Good day

The other day was a rough day.

One of our companies failed to find a buyer and let all their employees go.

Over dinner my dear friend Joey Hundert provided support and counsel while reminding me that as entrepreneurs our lives are full of peaks and dips.

He assured me it’s okay to be genuine in the emotions we feel when companies fail. And I was sad and disappointed.

Then yesterday I was reminded of the emotions when companies succeed.

And that is being proud of our entrepreneurs

  • Ryan Feit of SeedInvest (where I sit on the Board) and Jan Goetluck of Virtuix (where we are also investors) were on Jim Cramer Mad Money.   They were promoting both equity crowdfunding and the disruptive VR technology as they partner to raise one of the first Title IV of the Jobs Act deals from both accredited and non-accredited investors.

And just like that four of our entrepreneurs remind me of why I love what I do.

Yesterday was a great day.

Good day

How I Make Sure Work Doesn’t Ruin My Vacation

Here’s the scenario: you have a vacation coming up in two weeks. You should be looking forward to it, imagining yourself letting stress melt away under the sun or on the slopes, but all you can think about is the work that will pile up while you’re away. You might even feel like skipping the vacation just to save from all of the stress that comes with leaving the office. But we all need a vacation sometimes, it just takes some minor, but strategic planning to get you in a vacation state of mind.

I thought about writing this post because, as I type, I am on my annual family getaway in Wellfleet on Cape Cod and although I am periodically checking my email, I am getting some much needed relaxation and quality time with my kids. Whether you are an executive or an intern, I thought sharing my own tips could be helpful for those of you going away this summer. Here’s the plan I follow, with the severity depending on the length and location of the vacation:

1) Let essential colleagues and employees know at least 2 weeks before the vacation

No matter what your position is, there are people around you who will need to know that you are going away. At Scout, we make sure to add the vacation days to the master calendar as soon as possible, even if they are still tentative. I make a habit of clicking through the calendar every so often to see if there are any absences added. By knowing ahead of time, your employees and colleagues have time to prepare for your absence and aren’t suddenly surprised and stressed by the extra work they may have. I would also recommend having a short meeting every six months or so to go through the entire calendar with those immediately above and below you so you can let each other know about important dates like weddings and family vacations.

2) Create a buffer

The goal is to make sure your vacation state of mind starts a little bit before you’re actually on vacation. I make an effort to create a barrier between work and vacation by not working the day before I leave on a long trip. This way, work will be less likely to leak into the first few days of vacation. I recommend getting loose ends tied up a few days before leaving. You will feel much better if you do not have tasks lingering over your head the day before leaving or the entire trip.

This extra day before also lets you pack leisurely so you are less likely to forget something. It also allows you time to double check your travel itinerary to make for stress-free travel.

3) Make sure everyone knows their role

Face it – there is always going to be something important going on while you are away and it is impossible to tie up all loose ends. To make sure you are not micro-managing from the beach chair, delegate important tasks to the appropriate people. Make sure they know the task and have all possible questions answered before you leave.

4) Set boundaries

This might be the most difficult task of all. Before you leave, you have to decide how much time you are comfortable with spending on work (hint: not a lot, this is your vacation) and then letting your employees and colleagues know. Before I left for the Cape, I let everyone know that I will be periodically checking my email (a half hour when I wake up and a half hour in the evening) but that I did plan on taking a break and taking the R&R that I needed. Of course, emergencies can happen so let everyone know the best number to reach you and the contact information of where you are staying but otherwise, they will respect your much needed time away.

After all, a relaxed boss is the best kind of boss.

How I Make Sure Work Doesn’t Ruin My Vacation

Is your Venture Capital Firm Having an Identity Crisis?

Imagine this: you’re in front of a nervous young entrepreneur pitching their idea for the next Uber.  They are a first time entrepreneur whom you met at a cocktail networking event, an event you didn’t even want to attend.  They are trying to convince you that their $10 million dollar valuation is warranted.  Yet, they have no idea what a cap table is and no idea how they are going to monetize their business.  You are so tired of asking the questions they should have already answered.

And then you ask yourself: how did I get here? Why did I even agree to take this meeting?

Sound familiar?

You might need to take the same advice that you’ve given to your entrepreneurs: take some time and figure out what your specialty is and what you want to focus on. For VCs, this implicitly defines your investment thesis.

As most of you already know, an investment thesis is the formula of beliefs and criteria used to determine what investments to pursue and why.

What We Look For

From the very beginning of Scout Ventures, we’ve put heavy importance on figuring out who we were as individuals and who we wanted to be as a firm. As the Founder, I knew I wanted to build a firm that explored how technology enables consumers to connect “digitally” and then leverage the ubiquity of connectivity, viral distribution and social networks to experience exponential growth in their audience and/or monetization.

