University Entrepreneurship (for students) & a series for those founders just starting-out called 'Getting from Zero to One'. Hope you enjoy!

Just below are posts I've written over the years on entrepeneurial culture & motivation.



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The Rise of Tech @ Columbia University: Part 2, The Venture Investors

Here it is: The second post in this series, which reflects on the remarkable flourishing and momentum that I’ve seen develop in the entrepreneurial ecosystem at Columbia University over the past decade.

In the first post in this Series we had a quick look at a sampling of some of the great companies and founders that have emerged from the ecosystem over the past decade. Thanks for all your encouragement and tweets and help with companies I may have missed. Keep it coming!

In preparing for this post, I took a look at the various venture capital funds throughout the country that have Columbia DNA on their teams. It turns out that Columbia alums are on the teams of more than 300 venture funds in one role or another!  And whereas listing all the venture funds that have Columbians on their team would be too voluminous an exercise for one blog post, I've listed the 40+ venture funds below that have Columbia alums at either the Co-Founder, Partner or Managing Director level. Not surprisingly, Columbia graduates are among those running some of the most vaunted names in the business (Sequoia, a16z, Accel, FirstRound and others), as well as many of the emerging venture franchises of the future.



The Rise of Tech @ Columbia University: Part 1, The Founders

Now entering my 11th year at Columbia I wanted to take a moment to reflect on the remarkable flourishing and momentum that I’ve seen develop in the entrepreneurial ecosystem at the University over the past decade. It has no doubt mirrored the ascent of NYC's entrepreneurship ecosystem and ridden the tidal wave of university entrepreneurship that we have all witnessed nationally.  Yet it's also been great to see the work of so many internal champions at Columbia see the light of day; students, alumni, faculty, and trustees alike. We over at Columbia Entrepreneurship take the view that we're simply helping to harness and facilitate what can only be described as a cultural transformation and help tell the stories that need to be told. Hence this series of posts I'm going to write.

It’s also important to mention that so many of us at Columbia are inspired by the legacy of the late Bill Campbell (photo above) who served as Chairman of the Board of Trustees for many years and inspired us through his encouragement and mentorship to step on the gas pedal of entrepreneurship as an institution. Many people only know of his legend in Silicon Valley -- but he’s just as much of a legend around Columbia where he was once an undergraduate and then the beloved head football coach before returning years later as Chair of the Trustees.

As for this Series of posts - I thought we'd first have a quick look at a sampling of some of the great companies and founders that have emerged from the ecosystem over the past decade in Part 1, then have a look at the Columbia alumni in the venture capital space in Part 2, and lastly have a glance across all the great programs percolating and the terrific entrepreneurship faculty across the university ecosystem in Part 3.

We’ll keep the main Columbia startup directory updated here so we have an evergreen resource over the coming years. You should go there for the larger list which we continue to curate and build upon.  Many are helping us build this master list and I want to especially thank Naval Ravikant for helping us out with this. We will be using Angellist data and other sources over time to enrich the startup directory of Columbia founders page over time, so please send any more submissions of tech companies founded by Columbia alumni you come across to entrepreneurship AT columbia DOT edu as we continue to build this record on an ongoing basis.

OK, onto a sampling of some of the great technology companies and founders that have emerged from Columbia over the past decade. Here are just a few of some of the prominent venture-backed companies founded by Columbia graduates over the last decade. To learn more about the Columbia founders of each company simply click on the logos below.


Let's start with some of the companies that have already become household names:

The next batch are some very promising, up-and-coming venture-backed companies that may soon become house-hold names:


Stay tuned for the next part of this Series, Part 2: The Investors.



Stop Looking for a CoFounder


I recently wrote this article for Amex Open Forum. The original text can be found here.

Everywhere I go, I hear the same refrain from fledgling entrepreneurs I meet: “I’m looking for a co-founder.” I hear it from many of my students, from folks at various entrepreneurship events and meetups, and from people suffering in jobs at large companies who would love to pull the trigger on their startup—if they only had that critical co-founder.

And here’s why they’re on a fool’s errand.

The most common type of co-founder that’s usually sought is, of course, the technical co-founder, someone who can make your latest Internet-enabled business idea come to life by coding it for you because you don’t have the skills to do so. But some people also tell me they just need a co-conspirator because there’s too much work to do and they’d get lonely without a co-founder. It’s a fair point—and one that Y Combinator’s Paul Graham discusses in this incredible post.

But I’m actually here today to tell you: stop looking for a co-founder. Stop asking people to help you find one, and stop talking and thinking this way. I say this not because it’s massively annoying and clichéd by now (which it is), but mainly because the very act of looking for a co-founder is already a sign that you are hopelessly unprepared for the coming venture—and going about things in a completely backwards way.

Think about it this way. Let’s say you had this dream about sailing around the world for a few years. How would you go about realizing this dream?

Would you immediately start looking for an experienced sea captain with whom you could team up? It certainly seems a logical choice on its face, right? And let’s say you miraculously found one such old sea-dog, replete with forearm anchor tattoo and corncob pipe, in your first few weeks of searching—how would that play out?

Well, he’d probably do all the sailing, right? (Mainly because you don’t know how to sail and have zero experience.) He’d probably have to plot the various legs of the journey, too, right? (Because on day one, he would tell you that your plan to take a 36-foot wooden sailboat across the Bay of Fundy in winter isn’t the best course of action.) He’d probably be the one standing at the wheel whenever you hit rough weather, right?

Hmm. I also bet you’d have to pay him something to actually participate in this venture as well, no?

Let’s say after six months he tells you he’s run out of his favorite pipe tobacco and bails on you while you’re docked at some far off port. What do you do now? You probably should have stayed home and read some Melville or Joseph Conrad. Let’s face it—real sailing was never for you.

But hang on. Let’s say you had said this dream of yours was all-consuming and you were dead set on making it happen. Let’s say you just disappeared for a while and learned how to sail, became intimate with the latest technologies and the best routes, and became a fixture at your local sailing clubs and docks?

What likely would have happened with this approach? My guess is that you would have made great friends in the sailing community, over time. The relationships would have been genuine and based on mutual fascination and love of sailing, adventure, and the sea. You would have learned a ton about this new world and, slowly but surely, you would have become a part of it. When you finally decide to make that journey to Timbuktu, one of these friends—maybe someone with a lot more sailing experience than you, but who respected you a lot and knew your character and talents—might just suggest that you embark on that journey together.

Business is the same. Even though it’s just little old you steering your company, take comfort in the fact that we’re living in an era in which the individual entrepreneur is empowered with tools and access in a way that people could barely have imagined as recently as a decade ago. You want to open a store? In 10 minutes you can be up and running on Shopify. You want to amplify your voice with a marketing campaign? Facebook, Twitter, and YouTube are massive communities you can tap into for free. Don’t know how to build a website? Hop on Codecademy or take a Skillshare class and you’re on your way.

Even without a co-founder, you can acquire skills and employ powerful tools to get to a minimum viable product all by your lonesome. In fact, it’s so easy and accessible, there really is no excuse not to. Imagine how powerful this is. You can generate a massive amount of value before even thinking about having to dilute your equity. Ironically, this is actually the best way to find co-founders, early employees and investors—just get a real business up and running by yourself!

If and when the time comes to partner up, just know that great partners come in all shapes and sizes. You can’t predict and plan for their arrival, just like you could never decide to meet a potential spouse next Saturday night. So how will you know they’ll make a good co-founder once you meet? You won’t.

The key is not to rush into business with someone. Spend plenty of time with them, bring up difficult issues directly when appropriate, and see how they handle themselves in a variety of situations and circumstances. Are they thoughtful and considerate of your point of view? Do you share values with them? What are their other life relationships like? Like any journey, the key is slow and steady.

