Here’s why it’s a terrible idea.

Investors can tell—and it kills trust immediately.

When you’re raising capital, authenticity is everything. Investors aren’t just evaluating your product or market—they’re evaluating you. They want to know how you think, how you communicate under pressure, and whether you’re the kind of person who can navigate the chaos of building a company.

AI-generated emails are polished, sure. But they’re also generic, sanitized, and soulless. They lack the rough edges, the personality quirks, and the genuine voice that make an email memorable. When an investor reads something that feels like it came from ChatGPT, they can no longer understand what is really your level of competence vs. what you prompted the algorithm to say. One of the things we look for at 1517 is hyper-fluency. This means a founder is able to move up and down the knowledge stack and be able to communicate often times technical details and product features in a way that anyone can understand. This level of communication mastery is extremely important for building a business. With emails that are AI generated, we can no longer track for this trait and often end up getting a load off slop we have to sift through. There's a lot of things behind the scenes that we're looking for. Not just information and the answer to our question.

Your writing reveals your thinking.

The way you structure an email, the details you choose to emphasize, the questions you ask us or how you answer ours —all tell an investor how you think. Are you concise or do you ramble? Do you lead with the answer or bury it in the third paragraph? Can you distill complexity into clarity?

These are signals about how you think, act and ultimately run your company, how you’ll communicate with your team, and how you’ll make decisions when things get hard. AI can’t replicate that. It can mimic structure, but it can’t show your judgment.

Fundraising is about building relationships, not optimizing conversion rates.

Too many founders treat investor outreach like a marketing funnel. They think if they just A/B test the subject line or use the “right” language, they’ll get more meetings. But that’s not how this works.

The best investor relationships are built on real conversations—not perfectly crafted pitches. When you use AI to write your emails, you’re optimizing for the wrong thing. You’re trying to sound impressive instead of being real. And investors see right through it. I see over 100 new pitches every month. If I need to spend cycles trying to figure out what is “real” vs. what is AI slop, then I’m more than likely just going to skip to the next email in the stack. The antidote to this is authenticity. If I can sense real human context it give me something to connect with. At the end of the day, as investors, we are with you for the long haul. Which means that we will be working with you for years - through the good and bad. WHICH MEANS → We are looking for the people we WANT to work with. The only way to know this is by getting to know you and who you are.

It’s lazy—and investors notice.

Here’s the hard truth: if you can’t be bothered to write your own investor emails, why should an investor believe you’ll do the hard work required to build a company?

Fundraising is grinding. It’s hundreds of emails, dozens of calls, countless rejections. If you’re outsourcing the communication part to AI, it signals that you’re looking for shortcuts. And investors don’t back people who take shortcuts—they back people who are willing to do whatever it takes. Understand the game, figure out how to optimize what you can, but don’t sacrifice speed for soul.

Your story is your edge—don’t let AI flatten it.

Every founder has a unique story. Maybe you dropped out of school to build this. Maybe you’ve been obsessed with this problem for years. Maybe you have a contrarian insight that no one else sees.

That story is your competitive advantage in fundraising. It’s what makes an investor lean in and want to learn more. Its about the journey of learning more, about the founders story, their personal “WHY”, and about why they are the perfect person to solve this problem. AI can’t tell your story—it can only approximate it at best. And approximations don’t inspire people to write checks.

Bottom line: Write your own damn emails.

If you want investors to believe in you, show them who you really are. Be direct. Be honest. Be yourself—even if that means your emails aren’t perfectly polished. As a ex-founder that ran 4 separate fundraising processes - fundraising is a process where the cost of doing business is TIME. Thats what you pay in. The shortcut is authenticity and real connections. Don’t forget it.

Investors aren’t betting on your ability to prompt an AI. They’re betting on you.

A founder had taken the time to read another one of my posts about the journey of my time as a founder and leader of my last company. After sharing this with me during the first 5 mins of our call, she then asked me, “Do you regret anything?”

After a brief pause, I realized something that I have thought often about but have never had an opportunity to speak on directly. I realized that I do not believe in regret.

Regret: noun

1. a feeling of sadness, repentance, or disappointment over an occurrence or something that one has done or failed to do.

Let me explain.

The basic principle that I now adhere to is that regret, or the feeling of regret, or the emotional charge that surrounds a certain event that could trend towards sadness or disappointment, as the definition above suggests, is my opinion simply unprocessed experience. An experience that has not been critically examined for its lessons - inside of which wisdom can be harvested. What I am describing here is a process that does require conscious work and an investment of time, but the reward of this work is a deeper capacity for skillful navigation of life and each of our relationships.

Every experience often comes as a package deal. There is the experience itself, what happened, and then there is the emotion, or how we felt about it. It’s often quite challenging to realize at first that the emotion, or how we feel about something, is carefully overlaid on top of the objective perception of what happened. Realizing and accepting this is the first step towards harvesting wisdom.

How we feel about something is completely subjective. That is two people can witness the same experience and come away with feeling two completely different and sometimes opposite things. It therefore follows that how we feel about something is a perception, which luckily, falls under our control in our ability to change. When we experience something undesirable, consider the first emotion to be a reaction to that experience, nothing more. If we adopt that emotional reaction as truth and fail to update it later through reflection then we truly are at the mercy of life, we are a victim to our circumstance. For example, we have all had experiences that didn’t go to plan or conversations where we didn’t like the version of us who was speaking. Sure, it’s possible to look back on an experience like that and feel disappointment in an outcome or a behavior but this leads us very close to the line of wallowing in self-pity.

What is the point of having life experience at all? What is the point of action, reaction, cause and effect, choice and consequence? I would suggest that it is simply to provide the raw materials for us to grow. Change, as we know, is constant. Circumstances change, those changes create new experiences and those new experiences allow us to experience ourselves differently. They create emotion and awareness that work together to show us more about who we are at that moment. The contrast between the person we were before the experience and the person we are after presents a unique opportunity for personal reflection. A moment to realize that we are not the same person now and if we are paying attention, for us to update this understanding of ourselves. To realize that what we were feeling back then doesn’t have to be what we are feeling now. While we may feel disappointment or sadness in the moment at witnessing how we lost what we wanted or missed the mark around expectation, the bigger tragedy is not realizing that we can learn something profound about ourselves. This is the opportunity to convert raw emotion and experience into wisdom.

For the sake of this thought experiment let’s define wisdom as the ability to update one’s perceptions of self, other, or circumstance to a more close approximation of truth. A truth of knowing oneself more deeply and thus being able to more skillfully and gracefully navigate the vast multitude of life events.

Perhaps it would be helpful for me to share a personal experience. I started my first company at twenty-two. Over the next eight years, I was able to find product-market fit, raise around 8MM dollars, and scale our business to around $250K/mo in revenue. We had our best quarter one month before COVID hit the US and new regulations severely impacted our company’s top-line revenues. I spent the next year and a half trying to sell off a business that was bleeding cash and while ultimately successful, the proceeds barely covered legal costs.

At the time this was all happening, I was devastated. Emotionally I was numb, psychologically I was terrified but the reason I want to share this story with you is because I was watching all of my hard work and years of late nights go to zero. When the dust settled, I barely had any personal funds remaining and I was far from the dream of being financially independent and free.

While it took quite some time to process this experience and realize the wisdom contained herein, I ultimately found peace. I realized two extremely critical things that will stay with me for the rest of my life. First, I got a chance to see who I was under pressure. Up to that point, I didn’t know myself in the face of extreme circumstances but coming out of the experience, I realized that I am someone who can weather storms. This has subsequently made other challenging experiences in my life easier to handle. Second, while I was hoping for a big payday, I think having a significant amount of money at that time would have been harmful rather than helpful. I honestly don’t think I was mature enough to be handling a life-changing amount of money, furthermore, I was not a very emotionally secure individual and I think I would have just started throwing money at my problems and fears instead of having to do the hard work of understanding how to skillfully handle them.

And so what started as a challenging and emotionally charged experience and one that I originally was deeply disappointed by has since turned into one of the most powerful teaching moments of my life. One that has changed the trajectory of my life in the most amazing and unexpected ways. I no longer feel any negativity or charge around what happened to me back then and because of this, I have come to the belief that regret has no place in our vocabulary. Regret is giving up. Regret is an excuse to not do the work to understand how an experience affected us the way it did. Regret is a luxury that will make you a victim of your own life. And the worst part is, regret would have you believe that you cannot do anything about it.

Do yourself a favor, forget regret. You won’t regret it.

To make this better:

• If you know of any other labspaces, please message Harry with name and location of the lab.

• Also, if you’ve had experience working at any of these labs, please share your experience so other scientists & researchers can have a better idea of how to take their ideas off the ground.

Direct Sales:

Direct sales involve selling products or services directly to your end customers without any intermediaries. Startups employing a direct sales model typically have an in-house sales team responsible for prospecting, pitching, negotiating, and closing deals. This approach offers several advantages:

1. Control and Customer Relationship: Direct sales give startups complete control over the sales process, allowing them to establish and nurture direct relationships with customers. This control enables better understanding of customer needs, effective feedback collection, and personalized customer experiences.

2. Flexibility and Adaptability: Startups with direct sales can quickly adapt to changing market dynamics and customer demands. After each sales conversation, they can make immediate adjustments to pricing, product positioning, and sales tactics based on direct feedback from customers.

