The Scariest Thing About Working at a Growing Startup

The amount of work that goes into a job at a growing startup is insane.  As soon as you put one project to bed, three more pop up.

However, the most difficult aspect of the work isn't necessarily the effort required, but the emotions, with fear perhaps being the greatest one of all.

When you're part of a small team, you're indispensable.  You are literally doing three jobs at once--three jobs that should probably be done by two people each.  It's crazy, but there's also a certain security in that.  You won't be fired, because there's no one else to do the work.

As the team grows, however, you're asked to do something most people find really uncomfortable--you're asked to start letting go.  You're asked to document how you do your job, maybe your favorite aspects of your job, and to teach it to other people who, on day one, can't do it as well as you've learned how to do it.

The same holds true for relationships.  Maybe you were interfacing with inventory buyers, or interviewing every candidate--but at some point, you have to hand over those relationships, too.  

If other people start doing your job and leveraging your contacts, what happens to that security?  What happens to your sense of identity in the organization?  

Every early startup employee faces this choice.  Do you dig in and play the territorial game, or do you step up to become an indispensable manager?

An indispensable manager not only builds teams, but recognizes a new level of professional responsibility.  You speak with the weight of the company behind you, so you need to make sure you're actually on the same page as the rest of the company.  As an individual contributor, you may not see the effects of not being on board with management decisions--but as a manager, people look up to you. 

Sometimes you just have to say your peace behind closed doors and then get on board for the good of building something bigger then yourself.  At the end of the day, you're not the founder or the CEO--and the decision you have is to stick around and row in the direction everyone else is rowing or jump ship.  

Successful startup execs build bridges and consensus.  They recognize that what the enable the company to accomplish is their track record more than the series of their own person accomplishments.  This means ceding credit to a team and abandoning the "I" for the "we".  You don't want to win every last argument--you want the company to win.  

This is an extremely difficult thing for the type of go-getters and hard workers that are often attracted to startups.  A great individual contributor isn't necessarily a great team builder--but that doesn't mean it can't be learned.  The keys are professional feedback and self-awareness.  Knowing the ways you get in your own way are key to not letting it keep your career down.  Taking both outside and inside feedback--from above and below--to heart is a good first step.  I generally assume that any criticism someone has of me is true, until I can as objectively prove to myself that it isn't, and I wrote about that a while back here.

Startupping ain't easy, and neither is developing as an employee into a manager and executive.


What Should I Include in a Pitch Deck? [VIDEO]

I've rewritten a lot of pitch decks over time and a lot of them are really bad--mostly because founders have been told what should go in them without a lot of consideration as to why.  Somewhere along the line, someone came up with things that are supposed to go in a pitch without ever asking investors how they take in a story.

Here what I want to see in the video below...

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Here are the notes...

1) Don't keep me in suspense as to what it is.

2) The team slide isn't as important as having the human in front of me, or hearing about your reputation elsewhere.  Team is important, but team slides are boring.

3) Get to the money part soon!  How do you make money?

4) Then, how do you make A LOT of money?  You sell lemonade for 50 cents a cup, but how do you sell enough lemonade to go public??

5) Why is your product special?  This isn't that stupid competitive chart where you have all the checkboxes and no one else does.  I want to understand if there's a reason why all of the sudden this angle is possible, and why others aren't likely to have the same advantage you will.  

6) What are you going to do with this money--specifically, what are the GOALS for the round, not how long will it take to spend.  Anyone can spend a million bucks in a year.

If you think you could use some help formulating your pitch for an investor, and you might want to do some good in the process, I'm running a series of pitch workshops called "Fix Your Pitch for Good!" for charity.

Startups can sign up to go through an abridged 30 min VC meeting, and then we'll talk for 30 minutes about what could be improved, how to organize it better, and what VCs need to see.

And if you're just curious, you can just come watch.

For startups pitching, the donation is $250, which will be 100% disbursed to some charities I'm currently raising money for, like the Challenged Athletes Foundation, Team for Kids, and ScriptEd. For attendees, the suggested donation is $25.  