Why Do So Many Partnerships End in Disaster?

In my last post on OPEN Forum, I made the case that entrepreneurs should stop actively looking for a co-founder. Now I’m here to tell you that if you think you have in fact found the right partner, you should be extremely careful and not rush into any arrangements.

Although it’s shocking, the fact is, a huge percentage of the companies I come across in my various roles as an entrepreneurship professor, mentor, and investor are doomed to fail essentially before they ever get started, due to founder incompatibility.

The reasons for these breakups that are given in retrospect by the founders are some variation of the following:

“The equity split was wrong from the beginning.”
“We had different visions for the direction of the company.”
“We never saw eye-to-eye on major issues.”
“He took advantage of me and stabbed me in the back.”
“Once the VCs came in, she sided with them and pushed me out.”

Guess what? These are symptoms, not causes.

I would say that the most frequent cause of co-founder disputes is the simple reality that the founders were never well-suited to each other (and often unsuited for the market they sought to enter) for any number of reasons. Some of the typical incompatibilities I have seen over the years include:

  • The reason they’ve teamed up is simply because they’re in the same class, they’re roommates, or they live down the hall from one another in college.
  • They’ve never spent significant time with each other outside of one familiar setting (e.g., school, dorm, work) and thus haven’t seen how the other handles stress and operates in a variety of environments.
  • They haven’t considered each other’s values and motivations carefully enough. In all likelihood, these are quite different.
  • One or both of the co-founders has no experience in the market.
  • One is totally committed and the other just likes the idea of being “part of a startup.”
  • There are simply too many founders in the equation and everyone’s equity has been diluted from the get-go—you shouldn’t need more than four founders.
  • Instead of working from mutual and complementary strengths, the entire reason for the union is based entirely on the insecurity of having to go it alone.

No doubt there are plenty of success stories out there in which the founders were roommates—or there were “too many” of them—but in my experience, these are truly exceptions to the rule.

Here’s the qualities that successful co-founders usually possess:

Complementary skill-sets (such as a designer and a coder)

There’s a lot to do when you’re launching a company. It makes sense to have a co-founder that has aptitude where you don’t, doesn’t it? Some teams have one founder as the frontman/woman and one as the ops person, while some companies are founded by a coder/designer combination. Jobs and Wozniak are the classic example of the hacker and creative partnership.

Shared values and mutual respect

I tell this story to my students. Years ago a prospective investor interested in a company I was launching asked me if I had ever been to my co-founder’s house. I was literally tongue-tied. The answer was no, but I had never even thought that this might have been important. I didn’t realize at the time how right he was. When I then visited the co-founder’s home, I realized that I was not going to be in business with him. He treated his wife somewhat disrespectfully, the place was a total mess and in one fell swoop I saw a completely different side to the façade he had been presenting to me and others.

Shared motivation

John Doerr at Kleiner Perkins is well known for saying that the best teams are comprised of missionaries, not mercenaries

What this means is that the best entrepreneurs are motivated by the mission of their startups and not the money. Make sure you are in this for the right reasons—and that your co-founder is, too.

Deep loyalty and friendship

There’s an old saw out there about never doing business with a friend. I always thought this was a flawed premise.

As I’ve stated earlier, the primary reason for co-founding with someone needs to be the value they bring to the table, but if that other person happens to be a true and loyal friend, you are extremely lucky. You’ll never need to waste a minute worrying about his loyalty or about getting stabbed in the back.  If you’re not that close yet, take your time—but if you don’t at least see yourselves getting to be super loyal to each other as co-founders, don’t partner with him.

My main point is you really have to know the other person deeply. You both must be self-aware and understand how important the relationship is, and be mature enough to handle the inevitable disagreements with great professionalism and understanding. Remember this—if you both want what’s absolutely best for the company, you’ll always find a way through.

(Click here for the original post on Amex OPEN Forum)



Most of the readers of this blog know by now the importance I place on resilience as a quality that entrepreneurs need to possess. I'm always preaching it to my students at Columbia and to any founders I mentor. I remind them too, that no one can be resilient if they are working on something they do not care deeply about. It is simply not something one can manufacture. As an investor I'm of course always trying to determine how resilient founders are before I even consider investing- in fact I go so far as to call my investment vehicle Rugged Ventures™ so that people have an idea of the type of founders I'm looking for. I've also written here about just how much I relate to the "war-time" CEO paradigm Ben Horowitz described in his terrific book as a result of my own experiences as a founder. And yet when I talk about this quality- I always try to talk about it in the larger context of "life" - not just in the context of startups.

I winced many times when I read Ben's book. I think that's why I learned so much from it. He suffered immensely and took one battering after another. And endured.

And I winced earlier this week also, much moreso- when I learned of the passing of a personal hero of mine, the legendary Grandmaster Viktor Lvovich Korchnoi.

You may never have heard of him- but Korchnoi was a colossal figure who bestrode the stage of grandmaster chess throughout the 20th century and amazingly- well into the 21st. He took on and beat all of the greatest players in the world from as far back as Levenfish, who was born in 1889, to the current world champion, Magnus Carlsen, who was born 101 years later in 1990. He maintained this high performance level well into his 80's, whereas most grandmasters see their skills begin to recede in their 40's. He was the a four-time champion of the Soviet Union, played in ten Candidates tournaments, qualifying to play for the World Championship final twice, and defeated nine world champions multiple times during his life. His achievements in chess were simply spectacular.

Yet he is also known as perhaps the strongest player in world history never to be world champion. His life and career were full of bitter and devastating disappointments, immense sacrifices, enormous suffering and endless struggle.

Reading the story of his life would make anyone wince- after all- for most of us, our lives have been so much easier by comparison. Few human beings were forged of the same steel as Korchnoi.

I should first mention that he and his family endured and survived the great Siege of Leningrad when he was just a ten year old boy. This no doubt indelibly shaped his personality and mindset.  This was a 2.5 year-long siege that saw famine and illness lead to the deaths of 1.5 million people and the evacuation of a similar amount. It is considered to have been "the greatest destruction and the largest loss of life ever known in a modern city".  As a chess-player it should be mentioned that he was no prodigy- only rising to the elite ranks after enormous effort and several decades of work. Upon reaching this pinnacle, the Soviets elected to favor the younger Karpov over him to be their champion and protege, limiting Korchnoi from playing in prestigious international tournaments. He bristled under this suffocating climate and became the first top-flight Soviet grandmaster ever to defect from the Soviet Union. He sacrificed everything and became persona-non-grata thereafter - the utterance of his name was not countenanced in his native country for decades to come. He was separated from his wife and son who were subsequently imprisoned during the course of what became his one-man-battle against the might of the Soviet regime, in which he fought his way- match after grueling match to twice qualify as the finalist to vie for the world championship head-to-head against his great foe and nemisis, Anatoly Karpov.

The matches against Karpov are the stuff of legend and are renowned by the chess community worldwide. Books have been written about the wild, paranoid atmosphere of these titanic clashes. The regime marshaled every possible advantage they could exert against the dissident including recruiting the greatest Soviet grandmasters and trainers to prepare Karpov night and day before the match started. During the 1978 world championship match they even went so far as to install a noted mystic/hypnotist by the name of Dr. Zukhar in the front row to distract Korchnoi throughout the games and let fly the rumor that Korchnoi's son had been imprisoned and was being tortured. Imagine attempting to compete at the highest level in such a forbidding atmosphere.

And yet Korchnoi endured and fought back tooth and nail. Notice in the photo below the mirrored glasses he wore to counter-act the effect of the Soviet hypnotist.

korchnoi glasses
korchnoi glasses

In this particular world championship contest, though trailing for most of the match, Korchnoi mounted a legendary rally to draw level with Karpov- only to lose the final game in heartbreaking fashion.