3. Higher Margins: By eliminating intermediaries, direct sales allow startups to capture the full profit margin from each sale. This can be particularly advantageous for companies with high-value products or services.

However, direct sales also come with challenges and considerations:

1. Higher Costs: Building and managing an in-house sales team can be resource-intensive for startups, requiring investment in recruitment, training, salaries, and sales tools.

2. Limited Market Reach: Startups focusing solely on direct sales may find it challenging to penetrate new markets or geographies where they lack a physical presence or local expertise.

Channel Sales:

Channel sales involve partnering with intermediaries, such as distributors, resellers, or value-added resellers (VARs), to sell products or services. Startups using a channel sales model leverage the established networks and expertise of these partners to reach a broader customer base. Some key benefits of channel sales include:

1. Expanded Market Reach: Channel partners provide startups with access to new markets, geographies, and customer segments that might be difficult to reach independently. They have established distribution channels, relationships with key customers, and local market knowledge.

2. Cost-Effective Scalability: Channel sales can enable startups to scale their sales efforts without incurring significant upfront costs. By leveraging partner resources, startups can tap into existing sales networks, reducing the need for building a large in-house sales force.

3. Focus on Core Competencies: Partnering with channel intermediaries allows startups to concentrate on their core competencies, such as product development or innovation, while leaving the sales and distribution aspect to experienced partners.

However, startups must be aware of the following considerations when implementing channel sales:

1. Limited Control: By relying on channel partners, startups relinquish direct control over the sales process and customer interactions. Maintaining consistent brand messaging and ensuring high-quality customer experiences may require effective communication and training.

2. Margin Compression: Channel sales involve sharing the revenue with intermediaries, resulting in reduced profit margins compared to direct sales. Startups need to carefully evaluate the trade-off between increased market reach and lower margins.

Startups should carefully evaluate their sales strategies and choose between direct and channel sales based on their unique needs, resources, and target markets. Direct sales offer control, customer relationships, and flexibility, but require significant investments. On the other hand, channel sales provide access to broader markets, scalability, and cost efficiencies, but involve relinquishing some control and sharing margins with partners.

It's important for startups to consider hybrid approaches as well, leveraging both direct and channel sales models to achieve a balance between control and market reach. Ultimately, the decision should be driven by the startup's specific business objectives, competitive landscape, and customer preferences. By understanding the differences between direct and channel sales, startups can make informed decisions that align with their growth aspirations and pave the way for sales success.

Those first months revolved around testing, learning and tweaking our product and sales process until we could increase monthly recurring revenue. We were always trying to keep burn rate low.

Because we were a small company with less than 5 employees, we hosted daily standups where I was always transparent around these three numbers and our development sprints. The engineers focused on completing story points (which were attributed to features we needed to build) and the rest of us were laser-focused on increasing the monthly recurring revenue number each day (but more realistically, as is typical with mid-market and enterprise sales, it changed once every few weeks).

Once we grew to ~10 employees, our daily company standups turned into daily team standups and one weekly business review with everyone at the company. Breaking our touchpoints down into product/engineering and sales/marketing/customer success helped teams stay focused while ensuring we still had dedicated time each week to be together. This ‘standup by department’ + weekly business review lasted a long time.

Fast-forward a few years, after we sold the company, we began working for a larger business that had a few hundred employees. With more people came additional layers of management. With management came more responsibility and more reviews to ensure teams were on the right track.

• Managers hosted weekly business reviews with their teams.

• Directors hosted weekly business reviews with their Managers.

• VPs hosted Monthly Business Reviews with their Managers.

• C-Suite hosted Monthly Business Reviews with their VPs.

• The Board hosted Quarterly Business Reviews with the C-Suite.

Managers and Directors were left to make meaningful change to the numbers with their teams week over week. They were close enough to the problems to know possible solutions, test them and make an impact. They looked at the numbers and continued these testing loops week over week.

Then monthly, VPs and the C-Suite would refocus the company’s strategy and direction and give insight into the new numbers to beat and possible paths to get there. Then Managers and Directors would get back to work with their teams.

Some key pointers to hosting business reviews at any level:

1. Align on the most important data to track for your business (sales #s, sprints, etc.).

2. Compile data & create WBR/MBR slides.

   1. Automate this data collection so you don’t have to spend more than 30 minutes a week/month pulling this together.

3. Circulate slides 24 hours in advance.

4. Require that everyone pre-read the slides.

5. Don’t read the slides in the meeting — Keep the conversation about solutions.

6. Require that everyone who attends the meeting comes to the meeting with one idea to answer the question: what can your team do this week to move the needle in your key metric?

7. If someone doesn’t talk/contribute in the meeting, they’re not allowed to the next one. Everyone has valuable ideas — share them.

What are your favorite tips for hosting Business Reviews?

Comment for a sample SaaS Business Review Template

You don’t know what you don’t know.

For a first-time founder, this can be a make-or-break moment. Perhaps you would have made a different decision about your product if you had just known a bit more about how to build software for scale. Perhaps you could have closed that needed deal if you had someone there to coach you through the nuances of enterprise sales. You get the point. The biggest hurdle to starting something up is the raw inertia it takes to get moving and limiting the early risk can be the difference between survival or failure.

One of my mentors once said, “If I’m doing my job right, you will make different mistakes.”

So where to start? For the sake of this article, I will share guidance as if this is your first company. Let’s break it down into small actionable steps that will create a clear system for you and anyone you would like to invite to your board. Watch this video for a quick crash course on one founder’s perspective.

1. Find the gaps. Are you a first-time founder? Or is this your 3rd company? Depending on where you start with your experience will determine what expertise you need in your corner.

   1. Are you an expert in the market you will be operating in? (Strategy)

   2. How will you position your product to be different and communicate this in a clear way? (Strategy)

   3. What type of company are you building, deep tech, hardware, software, CPG, etc.? (Strategy)

   4. Do you know how to build the product you think will solve the problem? (Technology)

      1. If yes, do you have experience in all of the different technologies that will be used?

   5. Will your product require any unique design elements or user experiences in order to delight your customer? (Product Design)

   6. How will you reach your customers? (Marketing)

   7. Do you know what type of sales model you will need to use? (Sales)

   8. Do you understand how to sell into that market? (Sales)

   9. Do you understand how long it will take to sell your product? (Sales)

   10. What type of talent will you need to attract in order to make a great product? (People & Talent)

   11. Do you know how all of the pieces of your company need to fit together for you to scale? (Operations)

   12. Do you understand what costs will scale flat or linear? (Operations)

Hopefully, you get the idea. There are more questions that will depend on your specific niche, but use the above as an outline to determine where you “don’t know what you don’t know”.

2. Who are they. These are the people who you will be trusting to guide you through uncertain times. Consider the following questions when meeting people and interviewing them for your advisory board.

   1. How do they behave, and hold themselves when you interact with them and what do their peers think about them? Don’t be afraid to ask for references.

   2. What is their longest business relationship? A good formula here is it should be something like their current age (approx) minus 22 (avg. years before a career). If they have long enduring relationships, they are probably someone you want to be around too.

   3. What have they accomplished? Go into detail about the specifics. Especially if you are considering them to advise you on something technical like software design, or firmware, etc.

   4. Where are they at in their careers? Are they able to give you the time and attention you need or are they so focused on their own life and career, you may be not getting their best. A good rule: If they don’t need anything from you and they are excited to help and support you, they will check this box.

   5. Lastly and probably most important, do you enjoy spending time with and feel supported by this person? Remember, these are people you are inviting to go on a journey with you. You will be getting to know each other at your best and worst moments. Make sure you can ride the up and downs together as partners.

3. Where to find them. The difficulty of this next step will be determined by how strong your network is. An entrepreneur’s best weapon for solving any problem is their degree of separation from the person who knows the answer. Taking the time to get the right people around you is critical.

   1. Your immediate network. Friends and family are a great place to start. Take the list of people you need to your close relationships. You may be surprised who you get introduced to.

   2. LinkedIn and other cold outreach. Use the tools available to you. LinkedIn is a powerful tool to find and connect with people who match the background and experience you are looking for. There are also other great prospecting tools like ZoomInfo that have contact information available if you are going to reach out cold.

4. Craft your ask. Be very specific with what you are asking from a time commitment from your advisory board. How much time will you be asking from them per month? Is there specific support you will need from them now or in the future? Typically, advisory engagements can look like this:

   1. The board will meet once per month for 1-2 hours. Or whatever frequency you require.

   2. Participants are expected to be fully present at such meetings. Dates should be sent far in advance to ensure time to plant.

   3. Advisors can expect equity compensation ranging from 0.1% to 0.75% or higher depending on their strategic value.

      1. Equity will be distributed on a 2-year vesting schedule. (This can be negotiated if necessary.) Cliff or no cliff.

   4. You will issue a standard advisory agreement to formalize the relationship if they agree. See here for an industry-standard template.

5. Formalize the relationship: The last step is to formalize the relationship through documents and clearly communicating expectations.

Following the steps above should be a pretty foolproof way to build a network of people around you that can support you throughout the life of your startup. Keep in mind that what you ask of these people is as rigid or as flexible as you need it to be. Feel free to modify your asks according to your needs.

Good luck.