Investment Thesis 5-18-2015

Putting it in Practice

In order to explore and leverage these ideas, I knew we had to:

1) Put a process in place that would lead us to discover and invest in the best entrepreneurs and companies that fit with our own backgrounds and expertise, and

2) Figure out the best way we as a firm could then help these entrepreneurs and companies to evolve and grow into their potential.

Let’s talk about the process first. Over the past few years, we have established what we call ‘filters’. We refer to these when deciding to take a meeting and when we are considering investing. It is important to apply consistent filters across the board; for example, we know we don’t invest in HR based companies, so we would politely decline a meeting with one. Be sure to keep a growing list of filters to refer back to.

At Scout, we’ve identified over forty parameters that we use to evaluate a deal. These parameters range from highly quantitative statistics such as MRR and burn to more qualitative aspects such as founder balance and market structure dynamics. Through introspective analysis and reviewing our 55 investments, we have been able to develop pattern recognition techniques that identify what specific characteristics exist across our most successful portfolio companies.

If you are not established enough as an investor to be able to decide these from your own historical data, then start with qualitative filters. For example, we prefer to invest in seasoned entrepreneurs and in teams who we were introduced to via a trusted advisor, entrepreneur or friend.  Through the use of simple filters and parameters we make sure we don’t take on too much, don’t take on anything where we do not feel we can add value and most importantly, we make sure stay true to our investment thesis. 

If you are a new firm, don’t stress over this too much. It has taken years to truly establish our current base criteria for taking a call or listening to a pitch and deciding to invest. And don’t forget, your thesis and filters are also something that should be constantly evolving.

Investing More Than Money

I like to think that most VCs don’t just stop at finding the entrepreneur and writing a check. But that’s not always the case. Ever since I started investing years ago, I always found the most rewarding part to be what happens after the check has been written, and I’m not just talking about the potential monetary returns.

One of Scout’s key activities is adding value to those we invest in. We don’t just invest money; we invest time. We start helping the entrepreneur from the minute they walk into our office. When we feel that immediate connection and know that the chemistry works between our team and the entrepreneur(s), we’re already at work thinking about what we can do to help. The first thing we’ll do is open our rolodex and introduce them to people we know can help them in ways we might not be able to.

At Scout, we are entrepreneurs. Our venture just happens to be a venture capital firm. Because of this, we know first hand what struggles entrepreneurs are going through and will go through. And when we help you, we are not only taking into consideration our own experience building the firm, but also taking trends from the data we’ve collected on our 50+ investments. We’ve seen it all.

In summary, if you think your firm needs a thesis overhaul, or even the creation of a thesis, be sure to base it on what your team is passionate about but also on what is practical for the size of your firm and fund. After all, this is how you differentiate yourself from the ever increasing number of firms. The entrepreneurs you attract and invest in will mirror the quality and authenticity of your thesis, so don’t rush it.

Is your Venture Capital Firm Having an Identity Crisis?

The Importance of Responding to Email

There’s been a lot of discussion lately about the proper use of email since the Sony – North Korea incident.   In fact, Fred Wilson and one of our co-investors Gotham Gal got wrapped into the drama and Fred shared some great advice on limiting what you put in email.

I’ve been spending the last several years trying to examine how I interact with email and determine how this impacts my relationships, potential liability and in general, my communication skills.

It’s important to note that from my West Point and military background, it’s been ingrained that that you should always properly follow up with people whether that’s returning phone calls or emails.

I try to bring the same level of discipline to my work life.  While at AOL, I found it invaluable to always send a note and tell someone how nice it was to meet them.  This has served me extremely well and enabled me to build a very strong network of people in media and tech – many of whom have ascended to C-level positions.

Unfortunately, the flow of information is too much.    I’ve turned to tools such as SaneBox (thanks to Tom Katis) and (thanks to Ari Meisel).

While these tools help unclutter my inbox, I still try to invest the time into responding to entrepreneurs.  As an entrepreneur, I know how tiresome fundraising can be so I try to exercise mutual respect and respond.    Sometimes the inbound email doesn’t make it through SaneBox, so if I don’t respond, I might not have seen the email.

I think it’s important to touch on a point that Fred made in his post, which is that everyone should consider their emails as public information.   Whether you get hacked or not, if you limit what you write in email, you will be thankful in the long run.   I find this to be especially true when dealing with a legal matter, HR or any sensitive subject.  In most cases, its better to just pick up the phone.

The Importance of Responding to Email