And yet still he endured and kept rising to the challenge- again and again- never relenting.

I've been thinking about him all week and I realize that we should not wince for him nor lament his great disappointments. He himself would never have countenanced it- and he would have uttered one of his memorable caustic remarks to accompany his disdain for people's sympathies. That is because he relished the struggle and came fully alive when he encountered these enormous challenges. It was who he was- he reveled in it. He was a survivor and a fierce fighter-  and it was his pure love for his craft- his art-  that made him a symbol for all those who dare to take up the mantle and fight for their beliefs and for what they love. He was resilience personified.

RIP, Viktor Lvovich Korchnoi

korchnoi and kasparov

korchnoi and kasparov

korchnoi vs. karpov

korchnoi vs. karpov

When All Hell Breaks Loose, Startups Need a "Wartime CEO"


In his great book, The Hard Thing About Hard Things, Ben Horowitz talked about being a “Wartime CEO”. It was the first-time I had ever heard that expression but it resonated powerfully. Reading that book was akin to drinking a double espresso at 10pm. I did not put it down until the wee hours of the morning. It is now “required” reading for all my students. So what’s the difference between a peace-time and a war-time CEO of a startup? Every startup is rife with incredibly trying experiences after all. My understanding of what Ben means by the term “wartime CEO” is a CEO who is running the company when all hell breaks loose- not for a few weeks- but for months- even years on end. It means you’re living on the knife’s edge between survival and death for long periods. It is evident that Ben’s difficult experiences at Loudcloud/Opsware indelibly shaped his mentality and approach to startup life. He’s the unique combination of someone who has both a kind and gentle demeanor and the courage to do whatever is necessary to pull a company back from the abyss.

He says that "peacetime in business means those times when a company has a large advantage over the competition in its core market, and its market is growing" and gives the example of the Eric Schmidt era at Google. Ben added that at Loudcloud he was probably "a peacetime CEO for three days and wartime CEO for eight years"!

Upon reflection it occurred to me that you don’t choose what kind of CEO you’re going to be. Circumstances dictate what goes down in your entrepreneurial life and you need to play the hand that you’re dealt. It’s how you play that hand that ultimately defines you as a startup CEO.

I too was forced by circumstance to become a “war-time” founder in my first startup. I was young and naive about so many things. There were no blogs and “startup communities” back then to go to for advice and support. We were expanding and opening our healthcare facilities in states up and down the east coast. In one state, however, BCBS & Medicare pulled the rug out from under us just months after providing written assurances that they were going to cover our treatment. I’ve written about this before here.

This was the equivalent of walking into a bar with a smile on your face to meet up with friends and suddenly getting cold-cocked by a massive punch. That blow immediately put our existence in jeopardy. People’s livelihoods were at stake- people I had hired- people who in some cases had moved across the country to make this happen. Long-term leases had been signed with personal guarantees to banks. If this facility blew up we were screwed in more ways than one. This decision, by an influential insurer with many tentacles, could have spread to other geographies and other insurance companies. We could not allow this precedent to stand.

It took us two years of jungle warfare to come back from that blow. In the meantime the survival of that facility hung over our heads like a black cloud. For those 24 months, tough and brutal decisions were the only decisions that presented themselves. There was no respite; there were no “breathers”. It was an ugly and scarring zero-sum-game. Ultimately we fought our way back and won but the personal and psychic cost was immense.

This experience (and others) deeply shaped my mindset forever. It molded me as an entrepreneur, as an investor, as a teacher and as a coach to many.

As an investor now, I’m always on the lookout for entrepreneurs “on a mission” who have the courage to face outrageous and unexpected challenges- people who have no quit in them.

As a coach and teacher- I’m giving out smelling salts early. I want folks to know what they’ve signed up for and to expect the unexpected.


Bitcoin's Dark Underbelly

Werner Herzog

Werner Herzog

An' the dawn comes up like thunder outer China 'crost the Bay


Watch this video below before we talk, (yes it's worth your time):

Questions for you:

Is this the trailer for a new Werner Herzog documentary?

Or is it just another awesome example of what journalism can be with the likes of @Vice as opposed to the shallowness of the MSM?

Is it the story of a new kind of entrepreneur (Chinese in this case) the likes of which the world has never seen?

Or is it merely the story of the new generation of railroad barons or oil magnates- the new Carnegies and Rockefellers ?

Is it merely the story - (as the genius/protagonist/entrepreneur himself states) of "the mining era of Bitcoin",  as we might now talk of Picasso's blue period or the Bronze Age?

Or is it the post-modern riposte to the mythic, Campbell-esque dark subterranean workshop of the smithy of the gods, Hephaestus?

Or is it a mere expression of "Schopenhaurian will" expressed via an entrepreneurial venture with shareholders and employees and cables and fans and hollow rooms...

Is it a precursor to the soulless world of the predominance of machines and their hapless lackeys who oil them and tweak them assiduously only to take breaks for video games and cigarettes - much like a prison guard might relax from his shift?

Or is it the same soulless furnace of production we see throughout the world at the beginnings of any Industrial Age- the same menial dank conditions we saw on the lower east side in the sweat shops, that we see throughout the developing world in factories a la Foxconn, or in the coal mines where men and children destroyed their youth and their lungs?

Or is it the dawn of an emerging age that will liberate us from the servitude and obeisance to a financial system that subjects us to transaction costs and fees upon fees layered upon each other so as to chip away at the honest labor of hardworking men and women around the world?

Or is it the threnodial hum of a new dawn that the cosseted western mind cannot yet fathom?

Or is it the visual manifestation of an Andreessonian distopia where software eats the world?

Or is merely the colossal manifestation of a brilliant, focused entrepreneur's vision?

How do you see it?

(I am officially long Bitcoin)


'Tis the Season for... Pro-Rata Rights?!


'Twas the night before Christmas and all through the country families had gathered around the hearth and reveled in the peace and quiet of the season. Children were on their best behavior having been reminded of the impending arrival of all-knowing Santa Claus. Angels and VCs had consumed large quantities of alcohol and food and were borderline comatose.  Even the internet had slowed to a crawl.  Not a creature was stirring…....  wait, that is except for my friend @semil who catalyzed yet another epic tweet storm of opinion on Twitter- this time on the subject of pro-rata rights! The effect? Bile was spilled, ghosts were invoked for sure- but of course, it was a rollicking discussion. I too was roused from my reverie by @semil's unexpected X-mas rabble-rousing and he and I had the following exchange:

"Leave it to the one and only @semil to stir-up a pro-rata discussion on Xmas eve?  :) "    - dave lerner (@davelerner)
"LOL it was my master plan entirely! :)"  - Semil (@semil)
"families of angels and VCs from NYC to SV are wondering where we all went :)"   - dave lerner (@davelerner)

This wasn't the first time pro-rata rights had been discussed on the internet. Leading voices had weighed-in via their blogs. But I did note that plenty of folks on Twitter that night, (including plenty of would-be entrepreneurs), had little understanding of what pro-rata rights actually are nor how they effect real-life funding scenarios.

Also, as many have pointed out- with the advent of dozens of new seed funds, AngelList syndicates and the emergence of more and more super-angels, the "pro-rata" right at the very first round has become extremely relevant of late... 'tis the season for pro-rata rights indeed.

Let's do a quick definition so we're all on the same page and then I'll try to give my own perspective on the underlying dynamics via real-life scenarios.