I was recently on a call with a really interesting founding duo that was pitching an energy and crypto business. It wasn’t until 45 mins into our conversation that I heard the one sentence that caught my attention and really caused me to lean in:

WOW, wait a minute… you are going to what?!

It turns out that this founding team had been through the wringer with their pitch and had received so much feedback that they had lost their core message.

That one line was the line that would make any VC pause and ponder what would happen if this team could actually pull off what they were proposing.

As a founder raising venture capital you are signing up to build companies that have the capacity to change the world and in doing so, create outside returns - returns that need to be upwards of 10X to 100X. That's the model. This means, that the ideas being pitched need to be as big as those returns. If that doesn’t sound like what you want to do or your business simply is not meant to scale that large, then you probably want to think about alternative sources of funding and this article is only partially relevant to you. 

If the above is what you want to do, then read on. 

The One Thing & the Promised Land

What makes a good leading line — a good elevator pitch? The easiest way to think about this is: what is the one thing that will be possible tomorrow that is not possible today without your company, and what are the impacts this could create?

Ideally, this can be mapped back to dollars and cents. It could be potentially dollars saved, earned, markets unlocked, efficiencies gained, etc.

Whatever it ends up being, you need to communicate how, if your company overcomes all of the other chaos that comes with company building, you will be strategically positioned to capitalize on this massive opportunity. Think of the “Promised Land” (not my term): https://www.linkedin.com/pulse/greatest-sales-deck-ive-ever-seen-andy-raskin/

This core idea and concept needs to be at the forefront of your entire story. Everything you are doing today and in the future should the clearly mapped to this outcome. In that way the story becomes cohesive and I will keep leaning in. You now have my attention because I really want to hear how you are going to get me to the Promised Land. 

Now onto the main point of what I have noticed. There are a lot of “venture” investors out there that are wary of big visions. Just like entrepreneurs, VC’s follow the same rule of greatness. Of the total population of venture investors, I would argue that only 10%-20% are exceptional. This means as founders, most of the conversations you are going to be having are really being had with people who are mediocre-to-good at best. Which, following this logic, means the feedback that is being provided is probably not the most thoughtful.

If you hear the following, think twice — there may be feedback behind the feedback:

• “We really need to see you CAC or LTV or COGS before we can get comfortable investing.”

• “What if Google builds the same thing?”

• “Your market is too big.” 

  • Then when we break it into segments “your market is too small.”

• “How will you monetize this?”

• "This space is too saturated... OR I'm concerned there aren't many players in the space."

• "We understand you have 50 customers, but we can't get comfortable with your 10% churn."

• “A bit too early for us but do reach out to us during your next round and we’ll be cheering you from the sidelines in the meantime!”

• “Your revenue growth is amazing but what’s your strategy if it slows down?”

You get the point. The real goal is to flesh out whether or not the questions are valuable feedback or not.

Consider the following;

• Are they actively investing in companies at your stage?

• Does this investor know your space intimately?

• Have they been asking other thoughtful questions during the meeting?

• Are their questions appropriate to the stage of your company?

The trick with all questions is to read between the lines.

Real Questions, Real Answers

As 1517 is a pre-seed/seed stage fund, I thought I would put together a list of stage-specific questions you should be prepared to speak to: 

Idea Stage: 

• What is the product?

• Who is the customer?

• Why is this important to do? 

• Why are you the one to do it?

• What is the MVP? 

• How are you going to test the viability of this product in the market? 

• How much capital do you need and how long is it going to take? 

Pre-seed: 

• Did you do what you said you were going to do with the first traunch of capital?

• What assumptions did you make that were right and wrong? 

• Did you learn what you are missing in regard to product market fit? 

• What changes are you going to make and how are you going to test them? 

• How much can you charge your initial customers? 

• Is there a market here? (Hopefully) Tell me more about it. 

• How else do you need on your team to make this PMF happen? 

• How much do you need and how long is it going to take?

Seed: 

• Did you do what you said you were going to do with the second traunch of capital?

• How close was your product launch to your key assumptions about PMF? 

• What are the additional tweaks that need to be made in order for you to approach product scalability? 

• What are you learning about your customers and how they want to buy the product? 

• How are you thinking about selling the product and in what ways are you thinking creatively about this? 

• How are you exploring pricing options to maximize revenues? 

• What are your rough margins and operating expenses?

• Where are the biggest gaps on your team and how do you plan to fill them?

• What are the biggest Go to market hurdles you face? 

• How much do you need and how long is it going to take?

While the above list is not by any means exhaustive, it is meant to illustrate that different company stages mean the feedback you should be getting from investors should fall into and track with the questions above in some way. If not, chances are that they are putting you in a bucket that you do not belong in (consciously or unconsciously) Listening to this feedback is going to pull you away from your lede!

And now for the most important point: if investors are not giving you the right feedback, it means they do not understand your company and/or your stage.

How you pitch is who you will attract - investors who get it, will get this. One of the things I admire most about 1517 is that they are not afraid to hear big visions. When you lead with your big vision and the rest of your story is in support of this, you will find that the people who really get it, will lean in - literally and metaphorically. Don’t modify your pitch every time you get feedback, only when you feel that the investor giving you that feedback genuinely gets your business and your big vision. 

If you are truly on a mission to change the world, don’t hide your vision in the back half of a dry deck, bring it up front and center. 

Most people you speak with won’t get it.

Don’t sweat it, just move on. The people who get it will lean in.

That's what you want to look for. 

Following a few steps may help you better allocate equity in a way that benefits the company for the long haul.

1. Define roles and responsibilities: Before determining the equity split, it is important to clearly define the roles and responsibilities of each co-founder. This is much less about who gets the “C-Suite” titles, and more about what will each founder spend their days doing to drive incremental change in the business. Having this discussion will help to ensure that each person is contributing and not duplicating efforts.

2. Consider the value of each contribution: Think about the unique value that each co-founder brings to the table. This could include things like expertise, experience, connections, and financial investment. Weight those based on how important you and your co-founder(s) believe they are to your success. If you’re going into a heavily relationship driven business and one co-founder has more relationships, that may weigh more than a co-founder with a technical background and vice versa.

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3. Use a calculator or formula: There are various online calculators and formulas that can be used to determine an appropriate equity split. Some popular methods include the "Three Founders" formula, which splits equity evenly among the first three founders, and the "Vesting Schedule" method, which allocates equity based on time worked. I’m personally a fan of weighing the risks and compensating co-founders for their ability to tackle those risks (see below for an example).

4. Negotiate and compromise: Once you have a rough idea of the equity split, it's time to negotiate and compromise with your co-founder. Be open to discussing your reasoning and be willing to make adjustments as needed.

5. Get it in writing: Once you have agreed upon an equity split, it's important to document it in a legal agreement. This will ensure that the terms are clearly defined and can be referenced in the future.

It's important to remember that the equity split may not (and likely should not) be equal, and that's ok. The key is to make sure that the split is fair and equitable based on the contributions and value that each co-founder brings to the table. With open communication, compromise and proper documentation, you can ensure that your equity split is fair and will set the foundation for a successful business partnership.

A trademark is a symbol, word, or phrase that is used to identify and distinguish a company's goods or services from those of other companies. Trademarks are registered with the government and can include things like logos, slogans, and company names. The main purpose of a trademark is to protect a company's brand and prevent others from using a similar name or logo which could cause confusion among consumers.

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On the other hand, a copyright is a form of legal protection that applies to original works of authorship, such as literature, music, and art. Copyrights are also registered with the government and give the creators of these works exclusive rights to reproduce, distribute, and display them.

When it comes to protecting a company name, a trademark is the best option. This is because a trademark is specifically designed to protect a company's brand and prevent confusion among consumers. A copyright, on the other hand, is not typically used to protect a company name, as it is not considered an original work of authorship.

To register a trademark, a company must submit an application to the United States Patent and Trademark Office (USPTO). The application process typically includes a search of existing trademarks to ensure that the proposed name does not infringe on any existing trademarks. Once the application is approved, the trademark is added to the USPTO's database and the company can use the ® symbol to indicate that the trademark is registered.

When selecting the symbol, word or phrase that you’re looking to trademark, you’ll be asked to select a category for the ‘Goods and Services’ your business provides customers. Trademarks for symbols, words and phrases may be granted even if they’re duplicative as another business, as long as the Goods and Services you provide are different. As an example, for the trademark ‘RSRV’ there is a trademark on ‘RSRV’ for alcoholic beverages and a trademark for ‘RSRV’ for trying new products in a physical establishment. Both trademarks were granted because the ‘Goods and Services’ differ.

In summary, trademarks and copyrights serve different purposes: trademarks protect company's name, logos and branding elements, copyrights protect original works of authorship. If you want to protect your company's name and branding, a trademark is the best option. It's important to register your trademark as soon as possible to avoid any potential legal issues down the road.

1. Corporate income tax: If your corporation is based in Delaware or conducts business in the state, you'll need to pay corporate income tax on your profits. The corporate income tax rate in Delaware is 8.7%, which is one of the lowest rates in the country.

2. Franchise tax: All corporations that are incorporated in Delaware or conduct business in the state are required to pay a franchise tax. The franchise tax is based on the value of your corporation's authorized capital stock, and the rate varies depending on the amount of capital stock.