What Valuation Should I Expect in My Seed Round?

I have to be honest, I'm a little suspect when one of the first questions a founder asks me is about valuation.  So many things about startups are difficult and so few startups raise *at all* versus the number who try, that this seems like not the most important question.

That being said, you want to feel like you got a good deal--and your lead investor should be able to walk you through how they got to a particular valuation and why they thought it was appropriate.  They should be able to provide examples of other deals, and talk openly and transparently about their thinking.

Look, at the end of the day, I'm incentivized to buy up as much of your company as possible, and you're trying to sell as little of it as possible.  On valuation, we're not aligned, but we can meet somewhere in the middle, both feel a little regretful about where we wound up, and that's probably the right price.  :)

You Want on That List and Here's How

With each passing year, we get another set of lists:

Startups to Watch

Founders Who Crushed It

Bald VCs in NYC You Should Pitch

When you're on the list, you're tweeting the heck out of it, very modestly of course, and getting all your investors in friends to do the same.  When you're not on it, you tell yourself the list was bullshit for whatever reason, or that you don't have time to pitch yourself because you're too busy running a real company.  

Unfortunately, these lists do matter and when you're not on them, you're missing out on opportunities for press that can cascade over time.  For one, journalists often use existing lists as the basis for other lists.  Also, when event organizers are thinking about speakers, lists of founders and companies represent easy references for invites.  Later stage investors would also be lying if they don't reach out to see what's up and why a company might be featured.

So how do you get on one of these lists?  Simply put, you need to make yourself known to the people writing them!  But how?  Ok, well, here are some tips:

1) First, figure out who we're talking about.  Make yourself a comprehensive list of who is covering your space.  Who has written about the five startups most like yours or most likely to get mentioned in the same conversations?  Who has written about the five companies most likely to acquire you?  What influencers are building a brand about being an expert in the space?  Are there any podcasts you'd make a great guest on and who runs those shows?  Who runs the conferences you'd make a great speaker at (like, literally, which person picks the speakers?)

2) Reach out.  The best way to contact someone is when you're not asking for anything.  Offer yourself as a resource.  You're an expert on something, otherwise you wouldn't be starting a company around it, right?  Write to all these contacts and just say that you're available if they need a quote, some background info on the space, or they want to spitball trend pieces.  Perhaps you might offer them 3-5 interesting facts they could use in future pieces--the kinds of surprising stats you might have had in investor pitch decks that made you want to start this company in the first place.  

3) Interact over time.  Follow all of these folks on social media.  You decided to build your career in this space and they're pushing out content about it.  You should have opinions, be able to ask questions, and certainly be willing to share their content if you're looking for them to eventually share what you're up to.  It's a lot better to have 3-5 different touch points with someone and then wind up in their inbox than to be a complete stranger.  The best way to do this, obviously, is to do this authentically.  These journalists and influencers are people, after all--and they do more than just follow Fintech or the On Demand Economy.  Maybe they run or cook or they follow the same college sports team that you do.  Find ways in which you can connect on a more personal level and stand out for them as a person they identify with instead of just as a founder looking to get a story placed.  

4) Offer up your own lists.  Share your view of other founders who are doing awesome stuff or offer to make introductions.  You're obviously not going to be the only company on a watchlist so if you can help someone fill out the rest of the list, you're more likely to be included.  And if you hate what everyone else is doing in the space, you're likely to be obnoxious to talk to and probably won't end up on anyone's list.  Don't be a hater.

5) Invitations!  Host some group dinners of interesting founders and other movers and shakers in your space.  If you're a means of meeting other interesting people for a journalist, they'll likely stay in better touch with you because they think of your network in addition to thinking of you when they might need something.  Having a reputation for being in the flow of things is a good reputation to have.

BONUS:  This should be obvious, but actually accomplishing something helps more than anything else.  Sometimes, you're working towards a really audacious goal that will come over time, but keeping smaller wins in mind that you can talk about is a great meetings of getting known.  Each month, as a company or just as an individual, set out to do something that might be press worthy.  Maybe it's just a simple co-marketing deal.  Maybe you're going to start a new podcast.  Whatever the case is, make sure you're not just always working, but you're actually launching as well.