Pro-rata rights allow an investor to maintain their equity percentage of a company, in which they have invested through multiple rounds of investment. As an example, if an investor has 0.5% of a company after she invests in the angel round, she "has the right" to maintain that 0.5% through subsequent funding rounds, by reaching back into her pocket and investing however much $$ it takes to maintain that 0.5% (so that dilution cannot be forced upon her).


Scenario: Entrepreneur Raising an Angel Round

The entrepreneur is raising her angel round. Is it safe to assume that she would want her earliest investors, (who are backing her before she has had any success at the riskiest point of her startup's life), to at least have the right to maintain their equity percentage if she ends up doing well and raising more money. Right? Yes?.....  Uh, well, sometimes, maybe not. What's going on here?

  • Maybe she's a first-time entrepreneur and never even heard of pro-rata (this happens a lot!) Her lawyer may not include the term in the funding paperwork. One angel asks her about it and she speaks to her lawyer, who says something like "No, it's not necessary- when you raise future rounds- the VCs won't like it". Or maybe the lawyer says- "No- he's only putting in $25k, this is really for major investors- meaning people putting in $250k or more". Here, the entrepreneur doesn't know any better and might have an awkward conversation with her potential investor: "Sorry, counsel really has advised me against it".
  • Now if that angel happened to be someone like Joanne Wilson (yes, she happens to be @fredwilson's better half), she might respond by saying: "If you don't give me pro-rata- I'm walking" and she might think to herself- (as she elaborates in this post): "That's bullshit". Joanne's general philosophy is:
"I will walk away from a bad document.  I am also willing to walk away if I don't get my pro-rata rights.  Many angels invest in the first round and sometimes they invest again in the second round, and then they are out when round three takes place.  I don't want to be out.  I feel like I took the biggest risk coming in at the very beginning and with that I want to continue keeping my percent of the company that I bought in the first round by continuing to participate (invest) in each round at my pro-rata share.  I am in it for the upside.  If the company is proving to be successful then I want to be rewarded in the upside for my risk."

"Capturing pro-rata” is sooooo important in early stage venture."

  • Or, as @Jason, (prominent angel investor), said in the epic Xmas-Eve Pro-Rata Stream:
"all angels should get prorata, period. if you don't get it you're a sucker."   - jason (@jason) December 24, 2014

My Take:

Of course you should give your earliest investors pro-rata, (if they want it). They are taking the most risk of anyone and should be able to participate in the upside (if there is one). To me this is just honest business. But this advice comes with a warning:

Only let value-add angel/seed investors into your round to begin with (especially in the cash-flush funding environment we are in now). You’ll be rewarded with a cap-table full of productive investors and a reputation as a stand-up entrepreneur.

Scenario: Entrepreneur is now Raising a Second Round (probably a Series Seed or Series A) An entrepreneur is raising his Series A. He had a great group of early-stage investors in the previous round, with fair documentation including, pro-rata rights. Because his company is doing extremely well he's being courted by multiple top-tier VCs. He ends up choosing a term sheet from Fund A that is syndicating with Fund B. The entrepreneur is looking for $3M total, and the two funds agree on a $9M pre-money valuation. Unfortunately for the previous investors, the VCs want the ENTIRE allocation. This means that they want to put in all $3M. They are not leaving room for anyone else. Gulp!

This is the "THEY SAY NO" scenario. You might remember it from this snippet from the opening scene in Gladiator. What now! Guess what- this happens all the time. The entrepreneur is a stand-up guy and wants to do right by his early investors and implores the VCs to allow for some room. So- what are the dynamics?

  • The entrepreneur goes back to the angels and sheepishly tells them there is no room. Yes, they have pro-rata rights but the VCs don't care and having the entire $3M allocation is a condition of them investing. The entrepreneur asks the angels to understand that his hands are tied. Often what happens here is that the early investors are quite understanding but direct their ire at the VCs. 

As @Jason mentioned in the Xmas Eve tweet storm:

"sharp elbow list"  - jason (@Jason) December 24, 2014

  • But what if one of the early investors is actually my fellow Brooklynite, @Jason, and he says:
"people are going to treat you as poorly as you let them; if you're right hold your ground. period."  - jason (@Jason) December 24, 2014
  • The entrepreneur might have to go back to the VCs again and say that some of the earlier investors won't budge. We now have one of these "ugly" scenarios involving what Mark Suster would call #RealPolitik. Here's his tweet from the Xmas Eve Stream:

Not really new normal. Always the case. Each party uses leverage #RealPolitik #Unpleasant  - Mark Suster (@msuster) December 24, 2014

What are potential outcomes:

  • The VCs might cave and open up a few hundred grand for some of the "prominent" early investors, (meaning the ones they want to piss off the least)
  • There is a high likelihood that some of the early investors (smaller checks) will get cut-out
  • The founder may actually decide to "sell" some of his shares to his early investors and "take some $$ off the table"
  • No matter what some people will be angry and these folks have long memories

My Take:

In these difficult scenarios, legal rights actually mean very little. It boils down to loyalties, relationships, leverage and reputations. Things can get ugly and feelings/egos will most likely be bruised. Even the most well-meaning founder can fail to navigate all these opposing interests and people will get angry and upset. There is no easy way through.

My practical advice is that if you are an early-stage investor you should have been absolutely doing everything you can to help the founder all this time. If you're a founder, fight like hell to honor your investors' pro-rata, especially for the ones that really helped you get you off the ground. These are the ones who have truly "earned their pro-rata".

Final Thoughts and Resources:

So you can see that I'm a big advocate of founders giving pro-rata to those investors who want it during the first round of funding. Of course this presumes that you have chosen your investors wisely and done your diligence on them.

In subsequent rounds founders should do everything they can to honor these rights- but when they are between a rock and a hard place- they need to go to bat for the early investors who added the most value along the way.

Some additional posts:

- Here's a humble post on the subject by @semil himself who describes his impressions as an investor relatively new to these dynamics.

- If you really want to understand more of the high-level dynamics and market forces at play with regard to pro-rata rights, simply read this tour-de-force by "Big Sus" himself. As usual, @msuster takes us through the many nuances.

- Aaron Harris from YCombinator has voiced his point of view here

- And Joanne has described one of her unpleasant experiences here

Hacking Diligence




careful and persistent work or effort.



Middle English (in the sense ‘close attention, caution’): via Old French from Latin diligentia, from diligent- ‘assiduous’ (see diligent).


Diligence! It's the sort of word that commands respect. "Be diligent, children", says the kindergarten teacher to us. "Have you done your diligence?" says the trusted friend advising you on the job offer you just received. "Let's do some diligence on this" we investors say gravely to each other after hearing a very impressive entrepreneur pitch her business to us. "I'm gonna do some diligence on this guy," say the founders of a company to each other after meeting a potential investor.

"Diligentia" (in Latin): "close attention, caution, assiduousness, effort, care, rigor, perseverance.... " It's obviously not a matter to be trifled with, right? It also sounds like it should take a fair amount of time to "do well".

While diligence is certainly not a matter to be trifled with, it is a process that often requires some hacking. The startup world moves at high speeds and for better or worse, fundings these days can occur in the blink of an eye. So whatever side of the table you find yourself on, you need to be nimble and adjust to the pace. I can recall a venture fund whose partners I knew well some ten years ago. They would produce 50-100 page memorandums on each investment they were considering. This "analysis" would then be brought before their "committee" before a decision was made. Their diligence process was thorough, voluminous, assiduous, comprehensive..... and relatively worthless. I know this to be true, because that fund no longer exists today. They had no exits. In some ways you could say that they simply moved too slowly, or maybe it was the old "garbage in-garbage out" problem. Perhaps, but my view is that it was their wrong-headed view of what effective diligence is that was the real problem.  Their 'diligence' was essentially "academic", contained deep analysis of the markets derived from "industry reports" and had little to do with the actual strength of the team they were considering backing (or the "ground truth" of the opportunity). More on what I mean by "ground-truth" below.