3. Sales and use tax: If your corporation sells goods or services in Delaware, you'll need to pay sales tax on those transactions. The sales tax rate in Delaware is 6%, which is one of the lowest rates in the country.

4. Property tax: If your corporation owns property in Delaware, you'll need to pay property tax on that property. The property tax rate in Delaware varies depending on the location of the property.

5. Employment taxes: If your company has employees, you'll need to pay employment taxes on their wages. These taxes include federal and state unemployment insurance tax, as well as federal and state income tax withholding.

6. Personal income tax (situational): If your SaaS company is a sole proprietorship, partnership, or S corp, the profits from your business will be taxed as personal income on your personal tax return. The personal income tax rate varies by your income level.

It's important to note that these are just a few of the taxes that you may need to pay as a corporation in Delaware. There may be other taxes that apply depending on your specific situation. It's always a good idea to consult with a tax professional or the Delaware Division of Revenue to ensure that you're paying all of the taxes that you're required to pay.

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To register for federal, state and local taxes, please see the steps below:

1. Brainstorm: Start by making a list of words or phrases that relate to your business and its values. These can be words that describe your products or services, your target audience, or the unique qualities that set your business apart.

2. Keep it simple: Choose a name that is easy to spell and pronounce. A complicated or hard-to-remember name can make it difficult for people to find and remember your business.

3. Be memorable: Your company name should stand out and be memorable. Consider using a play on words or a unique spelling to make it more distinctive.

4. Consider your audience: Think about who your target audience is and choose a name that resonates with them. For example, if you are targeting a younger audience, a more modern and edgy name might be more appropriate.

5. Check for availability: Before you settle on a name, be sure to check that the domain name and social media handles are available. You don't want to have to change your name later because you couldn't get the right online presence. Don’t forget to search on local business registries or state trademark websites.

6. Get feedback: Once you have a few potential names, gather feedback from friends, family, and colleagues. They may have insights or perspectives that you haven't considered.

Naming a new company can be a daunting task, but by following these tips and being creative, you can come up with a name that represents your business and resonates with your audience.

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C-Corp:

Traditional business structures like C corporations are taxed separately from their owners. This means that instead of the profits being distributed to the individual owners and taxed at their individual tax rates, the business itself is responsible for paying taxes on its income. 

C corporations allow for an infinite number of shareholders and the opportunity to raise funds through the selling of stock. C corporations are subject to double taxation, which means that after the business pays taxes on its income, the shareholders also pay taxes on the dividends they get.

C Corporations are how most venture-backed startups are organized.

S-Corp:

In many aspects, a S corp is similar to a C corp, but it is taxed differently since it is a pass-through corporation, which means that the earnings are distributed to the owners individually and subject to their individual tax rates. S corporations don't face double taxes, making them generally more tax-efficient than C corporations. However, there are some limitations on S corps, such as a cap on the number of shareholders (100 or fewer), making them less attractive for founders looking to raise money. The other requirement for S Corps are that all shareholders must be U.S. citizens or resident aliens — again, a limiting factor in raising money from firms or individuals outside the US.

LLCs:

A hybrid business organization called an LLC combines aspects of corporations and partnerships. Similar to a S corporation, an LLC is taxed as a pass-through entity, which means that the profits are distributed to the individual owners for personal taxation. Since an LLC provides the same level of liability protection as a corporation, the owners' private assets are often shielded from corporate debts and liabilities. LLCs can be owned and managed by one owner or by several, giving them flexibility in terms of ownership and management structure.

In summary, there are a number of important distinctions between C corps, S corps, and LLCs. C corporations allow for an unlimited number of shareholders, the capacity to raise capital through the sale of shares, but are susceptible to double taxation. S corporations are subject to specific ownership limits yet are taxed as pass-through businesses and provide greater tax efficiency. Although they are taxed as pass-through organizations, LLCs provide liability protection and flexibility in terms of ownership and management structure. Depending on your unique needs and objectives, your business will require a different business structure.

*Note: I am not a tax accountant or lawyer by trade. Please consult yours before making decisions about your company.

But when running a company, I’ve found the best goal setting excerises to be split into two parts:

1. Setting Goals - Activity where a small group of people get together to set the top 3-5 goals of the company for the next year (founding team, founder + board members, executive team, etc.).

2. Creating Alignment - Once the 3-5 goals are set, the rest of the team aligns their top 3-5 goals that align to the topline company goals.

Founders and Board Members tend to have a birds-eye view. They follow the fundraising market closely. They know what competitive milestones need to be hit to reach the next step in company growth. They know the cashflow situation of the business and how much runway is left. They’re in the perfect position to create realistic, yet stretch goals. But goals coming from the top doesn’t lead to employee buy-in, which is why alignment is important. It’s important for employees to feel like they are creating their goals and that their goals have a higher purpose in the company’s growth story.

Setting the Direction

1. Start with an Excel sheet or a Google Sheet titled “Company Goals - 2023 [Master]”.

2. List out your top 3-5 areas of focus (ex. product, sales, customer success, etc.).

3. For each area of focus, list the name of someone on your team that’s responsible for hitting/not hitting the goal.

4. Give the goal a title that everyone in the company can easily say to refer to the goal.

5. Write a metric-driven description of the goal.

6. Write the actual metric of the goal (how will you measure if you succeeded or failed)?

7. Write the date you must complete the goal by. (Hint: I always made sure I had one big success goal to talk about each quarter with investors, mentors, etc.).

8. Lock the excel tab so its uneditable by anyone but the executive team.

Use the excel throughout the year to track the status of the goal, review on a frequent cadence (weekly, monthly, quarterly, etc.).

Creating Alignment

1. Create tabs for each area of focus in the Master Excel.

2. Send the excel to each of the Goal Owners from the first tab.

3. Ask them to come up with the top 3-5 goals that will help them achieve the goal in tab 1.

4. Have them fill out the same excel sheet format with goal descriptions, goal metrics, dates of completion for their goals. (Hint: if they complete all their goals, they should reach the macro goal on tab 1).

After the sheet is filled out, schedule a meeting or company retreat to discuss the goals. Align to make sure there are no overlapping goals. Everyone should have a distinct purpose and not be doing duplicative work. Make sure everyone on your team has all the tools they need for the year to be successful - if not, make sure you’ve budgeted for those or have a plan to help them acquire those tools early in the new year.

As you leave the goal setting exercise and shift into execution, remember to revisit these goals at least monthly to track your team’s progress.

Even though there isn’t a clear output in sales (example: “make 5 calls and you’ll get a sale”), there is still a process founders and sales executive can follow to ensure the team is directionally doing the right things.

Over the years, I’ve moved from a 5-step process to an 8-step process for enterprise SaaS, where Sales Development Reps are responsible for the first 4 steps of the process and Account Executives are responsible for the last four. SDRs get paid on Stage 3 - Stage 4 conversion, and Account Executives get paid when a deal closed. When I was leading sales teams and running RevOps, I would check my reports daily within Salesforce to see what stage my team had the most leads in. Were my SDRs having trouble moving from Stage 1 - Stage 2? How could I help them move quicker? Were my AEs having trouble moving from Stage 4 to Stage 5? What could we do to move prospects further along the funnel?

Having clearly defined stages also allows you to better forecast your business. As an example, if you know you have 3 deals in Stage 6 worth $1M each and 5 deals in Stage 5 worth $750K each and a conversion rate of 80% and 60% respectively, having defined stages with conversion rates allows you to forecast that you’ll close 2 of the $1M deals and one of the $750K deals by end of quarter for a total of $1.75M in ARR.

The stages I always use for enterprise SaaS are below:

1. Stage 0 - Graveyard

   1. Probability to close: 0%

   2. This is a business you could pursue, but no initial research has been done on them. No outreach has been made. You have no reason to believe they know anything about your business.

2. Stage 1 - Prospect or Marketing Qualified Lead (MQL)

   1. Probability to Close - 5%

   2. Two scenarios move an account to Stage 1: a founder or Sales Development Rep has done some homework on this company and there is reason to believe they would be a good fit. They have the right number of employees, the right amount of revenue, the right industry, etc. that makes them a good fit.

   3. The second scenario is that people from this company continue to do research on your business. They download white papers, they visit your website and they trigger their lead score to increase above 99 (more on lead scores in another post coming soon).

   4. Regardless of how the account got to Stage 1, they stay in stage one through any initial contact with multiple (or one) lead at the company.

3. Stage 2 - Discovery

   1. Probability to Close: 10%

   2. An account can move to Stage 2 after a Discovery phone call has taken place. A sales development rep sets up a 15-30 minute discovery call to learn more about the prospect and gauge their interest. Often times, it helps to have Account Executives on these calls as well for larger accounts to make the transition smooth.

   3. On these calls, the Sales Development Rep is trying to assess if the prospect has BANTR - Budget, Authority, Need, Timing, Resources (more on this later, too).

4. Stage 3 - Demo

   1. Probability to Close: 30%

   2. An account can move to Stage 3 after an initial Demo has taken place and next steps have been established. During this pass, the Account Executive typically has been on the demo and agrees that the SDR has done their job to find and qualify the lead. Now the Account Executive ready to take it on and continue the sales process — conducting more demos and working the account through the sales process.

