Key Ingredients for founders dealing with the Covid-19 situation

In the last ten days, when COVID-19 really hit the western economies, I talked to a large number of excellent founders. Some of them were devastated because, despite the extremely good work they have done for years, an external and uncontrollable event is threatening their venture within a few weeks.

During those days, some of the long-established Venture Capital firms that had gone through several crises produced (or updated) great posts on how founders should adapt their startups quickly to the new financial landscape.

However, the more posts I read, the more I was missing advice on how to change the founder’s mindset to a new reality, that might last for years. Entrepreneurship is, by definition, a lonely game. It is the art of making possible what other people think is not; it is the art of defying the odds. So, in these days of uncertainty, more than ever, founders need to be as mentally strong as they can get. …


Ownership is a means to retain the founders

In the startup jargon, the term “ownership” refers to the percentage of the company that belongs to its founders or any other shareholder. In this post, we will explore how much ownership founders need to maximize the potential of their ventures. We will answer the question “how much dilution makes sense for a founder of a venture-backed startup?”

Source: Index Ventures (https://www.indexventures.com/rewardingtalent)

Founders’ ownership not only matters to entrepreneurs, but it also matters to savvy investors. Why? Because it helps to align the interest of investors and founders and incentivizes founders to stay in the company throughout the whole journey.

Ownership as a mean to retain the founders

When we assess an early-stage investment opportunity, among other criteria, we analyze the “Founder/Market Fit”. We evaluate how well equipped the founding team is to capture a (new) market opportunity. The team doesn’t need to be an expert in that market, but it definitely has to be an insider of the problem it is solving. …


El Coste de Oportunidad es la alternativa que tiene un fundador

En la jerga de las startups, cuando hablamos de “ownership”, nos referimos al porcentaje de la compañía que está en manos de los fundadores o de cualquier otro socio. En este post, vamos a explicar por cuánta dilución tiene sentido para el fundador de una startup de alto impacto.

Fuente: Index Ventures (https://www.indexventures.com/rewardingtalent)

El “ownership” que tiene un equipo fundador no solo les atañe a ellos, también importa a los inversores más avezados de VC. …

About

Andy Areitio

Partner @TheVentureCity. Previous ventures: @BuyFresco, @Suprachef. Education: @INSEAD, ICADE, and a few failures ;-)

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