First, here are my current thoughts on "hacking diligence", (though I'd ask that you add your own views in the comments section below).

  • Entrepreneurs checking out Investors: Don't waste time. This opaque world is now open. Your baseline is "are they for real or not?". After that, you want to know how helpful they are and what value they add. Go on AngelList and find their portfolio. If they don't have one, it's a yellow flag. Get warm intros to their portfolio CEOs, or ask the investor for emails of the CEOs they've backed. Speak to as many as possible. Boom. Now you know.
  • Entrepreneurs checking out potential hires or Investors checking out Entrepreneurs: a) Where have they worked? Call people you know there or find friends who can intro you. b) Get to know them socially over time. Don't confine your interactions to a board room. I love Mark Suster's post on this subject: Lines not Dots, and I share it with my students every year. Lastly- draw your own conclusions and learn how to be good at this yourself.
  • People looking to check out a startup they've applied to join: Get on the greatest tool no-one has ever heard of: https://www.linkedin.com/edu/ It's the tool within Linkedin that allows you to find out who at any given company or organization attended any of the same schools you did. Reach out to people early- even before you apply for the job, connect as "classmate" via Linkedin to folks at the company and invite them out to coffee. You'll get the real story on the company, its culture and dynamics and see if it's sounds like a good fit or not. Who knows, you may even have found a personal advocate.
  • CoFounders: No real shortcuts here, (but hopefully I'm at least helping you avoid some problems). The best hack is knowing them for a long time. Work beside them for several months before deciding to partner. Don't guess. Know their character. Know what they are like in tough times. Among the companies I've backed, probably the biggest, unspoken competitive advantage I've seen has been the trust & loyalty of the founding team towards each other! Boom. Now you know.

Ground Truth:

  • When you hear a true expert speak who is also very much "in the flow" of what's happening today, it's a rare and amazing thing to behold. When you want good advice, you need to talk to someone like this. Want an example? Listen to Stewart Alsop talk in this interview. His are deep insights. That is what wisdom is. He has the benefit of years of historical perspective and he is also plugged-in to the flow of what is actually happening today. He makes connections from what he has seen to what is going to happen. This is huge.
  • When you find someone like this who is an absolute black-belt in their field and knows everything that's happened and that's happening- do whatever you can to stay in close touch! They are rarities. Not surprisingly, they give incredible advice and insight on people, companies, trends and markets.
  • Most bad startup advice or diligence comes from a seeming plausible source. It's someone who knows "enough to be dangerous" and if you're inexperienced- you can't tell, and you give them the benefit of the doubt and you end up listening to them rather than listening to your own gut. One clue: They use the word "friend" too much. Really? How well do they know the people they are "friends" with. Dig deeper.  Another clue: if they are not "in the flow" and are essentially on the sidelines pontificating about a certain technology or a market from a generalized, academic point of view- you are in dangerous territory.
  • Keep in mind that you ultimately have to trust your own eyes. Take in all the inputs, but at the same time never lose your own sense of conviction and insight.

To put a finer point on both 'ground truth' and the 'limits of diligence', let me leave you with some questions to consider:

  1. How in the world can someone who doesn't know the founders understand what you know about them? Maybe you understand instinctively that even if the direction they're going in doesn't pan out they'll be able to figure it out somehow. Who else in the world could know that?
  2. Why do people (investors and others) cling to the fiction that before committing to invest, they have to have a good sense of what's going to happen with a particular team/company? Even in cases of success, they rarely, if ever, predicted how things were going to actually play out.
  3. How can anyone know anything about the real story of a team/company from a power point deck? If that is someone's sole "input", the "opinion" that emerges from their mouth can only be massively limited.
  4. Chris Dixon of a16z recently posted this line from Mike Moritz of Sequoia. It's a great quote to leave you with:
"I rarely think about big themes. This business is like bird spotting. I don’t try to pick out the flock. Each one is different and I try to find an interestingly complected bird in a flock rather than try to make an observation about an entire flock. For that reason, while other firms may avoid companies because they perceive a certain investment sector as being overplayed or already mature, Sequoia is careful not to redline neighborhoods."

Launching the Columbia Startup Lab!


If you hadn't heard- over at my day job as Columbia's Director of Entrepreneurship, our team was proud to recently announce the opening of our Startup Lab downtown in Soho. It's an incredible space built-out in partnership with our friends at WeWork and in true collaboration with our various partners at Columbia's Business, Engineering, Law, SIPA and College and their respective Deans. We currently have 71 young Columbia alums representing all of these schools running approximately 40+ startups in a gorgeous location. Naturally we've layered mentorship, programming and office hours into the weekly operation of the Lab and it's been a great start for everyone. Columbia University, after it's initial beginnings in downtown Manhattan, (at the Trinity Church Schoolhouse in 1754), some 260 years ago, finally has returned downtown with this awesome satellite location. Naturally, it took this massive tidal wave of university entrepreneurship to encourage us to commit to this big move- so all power and credit to the unstoppable force of entrepreneurship.

Enjoy the video describing what's going on:

Also, here are two great links (articlewebsite) if you want to learn more about the emerging companies working hard on their businesses at the lab.

Sometimes Nothin' Can be a Real Cool Hand

This is part of my Series on Entrepreneurial Culture.

There are many occasions in the life of an entrepreneur or investor when bold action is required: Do we make this acquisition? Should we hire this developer? Do we offer them a term sheet? Tweak the pricing? We've all been faced with such critical moments when a decision needs to be made.

In fact, it's very much the archetype of the "decisive man/woman-of-action" that is etched into our collective imagination when we think of the qualities of a successful "leader". Lately an entire science of leadership has sprung up with an army of "coaches", "leadership experts", leadership masters degrees and the like suddenly available to us. Thousands of business books and academic case-studies extol, analyze and critique the decision-making prowess (or lack thereof) of executives and investors in American business.

It's an amazing phenomenon and I certainly don't begrudge anyone who makes a living from this. I have, however seen this stuff poured into more than one executive's head (by people with zero business experience) with dire consequences for their businesses. Bias based on skewed perceptions of "leadership", "action" and their perceived benefits, leads many executives down a mistake-filled path.

Interestingly, amidst all the noise about leadership and action, one rarely encounters stories about the wisdom of “non-action” – the wisdom to defer or to simply say “no”.  Among investors, for example, one rarely hears a discussion of one's "negative portfolio", (the investments that were considered but that didn't get made). Similarly, among entrepreneurs we only occasionally hear stories about the decision "not to hire that guy", or "not to sign that industry partnership". I guess it's just easier for us to talk about things we've actually done as opposed to things we decided not to do, even though our “non-actions” are every bit as important as our actions.

The reality is, sometimes the best move of all is to wait a bit before making a decision. What's wrong with thinking things over, letting it all settle a bit? Why get into this rush-to-action mentality?  Perform your diligence, lend the decision the time it deserves.

If you don’t feel ready to make a decision, the right answer may well be to do nothing. If you’re feeling pressed into a decision, the right answer is probably “no”. Watch some of the great Russian chess grandmasters play and you'll notice how they'll often repeat moves twice in critical positions before the time-control, giving them extra time to mull over a particular committal move.

Watch some seasoned executives take their sweet time when talking to competing companies hoping to hire them. As everyone else drips with sweat, they're the coolest ones in the room. And let's face it, most of the time deals we're working on take much longer than we thought they would. Sometimes they drag on endlessly and tempers get short. The key is not to react to provocations. Stay cool and watch the situation play out, i.e., do nothing.

So although there are times when decisive action is absolutely required- as Paul Newman puts it in the video above, "sometimes nothin' can be a real cool hand".