5. Stage 4 - Alignment

   1. Probability to Close: 40%

   2. An account can move from Stage 3 to Stage 4 once BANTR has been discussed and confirmed again (with the AE leading the conversation the second time), and the account is ready to talk about the close plan (“What are the steps from here to implement and get started?”)

   3. Stage 3 to Stage 4 often takes multiple demos, with multiple stakeholders. This is where most deals get held up, as enterprise companies are constantly changing, priorities and budgets are shifting around, new stakeholders get hired/fired. So if you’re tracking time in Stage, this tends to be one of the longest times in stage other than Stage 1.

6. Stage 5 - Short List

   1. Probability to Close: 60%

   2. An account can move from Stage 4 to Stage 5 when the account has confirmed that they’ve narrowed their selection down to 3 possible vendors and your company is one of them. This is especially easy to determine when companies are going through a formal RFP process, but you can also ask the account “How many other companies are you evaluating?” to get your answer. Most companies will be upfront with this, as it gives them an easy out if they don’t select you.

7. Stage 6 - Contract

   1. Probability fo Close: 80%

   2. An account can move from Stage 5 to Stage 6 when the account has asked for your contract to begin the legal process and redlines. Even though you’re sending the contract to the customer, this is also a tricky place where deals get held up. You’re introducing new people on both sides and negotiations can take weeks with large companies whose legal departments have lots of other contracts being passed through.

8. Stage 7 - Closed Won / Closed Lost

   1. Probability to Close: 100% / 0%

   2. After the contract is signed, the account is moved to Stage 7, Closed Won that signals to your Services team that it’s time to take over the account.

   3. If the contact isn’t signed or you’re disqualified at any point throughout the sales process, the account is moved to Closed Lost.

9. Stage 8 - Recycled

   1. I’m a big fan of having an 8th stage for “Recycled” accounts. These are accounts that went through the sales process at one point and were interested, but decided not to make any decision on a vendor in the fiscal year. It happens a lot in large companies where they set aside budget for one thing and started a process with a vendor, but other priorities came up or they went over budget in other areas, and their process to purchase got moved to a different quarter or different year. Keeping track of these budget cycles allows you to stay top of mind through drip marketing campaigns and go back to these prospects when their next cycle is coming up.

If you have questions about any of these stages and/or need help setting up your funnel in Salesforce/Hubspot/etc, please reach out. Happy sales hunting!

Along my career, I adopted a simple way to keep everyone in the company informed while minimizing meetings. Every 2 weeks, Directors from each department do a bi-weekly email update (every 2 weeks) on their teams accomplishments. Why Directors? They tend to have the best vantage point to both aggregate whats happening across multiple departments while also being close-enough to the daily/weekly tasks to answer questions that internal stakeholders may have. This way, not every person feels the need to give an update (also a waste of time), but Directors can be the “Directors” giving guidance on whats happening, when and by whom.

The format of this email update is below:

Overview: 

• Give a brief overview of the biggest win of the last 2 weeks. 

• What is going well that you’ll continue doing? What is going poorly that you’ll stop? 

Risks and Issues: 

• This is the departments opportunity to ask for help. Does someone in the company have deep experience in this? Does the founder know someone who can give advice? Does another department need to unblock them? 

Last 2 Weeks:

• Green/Yellow/Red: followed by the task or goal to be completed. Is the department on-track, falling behind or at risk? 

• This allows for team transparency and accountability. 

Sample:

Bi-Weekly Product Status - 12.12.22

Overview: 

• This week the product team finalized all product requirements for our Safari Extension and held a kickoff meeting with our Phase 1 engineers to gain alignment on all these requirements. 

• We will continue these kickoff calls for new features, as they allow us to align and ask questions on the spot - rather than wait for email feedback which can take one week to compile and ends in a call anyway. 

• We will kill our daily standup in a favor of a weekly team standup so we can get more done each morning. 

Risks and Issues: 

• Two developers on our Enhanced Search module came down with COVID last week. We’re behind schedule by 4 days of work. 

Last 2 Weeks: 

• Green: SSO Compatibility - We’re on track to deliver our SSO compatibility with Okta on December 30th. We’ve completed phase one of testing and will begin phase 2 this week.

• Green: Chrome Extension - Were on track for our 10.2 update to our Chrome Extension that includes enhanced cart features and size attributes. Update should be live on Chrome on December 30th. 

• Yellow: Enhanced Search - We’re behind by 4 days on our Enhanced Search module as two engineers are out due to COVID. We have one full stack engineer working on this in the meantime, but will update status to red when we are 7 business days behind on deliverables. 

• Red: Client Integration - We’re blocked and awaiting User Acceptance Testing to be completed by Client A. 

As a founder, angels are attractive -- they bring experience, connections and cash to the table. But since Angels tend to be managing their own hard-earned money and typically run the whole process themselves (finding companies, researching the market, conducting due diligence, etc.), they tend to ask a lot more questions than funds that have teams of analysts crunching numbers and writing exposés on what the world needs more of.

As a founder, if you're talking to angels, be prepared to answer more questions (all things you should know about your business, but will take you longer to discuss with someone who invests as a side gig).

Below is a list of some questions founders should be prepared to answer when raising money from Angels:

General:

• What does the company do?

• What is unique about the company?

• What big problem does it solve?

• How big is the market opportunity?

• Where is the company headquartered?

Market:

• What is the actual addressable market?

• What percentage of the market do you plan to get over what period of time?

• Why does your company have high growth potential?

Founders & Team:

• Who are the founders and key team members?

• What relevant domain experience does the team have?

• Why is the team uniquely capable to execute the company’s business plan?

• What motivates the founders and how are they showing their commitment to the business?

• How do you plan to scale the team in the next 12 months?

• Who is on the board? How big is the board?

Products and Services:

• Why do users care about your product or service?

• What are the major product milestones?

• What are the key differentiated features of your product or service?

• What have you learned from early versions of the product or service?

• Can you provide a demonstration of the product or service?

• What are the two or three key features you plan to add?

Competition:

• Who are the company’s competitors?

• What will give your company a competitive advantage?

• What are the barriers to entry for new entrants?

• What advantages does your competition have over you?

• Compared to your competition, how do you compete with respect to price, features, and performance?

Marketing and Customer Acquisition:

• How does the company market or plan to market its products or services?

• What is the cost of a customer acquisition?

• What is the projected lifetime value of a customer?

• What is the typical sales cycle between initial customer contact and closing of a sale?

• How many customers does the company have today? LOIs? Contracts?

Progress in the Business:

• What early traction has the company gotten (sales, traffic to the company’s website, app downloads, etc., as relevant).

• How can the early traction be accelerated?

• What has been the principal reasons for the early traction?

• What are the biggest challenges you're facing in the business today?

Risks:

• What do you see as the principal risks to the business?

• What legal risks do you have?

• Do you have any regulatory risks?

• Are there any product liability risks?

• What is your exit strategy?

Intellectual Property:

• What key intellectual property does the company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?

• What comfort do you have that the company’s intellectual property does not violate the rights of a third party?

• How was the company’s intellectual property developed?

• Would any prior employers of a team member have a potential claim to the company’s intellectual property?

• Will there be any claims by a party claiming to be a co-founder? (Note that this issue arose with Facebook and other companies.)

Financials:

• What are the company’s three-year projections?

• What are the key assumptions underlying your projections?

• How much equity and debt has the company raised; what is the capitalization structure?

• What future equity or debt financing will be necessary?

• How much of a stock option pool is being set aside for employees?

• How much burn will occur until the company gets to profitability?

• What are the key metrics that the management team focuses on?

Financing Round:

• How much is being raised in this round?

• Who are the other investors so far?

• What other means have you used to raise capital (Kickstarter, etc.)? How did you use those funds?

• What is the company’s desired pre-money valuation?

• What is the planned use of proceeds from this round? How far will this capital get you?

• What milestones will this round of financing help you achieve?

While angels can be great for the value they bring, raising money from them often means you’re taking on a lot more smaller checks, answering a lot more emails and consistently updating your shareholders.

Before taking angel money, here are a few questions to ask your potential angels:

Financing Details:

• What check sizes do you typically write?

• What size check are you prepared to invest in my company?

• Will you lead my round and set the terms?

• Will you follow on in further financing rounds?

• Do you expect pro-rata rights?

• Do you have any percentage allocation you're targeting?

• Are there any special terms you require?

• Can you share a term sheet you've used previously so I can get an idea of the terms that are typical for your investments?

Due Diligence:

• What is your due diligence process?

• What paperwork will you need me to provide to you?

• Do you expect a full data room; or just a deck and financials?

• What needs to be true for you to write a check?

Timing:

• What time horizon do you typically look for in investments?

• What is your criteria for an investment to be "successful"?

Experience:

• Have you invested in anything previously?

• What did you invest in?

• What have you liked about those founders/companies post-investment? How they communicate after you write a check? Etc. 

• Would the founders you've worked with be a reference for you?

Network:

• Do you have other angels in your network that you co-invest with that you would be willing to introduce me to?

Involvement:

• Do you typically take and expect a board seat with voting rights? Board observer seat?

• How do you help your companies post-investment?

• What is the best way for us to communicate on an on-going basis if you do invest?

Fast forward, now it’s November 2022. Amazon laid off 1% of their workforce. Facebook laid off 13%. Twitter laid of 50%. Zillow 5%. The list goes on. In aggregate, over 100,000 employees have been notified that their positions have been eliminated this year — reaching a record since COVID.

