Early-stage valuations for startups are hard to understand because typically there is very little traction or data to go on in the first year or two of a startup.

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Startup valuations are not science, but they’re not magic either. …

Exterior, San Francisco’s SOMA district, two nerds, walking briskly. Tents, traffic, and garbage — everywhere.

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Founder, excited: “JCal, I just got some advice from an advisor that I should call my first round of funding a ‘pre-seed’ round so that the optics are clean when I go for my Seed Round and Series A…”

Angel: “Hmmm…”

Founder, more excited: “you knowin case I don’t have product-market fit and investors think we’re a zombie startup… trapped between our Seed and Series A funding.“

Angel: “It’s irrelevant, all of it.”


Nobody can predict the future.

Everybody can tell you what’s possible.

The art is in knowing what’s probable.

I’ve spent the last 10 years investing in startups, half that time as a hobby and half that time as a career, and in that time I’ve learned that most people are scared, little aliens.

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All day long I ask people what they want to happen in the future and what their plan is to make that vision materialize, and the bold and true of heart answer these questions without pause. They have studied their market, talking to customers and doing competitive intelligence on incumbents. …

Got a lot of feedback on my post on “How to find a co-founder” yesterday, including founders asking me how they can resolve conflicts with their co-founders.

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This is one of the hardest questions for me to answer because conflicts are so situational, often personal and if they are hard to resolve they are often complex with multiple resolution paths.

Before we talk about the conflict at hand, we need to look at the founders themselves and ask, are these emotionally mature founders who are self-aware? Most of the founders…

If you’re a first-time founder, you probably want to have a co-founder or two to lean on.

The second most frequent question I get from new founders, after “will you give me $250,000?” is, “do you know a technical co-founder?”

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If you can’t find a co-founder for your startup, you’ve disqualified yourself as a fundable entrepreneur, because who in their right mind would back someone who can’t convince just once talented person to join them on a crazy journey?

Finding a co-founder isn’t easy, but it’s not the hardest thing…

In July I wrote a message to my founders, warning that things could get choppy, titled “This is your Captain speaking, I’m turning on the fasten seat belt sign.”

Well, this is your captain again, and we’ve got turbulence ahead so I’m canceling drink service and asking everyone to check your seatbelts.

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On the day I wrote the last piece the NASDAQ was at 7,932 (July 25th), and over the next couple of months, it crashed over 20% to 6,192.

It’s since recovered to ~7,000.

I spent 10 years living in Los Angeles, traveling up to the Bay Area every other week, sometimes weekly, to do angel investing.

During that time I learned that SFO is a complete disaster, with Karl the Fog creating all kinds of trouble. Also, I was frequently missing flights with insanely unpredictable traffic patterns in L.A. and the Bay.

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When I made a little cheddar, I started treating myself to the fully refundable Southwest Premier tickets, you know the ones, that let you board first and take the aisle seat…

Yesterday I wrote the first piece in a three-part series about how Facebook could turn around their “WORST. YEAR. EVAR!!!”

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The basic premise: share revenue with publishers, Instagrammers/influencers, App developers and anyone else creating content on the platform, just like YouTube, Airbnb, Apple and Google’s App Stores and countless other partnership platforms do.

Right on cue, Facebook does the most misguided, heavy-handed and unsustainable version of sharing the wealth, by sharing $100m a year — .3% of their yearly revenue — in a series of grants.

The cynical take is…

Facebook’s self-inflicted wounds come from their founder’s obsession with growth, which at its core was based on three extraordinary tactics: removing friction, staying focused on global growth and stealing other people’s ideas.

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There is no debate over this.

If Zuckerberg had not set the tone of “move fast and break things,” the company would have been more thoughtful about their growth, and if they didn’t steal other people innovations so systematically — from Friendster to FriendFeed to Twitter to Snapchat — they would never have dominated the planet.

Of course…

Yesterday’s post mocking the New York Times’ link-baiting story created a lot of debate on Twitter.

One thing that came up was, why don’t venture capitalists fund slower growth startups? Or, said another way, why don’t VCs invest in startups that grow at a normal pace?

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The number one job of a venture capitalist is to stay a venture capitalist.

This might sound cynical but, as a VC, if you don’t return enough money to your LPs (limited partners, a VC’s investors) you will not be able to raise your…


I angel invest in awesome startups... and try to build them myself. Be excellent to each other.

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