Brother Mouzone on Respect & the Value of Your Word

(click on this link to play video)

This is part of my Series on Entrepreneurial Culture.

As Chris Dixon has aptly pointed out in a recent post, start-up culture is very much built upon people's reputation and their word as opposed to the transactional/legalistic constructs of corporate culture.  Once the word is out on someone being unreliable, mendacious, mercenary or worse, his/her career in the local ecosystem is pretty much over. Angel, VC, Entrepreneur, Lawyer- it doesn't matter. No one will fund them or want to be funded by them again and they will have difficulty finding people to work with or for them. So whereas this kind of behavior is often ignored or tolerated in corporate environments, the self-regulating "street-justice" of the start-up community is often much swifter.

So if you're just stepping into the entrepreneurial scene, have a listen to the video above (by clicking on the photo) in which Brother Mouzone lets Avon Barksdale understand exactly what's at stake in no uncertain terms. You could tell Avon knew the deal the minute Mouzone stepped into that barber shop. 

As they say in The Wire, "the game is the game".

The Sh*t's Chess, It Ain't Checkers!


Speaking of chess & startups- I thought some of you might enjoy this scene from one of my favorite movies, Training Day, and delivered by one of the true greats, the talented Denzel Washington. (If you're not comfortable with profanity, definitely don't press play.) When you're launching a startup, you've got to have the right mindset. It's competitive out there, everyone and their brother is launching a company these days. Can you really get from zero to one? One important aspect is of course understanding the fact that "the shit's chess, it ain't checkers"! :)

If you just want to hear the "money-line" over and over again- here is a shorter clip:


Update on My New Role @Columbia


If some of you were wondering why I've been so slow on email for the last few months or more likely- where the heck I've been of late- here's a quick update:

I'm happy to say I've recently been appointed as Director of Entrepreneurship @ Columbia University. Our mission is to take the whole university to the "next level" and establish the conditions wherein startups and the culture of startups are encouraged throughout the university. Obviously there's a ton involved with stimulating cultural transformation- but a large part of that is helping cut through all the silos and encouraging the various schools to work towards the same goal. As we all know Entrepreneurship is multidisciplinary by nature and great founding teams by definition are comprised of people with complimentary skill-sets.

In the short time we've been operating we've had great speakers to campus (including Jack Dorsey: video here), tons of events and programming, have launched VC office hours, legal startup office hours, immigration office hours and are planning Columbia's first entrepreneurship festival for the Spring. We've also unleashed an elite layer of startup-school/acceleration for some of our more advanced startups called CSuite. Some heavyweight Columbia alums are helping move the needle for these teams- including Amol Sarva, Inaki Berenguer, Jared Hecht, Brandon Kessler and many others. 

I'm also just so fired-up to be working with some incredibly accomplished colleagues. These guys think big and just make stuff happen:

  • On a day-to-day level I work with Emeritus trustee Richard Witten, a former vice-chair at Goldman Sachs, who really initiated the push for this initiative @ Columbia 
  • Our Board is just incredible: the legendary Bill Campbell, Ben Horowitz, Chris Dixon and others of this ilk to give us direction and advice along the way.

We just launched the website. Check it out when you have a moment and if interested feel free to sign up to receive periodic updates. Follow us on twitter here.

Lastly, I'm still blogging here and still teaching my startup classes at the Business School where I enjoy working with so many talented and enthusiastic Columbia students.

I'll keep you posted as all this develops.

Hope all is well, Dave

@jack during his visit to Columbia. cofounder of Twitter and Square

Be A F---ing Pro


This is part of my ongoing Series on Entrepreneurial Culture. I see people in the startup world being careless, screwing up, cutting corners, making excuses, and worse (a lot worse)- all the time. I'm far from perfect just like the next guy and have made my share of mistakes as we all have. Most of the time I see the little things- but sometimes- and that's when it gets really unfortunate- it's the big things.

Some little things I see:

  • People in the tech world being petty, small, selfish and manipulative - and not helping out the community (translation: only out for themselves)
  • Folks who go into every meeting with an agenda and see the world entirely through the lense of what can I get from this person (translation: robot, non-human)
  • CEO sending out invite for a call to his advisors without checking with them on dates/times. I tell him to use doodle, etc. He tells me he's too busy and whomever's available will join call. (translation: sloppy)
  • Fledgling entrepreneur comes to meet with me, we discuss his proposed business- at end of convo he says, "that sounds like a lot of work". (translation: a joke)
  • Entrepreneurs talking smack and minimizing others (competitors, other entrepreneurs) the first time you meet with them.  (translation: insecure- shows weakness)
  • People intro'ing others to strangers without asking for permission. (translation: laziness & lack of consideration)
  • People with huge problems with their calendar and email. I know some great people that just can't get organized, are always canceling meetings last minute- and are just a train wrecks. (translation: a real shame)
  • People ask a direct question and the person responding evades the question with a long-winded response full of hot air. (translation: pathetic)
  • Forwarding emails clearly marked "confidential" without a second thought. (translation: careless)

Some big things I see:

  • Founding team (first-time entrepreneurs) "goes dark" on their early investors for months and then emerge saying they are shutting down company. They do so with an evasive email full of legalese and nonsense. When called-out on it, they say they were pressured by their lead investor and "didn't know better" because they were "first-time entrepreneurs". (translation: pathetic & corrupt)
  • Junior VC's and Venture Partners taking meetings with entrepreneurs knowing they'll never invest but wanting to gather competitive intel. (translation: jerks)
  • Guys in the startup world hitting on every woman they meet with in professional settings. (translation: deeply uncool and pathetic)
  • Broker-dealer types posing as angel investors that take advantage of unsophisticated/fledgling entrepreneurs. (translation: predatory)

If you do any of the "little things", I highly recommend you stop doing it. It will serve you well in your career. If you do the "big things", well, I've got nothing to say to you other than "take a hike".

I recommend that if you see others doing the little things to call them on it and help them out. If they're doing the big things- I recommend you stay away from them permanently.

There's really no room for this in the startup world. We're a small community and we shouldn't be cutting corners, short-changing each other or worse.

As Marvin Lewis says below- Be A F----'in Pro.

The Supremacy of Warm Introductions

This is part of my ongoing Series on Entrepreneurial Culture.

In the tech world, we hear the term “warm introductions” bandied about ad nauseum, often from the horse’s mouth—namely, that it’s the best and sometimes the only way for entrepreneurs to meet angel investors and venture capitalists. A so-called warm introduction occurs when person A introduces person B to person C with an express endorsement of person B. Person A is basically telling person C that they are vouching for the character and worthiness of person B.

That’s the explicit message, of course. The implicit message is quite powerful as well and can best be expressed by what types of behavior just won’t suffice when it comes to introducing yourself. The short list includes some or all of the following admonitions:

  • Don’t wait in a long line to talk to an investor after she speaks on a panel.
  • Don’t cold email an investor with a long email and business plan.
  • Don’t assault an investor in the hallway with a cold pitch of your business.
  • Don’t email an investor asking for five minutes of his time.
  • Don’t ping an investor on LinkedIn with your pitch and 18 hyperlinks to your deck and press coverage.

Any of these sound familiar? Well, you’ve probably been either on the delivering end or on the receiving end of some of these, if not both. That’s because this sort of behavior is endemic in the business world. These behaviors are all symptomatic of the root problem, which can be summarized as “being lazy and thinking short-term about your human relationships.”

Let’s go deeper.  Are any of these behaviors familiar to you as well?