With labor being one of the biggest costs of any organization, the answer to preparing for an economic downturn was (and often is) to layoff employees. Layoffs should be a last resort option since their impact tends to be wider-spread than number-crunching executives and finance teams often think about in the boardroom. Morale and productivity are temporary lost in all departments as managers prepare for the tough conversations they will need to have with their teams (both leaving and remaining) and for months after the cuts initially happen when the remaining employees worry for their own jobs while trying to absorb additional workloads. Top talent tends to leave organizations (especially after multiple rounds of cuts), opting to be builders vs. being part of the demolition and cleanup crew. The employees that are left try to recover from lost knowledge and workstreams that inevitably break when people leave involuntarily and abruptly. And eventually, if an organization recovers from all of this, it’s extremely costly to rehire (both from a headhunter perspective and getting new employees up to speed).

For all these reasons, layoffs should be a thought through last-resort. Wondering how to think through this for your organization? Here’s a guide:

1. Start planning early. As a founder/CEO or an executive management team, you should know enough about your business and overall economic trends to start anticipating the need for strategic changes months in advance of needing to action a layoff (caveat for black swan events like COVID). These early downward signals give you the bandwidth to assemble a tight group of “exercise planners” and start scenario planning. Your exercise planners should be an extremely small group of strategic-minded individuals who have the best interest of your customers, your company and your existing team members in mind.

2. Take responsibility. Ultimately, if you’re in a position of leadership, the company is in the situation it’s in-part because of you. Look inward first. What could you have done better? Did you have a lack of direction/strategy? Did you fail to fix cultural issues? Did you make bad decisions? Did you fail to set reasonable goals with your team and your board? To take responsibility for these actions means you’re clear about your impact on the situation, can articulate your own shortcomings to the team and are willing to put yourself on the line first. Use these learnings to have transparent conversations with your exercise planners about what needs to be done on a go-forward basis to get the business healthy again.

3. Honor verbal offers, but halt hiring. During the scenario planning process, it’s important to honor any verbal offers that have been given to candidates, but halt all other hiring immediately. There is nothing worse than hiring employees, asking them to leave good jobs and then find yourself letting them go a month later. To your remaining employees, this comes across as extremely poor planning or lack of strategy. To those impacted by the layoffs, it causes resentment, a damaged reputation and lost customers. For those Managers trying to hire and candidates that are in the hiring process, be transparent about the hiring freeze. Don’t commit to timelines. Follow your scenario planning process and honor the time it takes to do it right.

4. Understand the goal. When preparing for a downturn, the task is often to plan to a number (ex. we need to find $10M to be profitable). Be clear on what this goal is — how much do you really need? Trying to manage to an unattainable or astronomical number can be demoralizing and detrimental. Once you’re clear on your number, ask your exercise planners to to come up with three plans:

   1. find $x dollars (-10% of your number),

   2. find $y dollars (your number),

   3. find $z dollars (+10% of your number).

   Take daily, weekly or monthly checkpoints with this team (depending on how fast you need to make a decision). In your checkpoints, challenge them to outline scenarios with both cuts and growth. When evaluating what parts of the plan to move from “exercise” to “action,” take the long-term view (i.e. if I gave the green-light to action this, what does the business look like 3/9/12/24 months from now?).

5. Engage your growth & innovation teams. Keep in mind that long-term sustainability for companies requires both cutting expenses and growth. Often, the easiest thing to do when you’re in need of cash flow is to cut. The harder task is taking the time to strategically map out how you plan to grow your business. You’re a CEO or executive, time is not something you have a lot of. But if you’re lucky enough to have a growth team or innovation team, bring them along as part of your “exercise planner team.” While these teams often are the first to be cut in downturns, if you have the right people on these teams, they may be your biggest asset. Entrepreneurial, growth-minded individuals thrive off aggressive goals, a purposeful impact and giving 150% towards goals that others might deem unattainable. This is the time to refocus these teams and engage them in the planning task.

6. Get Creative. Before you make layoffs or dramatic cuts, there is often a time where you can get creative. Rather than taking spreadsheets and cutting the highest, or lowest, or most-recently hired employees, ask if your culture is one where employees may band together with temporary salary reductions (and/or increased stock packages) to keep the team in tact. You may be surprised how many employees would be willing to temporarily reduce their own salary to keep the team in tact. Cutting employees often means increased stress, workload and emotional burden while employees tend to think “who is next?” Getting creative with keeping the team in tact is a way to show faith and loyalty to your team. I’ve seen this work where each level of management takes a cut in proportion to their impact on the company’s situation:

   1. C-Suite = 25% reduction

   2. VPs = 20% reduction

   3. Directors = 15% reduction

   4. Managers = 10% reduction

   5. Individual Contributors = 5% reduction

   This eliminates negative feelings of highly paid executives sitting on massive salary packages while some equally dedicated employees suffer lost jobs or reductions. This is leadership by example.

   

7. Plan to start with easily reversible cuts and growth plans. When it comes time to take action, start with easily reversible growth plans that you can start to see results on in the next 30/60/90 days. Begin getting these projects live with your growth/innovation individuals and start tracking results. For cuts, start with “easily reversible” avenues first. Are there software costs that can be consolidated? Are there contracts that can be renegotiated? Are there expenses without a clear ROI that you can temporarily pause (ex: reduce experimental marketing, etc.)? Are people working from home more that would allow you to downsize office space? Do you have 3rd party contracts that you can temporarily suspend or bring in-house for cheaper? Is there additional bloat on your balance sheet that you can reduce?

8. Look for value vs. cost. If you do end up moving forward with your plan, make sure you’re optimizing for value and not cost. Look at the return on investment individuals and expenses have on your organization vs. their cost on a spreadsheet. Letting go of two people with $60K salary may be better for your organization than firing one person at $150K if that $150K person is producing a better return. Investing $100K in a project that may make you $1M may be the right move, even when you need to save. Understand what each person, line-item and investment gets you; prepare to action accordingly.

9. Measure twice, cut once. Once you’ve aligned with your exercise planners on the go-forward actions, sleep on it and regroup two times before actioning. Wood-workers live by the adage “measure twice, cut once” referring to the fact that you only have one shot to get it right. Make sure your plan cuts one time deep. Employees will forget a once time slice, but never want to be part of death by 1000 papercuts.

10. Align your leadership team. Get your leadership team and board aligned first. Explain the situation and your plan. Explain your long-term vision and the strategy behind why you’re doing this now (to achieve that long-term vision). Explain what you’re prepared to give up personally, what you need them to sacrifice as part of this and what you need them to do.

11. Share your plan & act transparently with the whole organization. Once you have a go-forward plan and your leadership team aligned, host a town hall or office hours with your team. Share the plan. Reassure them that the plan involves reductions in expense and growth, and that your ultimate goal is to retain your talent while doing what’s right for the business. Allow them a forum to ask questions, share how they’re feeling and get help if they’ll be impacted by the plan. For those that will be let go, ensure they’re leaving with a clear understanding of how you’ll take care of them through the transition. Will you give them health benefits for 6 months until they find their next gig? Will you give them 3 months severance (knowing that it takes on average 5 months to find a new job today)?

12. Be prepared to lose good people. Sharing your plan will make some good individuals leave. For others (the right ones), it’ll challenge them to step up to the plate to help you action the plan.

Growing a business is never easy, and neither is running a company in the face of an economic downturn. But having a plan for these swings allows you to make the right decisions instead of the easy ones. Acting with a people-first manner at each step throughout the process may be the difference between long-term success and failure.

1. Deeptech founders believe that the product they are building is so unique that no process will be valuable for their use case (so they end up building their own rapidly-changing processes from scratch).

2. Generally speaking, deeptech startups are founded by research-focused entrepreneurs, and they over-index towards a culture of prototyping (ie. building something that works a few times) rather than a culture of product (ie. building something that works almost every time) so processes are not often worth repeating until a prototype becomes something more substantial.

There are tons of processes developed for software development, and traditional hardware development (I am a big fan of Bolt’s Hardware Product Development Series) - but when it comes to building deeptech products, there is very little content for it out there. So I’ve written the following post to shed some light on the deeptech product development process.

Background Information

I want to provide some context so you better understand the content to follow. I’ve broken the deeptech product development process into the following phases:

1. Ideation

2. Prototyping

3. Minimal Viable Product

4. Post-MVP

5. Product Launch

For the purposes of this post, I will primarily be focusing on the first three phases of deeptech product development. 

Disclaimer - I understand that each deeptech product is different, and having a standard process for all deeptech products is challenging. As a founder, you should be mindful of which aspects of this product development process will apply well to you, and which will not. That being said, I’ve written the following such that it can be applied to a wide range of deeptech startups/companies.

What is a “deeptech” product?

There are many definitions to what deeptech means, but for the purposes of this post, I am defining “deeptech product” as a product that has high technical risk, but leads to exponential gain with respect to the customer problem once the technical risk is addressed. This means that deeptech products (usually) come out of insights generated through years of research and technical experiments. While this might sound deflating, the years of research is hard to replicate - and quite often leads to an unfair advantage for the startup.

As a result of the high technical risk of the product, the product management that goes into building is very different compared to a software solution. In a lot of cases, deeptech product teams will solve multiple zero-to-one problems in multiple technology areas to make their products work.

Finally, I’ve deliberately chosen a non-industry specific definition, because the first three phases of deeptech product development should scale to any industry.

Building deeptech products as a startup vs. as a large company

Building deeptech products as a startup is very different from building it in a large company. Within a startup, not only do you have to focus on getting product-market fit, but you also have to be aware of raising capital (and being capital efficient). Within larger companies building deeptech products (think Google X), the pressure to raise capital is not as high. As a result, larger companies can take on big bets without consideration for intermediary value.

A good analogy I’ve found that describes this dichotomy is that of building a car - big companies can make a bet directly to build a car and car parts, whereas a startup will usually have to build intermediary products (like a motorcycle) before building the car so they can sell something on the journey to building a car.

Phase One: Ideation

Ideation starts with defining the business problem to be solved. Unlike traditional startups, deeptech companies tend to emerge from developed technology. Therefore a good portion of deeptech startups start out as a solution in search of a problem - this is why a thorough and unbiased problem discovery matters more for the deeptech startups.

The Ideation Phase starts with the founder thinking that their technology can solve an unmet need in the market. The Ideation Phase ends with a proof-of-concept that validates the “hidden truth” to make the business successful.  

Problem Discovery

Counter-intuitively, the first step in the problem discovery process is to forget about your technology - and instead focus on the problem of the customer. The purpose of problem discovery is to figure out a “hidden truth” about the market, with the hopes that this insight will lead to the building of a great product.

Some important considerations when doing discovery interviews:

• If you are building a B2B product, consider speaking to all those affected by the problem.

  • This could mean speaking to 10+ people at the same company, with different roles. Often you will discover that everyone involved rarely has the same beliefs about product/vision, and as a result what they should buy.

• Aim to get a good idea of the problem severity rather than just whether the problem exists.

  • Teams at this stage over-value secondary market research (like reading market research reports), rather than primary market research (like talking to potential customers). Reports are great at telling you how big a potential market is, but they won’t say much about the problem severity, or why the problem matters to those facing it. It is this “why” where the hidden truths lie.

  • Based on the problem severity, you should have a good idea of what the customer currently spends “trying” to solve this problem, and by extension what they might be willing to spend on your solution. If you aim to raise venture capital, you need to show that there is a scalable solution for a large market (ie. $1B+).

• Your customer owns the problem, and you own the solution - avoid talking about the solution at this stage (save that for later).

  • This is the most common mistake of this stage. Technical founders love talking about the technology and solution - but bringing this up pre-maturely will bias the remaining conversation (and will skew your data).

• Correlate the customer problem to the role of the person you are talking to.

  • For example, a sensor engineer at a medical device company might really care about inefficiencies in the lab, but if the engineering manager doesn’t feel this is a problem, then you will have a hard time getting approval for a purchase of automation hardware.

I also highly recommend reading The Mom Test - it covers the above points in more detail.

By the end of problem discovery, you should have a good idea of who the stakeholder is, and what problems they face (sometimes, you will have more than one person as your “customer”). 

Developing the Product Roadmap

Before going further, I want to say that this product plan doesn’t need to be a detailed document. The purpose of putting together a product plan is to set out what the goals of the product are, what problems it solves, and how to get there.

Pre-work to developing the product roadmap

Given the output of problem discovery, the next step is to figure out whether your technology will solve the stated problem - in other words, finding a problem that your customers face that can be solved by technology in a scalable way. Some key questions to answer before you start building your R&D plan:

1. What solution would be a good fit for the problem that has been identified?

2. What other components do I need to add to my base technology for the solution to have exponential value?

3. What other solutions have been used to solve this problem? (If other similar solutions have failed, why did they fail?)

4. Why hasn’t someone tried building what you are building?

Based on the answers from above, you should have a sense of how your technology will exploit the hidden truth. This will become your unique value proposition. For the Medella team, we realized that we could reduce the cost per glucose measurement by 30x or more using artificial sensors that would not be damaged in daily contact lens cleaning, when everyone else was using enzymatic sensors that couldn’t survive the industry standard enzyme cleaners most contact lens wearers were used to.

At this point, either you will have a theoretical unique differentiator, or you will need to tweak your research to build a unique differentiator, based on what you’ve learnt about the market. In the case that you have a proposed differentiator, it’s time to develop the research & development (R&D) plan to build out your proof-of-concept (POC) and your prototype.   

How to build a product roadmap

The product roadmap is not a requirements document, or a technical specification. A product roadmap just gives the team a clear idea of what product you aim to build, when, and why. Good founders use this as an anchor when they get carried away with project creep. Here are the key things to keep in mind when building a product roadmap:

• You cannot do everything that your customers will want - you will have to prioritize.

• Your first set of validation should be on your unique value proposition (if this doesn’t work, then you should quickly pivot).

• Build requirements in a way addresses your problem discovery data (ie. what you build should solve a customer’s problem).

• Remember - before building a car, build a motorbike first (or even a skateboard). In other words, you should be able to show demonstrated value to your customer with the first iteration of the product, even if it doesn’t exactly match your long term vision right now. Ideally this is a working product, but this could also be validation data, clinical data, or other metrics that allow you to initiate pilots or raise funding. 

Here’s a product roadmap example/template that we developed at Lab2Market to help early stage deeptech founders think through what they will be building.

Proof-of-concept (POC) Development

Once the planning is out of the way, the next step is to build. Your proof-of-concept (POC) should validate the technical breakthrough that will lead to the unique differentiator. 

As you are building the POC, it is important to come up with meaningful measures of success. For example, if a similar problem is solved before, consider using the same metrics for your product (at Medella, our primary KPIs were sensitivity and specificity, so that we could compare our sensors to other sensors on the market).

Keep in mind that your POC should validate the key hypothesis of your business - does your technology solve a validated customer problem? Here are some things to keep in mind as your are building your POC:

• What data do I need to prove that my technology is “good enough” for there to be a good product-market fit? (For battery companies, this might come down to battery lifecycle, battery efficiency, battery safety. For sensor companies, this might come down to size of sensor, sensitivity, specificity. For chip design companies, this might come down to processing speed, power requirements. etc.)

• Your POC doesn’t need to be a complete system - it just needs to validate the part of your product that will give you a unique value proposition. Sometimes, this POC will be made up of multiple components rather than a single component - and that’s okay!

Depending on your experience and prior work, developing a POC can take months to years, and will take some of the most dedicated time to build out.

Note: this is where curiosity-driven research stops, but the focus turns to outcome-driven research. If you come from an academic background, this is a big shift in mindset.

Phase Two: Prototyping 

Once your POC is built out, it’s time to build the system around it, with the end goal of building a working prototype that you can share with your customers/users to get feedback.

Multiple Proof-of-Concepts (Optional)

Depending on the complexity of your product and what you can out-source, you will need to develop multiple POCs. For example, when building our smart contact lens at Medella, we had three core components that we were building in-house - sensor, antenna, and ASIC chip. The rule of thumb is to out-source where possible - our rationale for in-sourcing the above components was that we couldn’t find anyone else who could have built these components better than us.

The Medella example is an outlier, and most deeptech startups I’ve come across will usually only in-source one key component, and out-source + integrate the rest. 

Prototype Integration & Validation

Once you’ve built your POC/s, it’s time to bring everything together. This will take longer than expected - but if you’ve built your prototype in components, you should have a much easier time with debugging. 

When testing your prototype, you want to test each component individually:

• Test for input/outputs of each component (for example, when building sensors, we tested sensitivity, specificity, but also limit of detection, cycle time, and detection range).

And also at the prototype level:

• Did the KPIs measure when all the components were integrated?

• Where and how does the system bug out?

While running the above validation tests, you should start developing a checklist of which components will scale, and what components will not (and why). Doing this will help you significantly when it’s time for production.

Once again, the goal of the prototype is not for it to behave or act like the final product - but rather to test out the critical components (that will become market differentiators).

Customer Testing with your Prototype

Finally, and most importantly, you should be able to take your prototype to your customers (either the system or the data from the system) to get feedback. At this stage, you should re-validate the assumptions you made in your problem discovery, and get into further details about how the customer will use your product, and whether it solves the stated problem.

Some teams will use a “looks-like prototype” (it doesn’t have the functionality of the product, but it looks and feels like the product) alongside with a story/use case of how the customer can use the product. It’s always different when you give humans something to hold/touch, rather than to talk about it - they will usually have realizations that they wouldn’t if it was just conversational/presentation of data. 

Based on the feedback that you get from your customers, you will have to go back and tweak the product as necessary - generally speaking, the stronger your problem discovery, the less iterations you will have to do at this stage.

Phase Three: Minimal Viable Product 

Once you’ve built a working prototype, collected the feedback from your customers, and iterated on your prototype, it’s time to bring it together into a Minimal Viable Product (cue the epic music*).

It’s important to align on a few definitions before we move forward here:

• A prototype works in a controlled setting with limited functionality (low reproducibility, limited use, etc.) - but demonstrates the functionality of the key feature/s.

• An MVP works in the desired environment with all promised functionality (there might be a few exceptions here). A “desired environment” means in the setting in which the customer will use your product.

• A final product not only works in a desired environment, but it is also massively scalable.