  • You haven’t heard from someone in years and they reach out asking for you to recommend them to someone. Why? They’re looking for a job now. Typically their email begins with “Hope you’re well, it’s been too long since we last spoke.”
  • Someone you know pretty well makes email introductions to you without ever checking with you first.
  • You receive multiple emails and phone calls from someone you don’t know who insists on meeting with you.
  • They’ve never heard of or respected the habit of a double opt-in

All of these behaviors are the result of deeply flawed understanding of how human beings operate and what they value. They also reflect a rather selfish and opportunistic way of looking at the world. In the age of the internet and social media, it also reflects an immense laziness and amateur approach to connecting with other people.

So let’s get back to this concept of warm introductions. Why are they the sine qua non of business world interaction and the supreme currency of all business networks? Well, at its core, a warm introduction is an endorsement wherein the one introducing is explicitly vouching for the value, authenticity and character of the person, and making an implicit statement that there is mutuality in the sense that he or she is worth the time of the person to whom an introduction is being made. If this currency is abused, the one making such introductions will no longer be respected, his judgment will be called into question, and his reputation in the community will suffer. That’s a pretty high standard indeed. 

To facilitate a warm introduction, first get permission from the person to whom you’d like to make the introduction via a short, crisp email that gets right to the point. If they are amenable to being introduced, here’s an example of what the actual intro could look like:


Thanks so much for your willingness to be introduced to Arthur. As I mentioned, he is a veteran business development professional who is looking to join his next venture. Given that your company is right in his sweet spot of enterprise security, I thought it would be good for the two of you to meet.

I worked with Arthur for four years at -------- and can’t say enough about his effectiveness and work ethic.



Notice I asked for permission first in an earlier email, and then in the actual introduction I reminded Liz of some of the details about Arthur. I also expressly vouched for Arthur once more. I didn’t go overboard, but kept it short and sweet while still hitting all the relevant points.

So who are people that often receive and give warm introductions? Here’s my take on what qualities they typically possess:

  • They value human relationships and are in business for the long haul.
  • They are exceptionally thoughtful about who they introduce, how they introduce and to whom they introduce, always looking to provide mutual benefit.
  • They are open to helping out quality individuals and giving of their time.
  • If they want to get to know someone, they do it in an authentic way and are out to build a relationship, not just to consummate a transaction. This might involve spending time commenting on the person’s blog or Twitter feed, inviting them to an event as a speaker, or to a breakfast, lunch or dinner gathering that might be of interest to them .
  • They don’t finish every meeting they have by saying, “My takeaway is…” or “What are the next steps?”
  • They respect other people and don’t take advantage of others or of their time.
  • They don’t look at people as a means to an end.
  • They have integrity.

Apart from capital, warm introductions are literally the most important currency in business. They get people jobs, initiate partnerships, help people raise funds and can often make an extraordinary positive difference in people’s lives and the lives of businesses. When they are made carelessly they can literally be devastating. If you think about it, it was a warm introduction that probably got you into most of your jobs, most of the capital you’ve raised, and possibly even how you met your spouse. Treat the whole process with great thoughtfulness and care—it will make a huge difference in your career.

(Click here for the original post on Amex OPEN Forum)

Boston- Home to the Toughest Mother------s I Know

I wrote this last week in the aftermath of the terrible happenings in Boston and dedicate it to the great people of Boston who I came to know and love when I lived up there (after something of a rough start).


Having grown up in Brooklyn in the 70's and 80's, I'm no stranger to rough and tumble environments. My brother Chuck and I have a lot of stories to tell and we've seen and been through a lot of scrapes together. For us the New York of today and frankly, any other city we lived in or visited always seemed like a cake-walk compared to the Brooklyn of our youth. We're not careless or cocky by any means- but we consider ourselves pretty street-smart to put it mildly.

While in college we had one incident, however, in Boston, that made us blink a bit. We had a rugby game against MIT and made the road trip from Williams across the Mass Pike. It was our first time in that city. On the way there everyone was joking that we were going up against some eggheads and PhDs. Boy were we wrong. The MIT side was stacked with the baddest, toughest grad students- a bunch of ringers from New Zealand, Australia and South Africa. They were all grown men and were miles ahead of us in talent (and on the scoreboard). Sure enough a (now legendary) brawl erupted that was only broken up by the police that drove onto the field with paddy wagons. We had brought 3 "sides" as is said in Rugby- meaning we had our A, B, and C teams there as did they. There must of been 60 combatants on the field at the height of it all. In the end we had multiple people go to the hospital with broken ribs, black eyes, stiches as did they.

A few hours later we were all in their fraternity house singing songs around a bunch of kegs.

They were some tough mother-------.

Anyway, the years went by and those memories faded some. The feeling I'm sure I still had was that nothing could compare to our early days in Brooklyn.

That impression all changed for me, when years later I was running my first company and we decided to expand to Boston. It was a healthcare company and we were already in NY, NJ, Florida and now we were going north. I had my eyes opened again- real quick.

In my first few days there, a Boston trooper (known locally as a troopah), pulled me over. I was driving a Toyota Corolla that I had driven up straight from Florida and all my personal belongings were in boxes in the car. The Florida plates probably caught his eye. He was friggin' huge and took my license and registration and didn't even say hello. When he returned from his cruisah he bellowed this to me in thickest Boston accent you could imagine:

"Mr. Lernah.... yore a pedestrian"...

I didn't know what he meant and politely asked him what he meant. He then bellowed the following:

"Mr. Lernah, get the fuck out of youah cah right now- yore a PEDESTRIAN"....

I got the fuck out of my car real quick- now I understood. He then told me that my registration had "expiahed", gave me a ticket and returned to his squad car. Minutes later a tow truck pulled up and started to jack my vehicle as I furiously removed about 20 boxes full of all my wordly belongings onto the sidewalk. As they towed my vehicle to parts unknown- I walked up to the driver's side window of the officer's car and politely began to ask where I would be able to pick up the car at which point he drove away without saying a word. He had never removed his wrap-around sunglasses.

He was one tough mother------

A few nights later, I regret to say that I was involved in a very bad melee at a famous Boston establishment (name withheld for security reasons) wherein I broke my hand and lost a knuckle. I know multiple people were hospitalized. I am not proud of this- but there was really nothing I could have done different. The reason for the brawl? Interpretations of a rule around a game of darts some of you may know called Cricket.

They were some tough mother-------s.

Our facility up there was affiliated with Partners (MassGeneral, Brigham & Women's and Dana Farber Cancer Center). They were the ones who had asked us to open a center in Boston so we could help treat their patients. But when one of our doctors went on a local TV station to complain about how BlueCross BlueShield were not paying their bills, those administrators at MGH called me on the carpet and chewed me up one afternoon that I'll never forget. All the faux refinement they had exhibited during their courtship of us months before disappeared in a flash and they dressed me down with more F-bombs than I'd heard at the pubs. They told me they were going to be "all ovah youah asses" from then on and wouldn't hesitate to rip-up the "fucking agreement" we had.

They were worried about BCBS because BCBS had called them and actually threatened to stop paying MGH!

BCBS and MassGeneral were some tough mother-------s.

Then there was the time Medicare stopped reimbursiung us, period. Stopped cold turkey. This is after the Medical Director of Medicare of the State had sent us a signed letter BEFORE we opened the facility in Massachusetts telling us that Medicare would reimburse us for our services to patients. He renegged.  We went at him hard. He didn't back down for the longest time.

He was tough mother------, but also was just an _______. (fill in the blank) :)

Oh and how about the war of the red tickets with the lovely metermaids of Boston? And that landlord that gouged the bejesus... ok, ok, that's enough!