Component Development/Sourcing & Integration

This is one of the most tedious parts of the development process. Here, you’ll have to research different vendors/manufacturers, test their component/s within the system (using the KPIs from the prototyping phase), and then test the overall functionality of the system.

Key things to be mindful of at this stage:

• Depending on cost and functionality, you’ll have to re-visit which components you in-source vs. out-source. Generally speaking, the trend at this stage is to out-source as much as possible given economies of scale that manufacturers have.

• Another important decision to make at this stage is how many MVPs to make. Depending on your use case, this number will change. For example, if you are building a medical device, you’ll need enough to collect statistically significant data for a pre-clinical trial - whereas if you are building a gaming mouse, you’ll have to develop enough to give to your users for testing.

• Finally, you’ll have to optimize any components that you’ve developed in-house (usually the one that drives the unfair advantage), so it can scale. This means:

  • The component can be scaled in production.

  • The component’s functionality is reproducible.

MVP Validation/Testing 

Once the components have been integrated, it’s time to test the functionality of the product. The common question to ask at this stage is “does my product cover the requirements of the customer?”

On Engineering Testing

Depending on the complexity of your product, you might have to work with an engineering firm at this stage to help you with one off integrations and assembly. It is crucial to have an engineering test plan for your MVP - this should cover each of the requirements in Phase 1 (and its iterations). This testing you do at this stage will also be down the road when you will have to do quality control at large scale production.

Another aspect you consider at this stage is your supply chain. (Working with CMs and managing your supply chain deserves a post in itself, so I won’t get into too many details here). 

On Product Testing (with Customers)

Now that your product is functional, and does all the things you set out to do, it’s time to give it to customers to test it out.

Note: For technical founders, this is a very scary moment as most engineers/scientists want a perfect product with all the bells and whistles. Two things I would say to calm the nerves here:

1. If you’ve done your customer discovery work right, you’re likely building something that your customers/users want. Trust the process.

2. Product development is an iterative process. If you’ve missed features, you can always come back and add it to the next iteration.

Product testing with customers can take many forms depending on your product (pilot studies, paid pilots, private betas, etc.), but common amongst the above is answering the following questions:

• Are my customers using the product to solve the problem they stated? 

• Are there other problems that your product is solving that hadn’t come up before?

• Which features are most used? Which features are not used? Are there any key features missing? 

• What is the process like for getting your product to the users? (If you are building a B2B product, you will often work with many people/groups within a company with differing opinions. You should know which person/department will champion your product, block your product, etc.)

• What type of support will your customers need when your product breaks down? 

Finally, I cannot emphasize this enough - product development (even in deeptech) is iterative. You might have to repeat the MVP building process until you get the right signals from your customers/users. The purpose of building an MVP is to learn as much as you can about your product-market fit, and iterating based on what you learnt.

On a separate note, a lot of startups will raise funding once an MVP is built as this is an inflection point from an investor’s perspective (you’ve minimized a large part of technical risk).

After building the MVP

After the MVP has been built, divergence in the product pathway starts to emerge. For example, for medical device products, you’ll have to initiate clinical testing, for semiconductor products, you might have to source specialty integration vendors, etc. What is common amongst deeptech startups after building MVP is:

1. Setting up production (sourcing suppliers, contract manufacturers, quality control, etc.)

2. Customer testing/feedback via pilots (or other strategies).

3. Product Launch!

In my next post, I’ll be covering these topics (Phases 4 & 5 from above) in more detail.

Parting Thoughts

I’ve put the above post via my experiences of running Medella Health (where we built a smart contact lens for glucose monitoring), and running the Lab2Market Program (where we have backed 100+ deeptech entrepreneurs in the last two years).

While no two deeptech products are the same, I encourage you to keep the mentality of product-based thinking as you embark on building your deeptech company. While some products will differ in time/resources required for each phase, it’s the thinking behind each phase that is important. I recommend that you develop a unique version of your product plan while using the above framework as a backdrop. Hopefully this post has shown you that building deeptech products doesn’t have to be so complicated. 

Huge thanks to the 1517 Team for encouraging me to write this post, and to Anthony to help crystalize my thoughts. If you are interested in starting a deeptech company, reach out to us via the 1517 website.

Typically, there are three stages of the process:

1. The Homework Stage — This is the stage before you take any meetings and you’re just looking for the FACT criteria, as outlined below (my acronym for information you need to confirm before you take a phone call, get in a car or on a plane to meet any investor).

2. The Meeting Stage — This is the stage before you negotiate terms where you try to identify if this person’s vision aligns with yours, what kind of value they bring to the table and how this person is to work with.

3. The Negotiation Stage — You never really know someone until you have to negotiate and compromise with them. This stage allows you to see how this person is to work with when you’re on different sides of the table. I’ll discuss this in another blog post (as it warrants a section for itself).

The Homework Stage

Treat this stage like a sales exercise. You wouldn’t keep pursuing a sales client if they didn’t meet the BANT Criteria. So don’t keep pursuing investors if they don’t meet the F.A.C.T. criteria. Most of this you can google, but if you can’t find it, get a warm introduction (through LinkedIn or Email) and schedule a call.

Focus

• What stage do they invest in (Seed, Series A, Series B+)?

• What is the market focus or thesis of the fund?

• Does your company honestly fit into that thesis? (e.g. If you’re a Biotech company pitching a purely FinTech firm…you’re pitching the wrong people).

• Does the firm invest in your geography?

Authority

• Does the person you’re talking to have the ability to write a check?

• If so, are you talking to the right Partner within the firm (with the right background of experience who has made similar type investments)?

Competitors

• Have they invested in any competitors?

• Have they invested in any companies that are not competitors today that might be competitors in the future (e.g. is there a potential conflict of interest)?

Timeline

• How many investments have they made in the past 12 months?

• How big of a fund are they investing from (e.g. $10M, $500M or somewhere in between)?

• How old is the fund that they’re investing from (e.g. do they have more money to invest out of that fund or are they in the middle of raising a new fund themselves)?

• If they’re raising a new fund, how close are they to closing that fund? When can they start writing checks from it?

• What is their usual check size (e.g. is this person going to make a material dent in getting you towards your goal in a reasonable timeframe)?

The Meeting Stage

In this stage, you’re confirming all the above, but also getting into the weeds of starting to learn how this person or firm thinks about their own investments.

Identifying the Value You Will Get (Money + Beyond):

• What do they see as their key value (besides money)?

• Which partner will be most involved post-investment?

• Are other partners available to talk to post-investment if questions come up (even if they’re not your partner)?

• Do they seek to lead rounds?

• What is their typical target ownership?

• How much money do they allocate to new portfolio companies vs. follow-on rounds?

• Do they keep any money in reserves per each investment? If so, how much?

• What % of portfolio companies have they followed-on with?

• What milestones will they track to determine if they’ll follow on in your next round?

• What is the fund’s policy on board seats?

Prepping for the Due Diligence Process:

• What are the key requirements/documents they need to see for due diligence?

• What does the investment process look like?

• What days are partner meetings (i.e. days when entrepreneurs typically come in to meet and pitch all the partners — and days where partners discuss if they’re going to invest or pass on an investment)?

• On average, how long does it take to close an investment? Whats the longest time? Whats the shortest time?

Post-Investment:

• How do things typically work post-investment?

• How hands-on are they?

• How often do they like to get updates from founders?

• What is the firms expectation around exists (do they expect you to build and sell OR try to go for the IPO)?

• What happens if you’re almost out of money and you need $XXXK or $XM more to get to the next milestone before you raise your next round?

• Have they participated in a bridge-round? If so, how many times?

• How have they handled companies that have struggled?

• What have been some of their biggest wins and losses? What made the winners, winners (in their opinion)?

Rounding Up Checks:

• Who does it take at the firm to green light investments (just one partner, all partners, etc.)?

• Anything you should know about any of the other partners before meeting them?

• Who have they co-invested with in the past (i.e. you’re asking to see if they can make any other helpful introductions during the fundraising process)?

• What other investors do they recommend you talk to (i.e. is this person/firm going to be helpful)?

Working Together:

• Do you like spending time with the partner you’re dealing with?

• Does the partner respect you, as an entrepreneur and on a human level?

• Do you learn something new OR do they help you think about your business in a better light?

• Scenario: You have 6 months left of burn, you don’t quite have metrics to raise your next round so you know you need to start fundraising for a bridge. You’ve worked your ass off for the past 3 months to get everything to a point where it will keep working as you divert your attention to fundraise for the next 3–6 months. All of a sudden your [INSERT: Mom, Dad, Husband, Wife, Sister, Daughter] is admitted to the hospital on the other side of the country for something pretty serious and the doctors are unsure of how the situation will play out. First, how does the investor respond to the situation (are they human)? And what does this investor tell you to do?

• Will this person “go-to-bat” for you by making introductions to new sales prospects or picking up the phone to call their investor friends when you’re looking to raise a new round?

One Last Thing:

• Have them introduce you to three founders they’ve worked with or invested in. ** This is critical. You wouldn’t hire someone you didn’t do a reference check on. Don’t take money from someone you don’t have a reference check on either. **

Now, armed with a host of questions, you’ll be well on your way to obtaining the answers about investors/firms who will likely have an opinion on all matters relating to your life and how you spend your time.