A year or so went by. I dug-in. Winter lasted what seemed like 6 months up there. I walked to work along the Charles River and cursed my lot every morning. The wind just cut you into little pieces. Then a massive snowstorm hit in April I believe, I can't remember. I do remember barely being able to open the door to my basement apartment against the snown and thinking- "it's not worth going to the clinic- no one could possibly be there". But against my better judgment I trudged thought the tundra, finally arrived, unlocked the place and collapsed on a waiting room sofa, exhausted. After some minutes I heard someone calling my name. It was one of our oldest patients- she may have been 85 years old, white spindles of hair tucked back in a pony tail. I was blown away. She'd somehow come all the way up from a town way south of Boston- somewhere along the South Shore. I'll never forget the sight of her standing there in her little boots and heavy winter coat. She was so determined and earnest and wanted to get better. Nothing would get in her way.

Anyway- I couldn't imagine how she had made it to see us. Needless to say one of our team was able to come in and treat her. There was no way she was going home without being treated. I would have done anything for her.

She was one tough lady.

And then there was our office manager. God bless her- we're still in touch all these years later. Salt of the earth from Braintree- had been a patient of ours and then anchored that facility there in Boston for all the years we operated. Answered the phone, talked to everyone- knew their life stories, hosted-em when they came and went, stayed in touch with-em, did anything for 'em... just the best... never late, never sick, never down though she'd seen the roughest of times and had had some really tough luck through the years- just the best of the best- had your back through thick and thin.

She was one tough lady and I'd do anything for her or her family.

Yep, and that's sort of how it went. Four years up there.. got to know-em real well. Our patients, the therapists and docs, regular folks from all walks of life from Southie to Marblehead, the chess community, the Russian community and on and on... and over time- little by little, they took me in and we warmed to one another- with a little cussing and frowning, some punches thrown here and there, and finally some drinks and good times. When it was time for me to leave I didn't want to go.

I had developed this feeling for the place, something for this toughness and character I was seeing all around me. Over time my initial resentment just melted away somehow into deep respect.... and dare I say it- even affection... that grudging affection you develop for an opponent in a fight who gives and takes no quarter....

And then this damn thing last week. Good G-d how they responded to it! They were all over it in seconds- I heard the Chief of Police talking about it in awed tones. Regular Boston folk were running towards the explosions to help, applying tourniquets with their shirts, their jackets- their bare hands in some cases for goodness sake... and they didn't stop there.... from the people in the streets to the guardsmen and soldiers there, to the bus drivers who stayed to drive runners to safety, to the docs and nurses in the hospitals to the police and the EMT's, to the people opening up their homes to strangers, to the people using their camera phones and twitter- all the way down the line everyone was helping, and of course all the cops on the front lines shooting it out with the two brothers toe-to-toe taking on hand-grenades and hundreds of rounds... and all the way up to that moment when a guy was out having a cigarette and spotted someone "covered in blood crouching low in his boat".

My heart goes out to everyone up there, especially to those who've lost loved-ones and have had loved-ones maimed for life. I am in awe of how Bostonians banded together, helped each other and endured this and how relentless they were in hunting down these killers in their midst.

Boston- you are one tough mother-------, and you know I say that with great affection.

Measuring Founder Strength

This is part of my Series on Entrepreneurial Culture.

I recently came across this absolutely awesome post as well as the accompanying infographic above having to do with identifying the sort of founders investors can feel good about backing. It was written by Saar Gur a partner at Charles River Ventures.

Saar points out that his fund has developed an IQ-like quotient (the "Founder Quotient") for determining founder strength after many years of tweaking and refinement.  A number of these insights may in a broader sense be similar to others we've seen over the years, but if you go through them carefully you'll find a lot of originality and nuance here. The line, "startups are like chess" and the "Values" section resonated with me in a huge way. I think angel and seed investors would do well to really pay attention to these and add them to their body of knowledge. Here they are:

  1. Original product thought. Most founders copy. We look for the 1 percent of founders who have their own original strong views on how to build a great product (e.g. it took a Steve Jobs to set the touchscreen standard for smartphones).
  2. Psychological factors. What drives this person? Are they driven to face the adversity and uncertainty of startups? Do they have a chip on their shoulder and/or something to prove? Do they have a strong desire to win? Are they willing to make the sacrifices required to succeed? This is often influenced by their childhood.
  3. Authenticity. Does this company align with the founder’s beliefs and values? Do the founders care deeply about the problem they are working on? How passionate are they?
  4. Unique market insight. Do they have a unique insight into what the problem is, market timing, how the future may play out?
  5. Intelligence. IQ, EQ, self-awareness, ability to hold convictions loosely, etc. Startups are like chess. The founder needs to be able to think several moves ahead as it relates to product decisions, business decisions, and people decisions.
  6. Values. Are they honest? If they are in a people-intensive business, do they genuinely like and value people or are they too focused on themselves?
  7. Judgment. Product judgment, people and hiring judgment, etc. Do they exercise good decision-making skills no matter how small or large the decision?
  8. Experience. Are they uniquely capable of executing? Do they have a relevant 10,000 hours?
  9. Ability to recruit. Includes selling a vision, being respected, build a cross-functional team, having a network, etc.

The entire "Values" section, though short, is actually massive. I've made this mistake a couple of times already. People too focused on themselves don't really value other people at all. Huge problem with a founder.

Figuring all this stuff out takes time, doesn't it? It's a good argument for not rushing into an investment. I'll also add that checking out a list is something anyone can do- but being able to "know something when you see it" takes a lot of experience. What also never ceases to amaze me is that a founder you might want to invest in might have all of the above qualities save one, but it's often that one missing piece that destroys everything. 

Anyway, many thanks to Saar for sharing some serious wisdom with us. Wow.

Entrepreneur Survival Guide: Some Motivation, Courtesy of Uncle Nikolai

This is part of my Series on Entrepreneurial Culture.

"I tattooed 'survive' on my hand the night before I went away to prison. And I did. We do what we have to do to survive..."
Uncle Nikolai (25th Hour)

I've posted here about how to deal with massive and unexpected knockout-type punches as an entrepreneur. But there's another type of dangerous threat to an entrepreneur's well-being and survival:

It is the phenomenon of interminable waiting.

You see, entrepreneurs are always in perpetual motion, hurrying from one task to another, taking calls, having meetings, raising money, cajoling, selling, emailing, tweeting, blogging, hiring, partnering, selling some more, stressing, exhorting others, and so on and so forth. To the outside world it all seems like a dizzying whir of movement. Less visible is the fact that this is exactly how the entrepreneurial species waits. Waits? Waits for what exactly?

Think about it. You know what I'm talking about. It's that internal clock we have ticking inside that's coldly tracking the next milestone in our business amidst all the apparent chaos: private beta, first product release, first customers, first investor, Series A, hitting break-even, that big partnership, that first million in revenue, that first bad-ass hire, that first good piece of PR, that first big spike in traffic, and on and on. It never ends. We feed off of it- we live for it.

The problem is, most of these major milestones seem to take forever to materialize. There are always delays, endless obstacles, issues, difficulties, crises that delay our progress. We're fighting inertia, indifference, short attention spans and it's inevitable that moments arrive when our resolve, our will, our morale and in many cases our cash begin to melt away. That internal clock of ours so intent on progress gradually goes haywire and all this interminable waiting begins to cause despair. Thoughts of capitulation slowly creep into our minds...

How we handle and see our way through these moments define who we are as entrepreneurs and whether we survive or die.

That's why I recommend you rent and then watch a certain scene in 25th Hour several times. It is the scene in which Uncle Nikolai describes to Ed Norton's character how he survived through his toughest moments in life. (Norton's character is facing seven long years in prison.)

Sometimes we entrepreneurs need some inspiration and encouragement and this scene will fire you up if you are out there now giving it your all- trying to survive. Let me know what you think.

выжить = survive   :)