Now go get on that list because it's going to be checked twice!

Five Lessons Learned from the Ample Hills $8 Million Raise

Board meetings at @amplehills are dangerous.

A post shared by Charlie O'Donnell (@ceonyc) on

When you're Ample Hills Creamery, the #1 rated ice cream shop in the country you can pretty much throw everything you've been told about fundraising out the window.  Nothing seems to apply--you're not a tech company, you bootstrapped your way to millions in revenues before taking on capital, and you sell mostly through brick and mortar.  Yet, the lessons learned from their $8mm round of funding announced this week are still widely applicable to every startup--particularly food startups and those in four walls retail that struggle through the traditional venture process.

Here's what I think everyone involved learned in this process.

1) Find backers who love you for what you are, even if you're a square peg.

When Ample Hills first raised $4 million in 2015, people asked if it was a seed round.  Technically, that's what we called it, but it didn't seem entirely appropriate given that it had already been up and running for years and had millions in revenue.  When we raised that first round, we needed to figure out who was even open to the idea of backing an ice cream shop with national and global ambition.  We hosted meeting after meeting, stuffing as many investors in the room as we good in groups, invited via waves of mass e-mails to anyone I thought might be interested.  What we found is that while most of the people turned down the invite, most of the people who showed up invested.  Ample Hills wasn't a deal for everyone, but for those that were open to it, they loved the company.

Did that seed make this round our Series A?  Would we pitch Series A players?  I pushed that we should just say what it is--an $8 million raise to grow the company.  Who cares what we called it?  In fact, I thought we should have named our rounds after ice cream flavors but that was quickly shot down by the lawyers.  

The truth is, it doesn't matter--that you can very easily get caught up in positioning, but at the end of the day, an investor who really wants to invest is going to invest.  It's too easy to think that if you tilt the pitch just a little one way or the other, that's going to make the difference, but that's Monday morning quarterbacking.  Rounds aren't close--they either happen or they don't, and an investor on the fence is a pass.  Investors who want to be in will find a way to come in and will structure an economic deal that makes sense, no matter what they call it.

2) When you stray from traditional tech investors, leave yourself twice as much time, because they're twice as unpredictable.  

Tech VC is a pretty mature marketplace--the players are known, the process is established, and so while relationship building might take time, usually you can estimate how long a deal will take with some accuracy (besides, of course, that it takes longer than the founder wants). AH kicked off this raise based on some inbound conversations with high net worth individuals back in the first quarter of this year--over nine months ago.  These types of folks, who may or may not have family offices that they work with, range in difficulty to work with.  Sometimes, the person whose money it is could just say yes, and points to a person to make it happen.  Other times, they hand it off to a team that could take months to do their work.  You just don't know.

In AH's case, ultimately, the person we started talking with didn't actually wind up participating, but still remains a valuable contact and potentially a key partner for the future.  However, someone they introduced the company to wound up a writing seven figure check on a quick turnaround.  Point being, if you're working with family offices and high net worth folks, leave yourself plenty of time.  Investing in you isn't always their immediate priority, and they're used to dealing with people they know a lot better than the typical VC knows a founder when they pull the trigger.

3) Find a flexible lead.

One of the best things a lead can be, especially when you've got a company that doesn't exactly look like every other company, is flexible.  Mike Murphy over at Rosecliff was actually one of the last people Brian and Jackie at Ample Hills spoke to in this process--but he said exactly what any founder would want to hear.  He wanted to be an investor and was willing to fit into the round any way he could.  He didn't come in asking for some crazy ownership or with lots of caveats about minimum check size, etc.  As it turned out, we were oversubscribed with a bunch of individuals and smaller funds that wanted to participate but wouldn't lead, and the round the founders liked the most was one where everyone got to participate.  What was needed was for someone to set the price and to be flexible enough to allow these strategic and helpful new investors to participate.  That was in stark contrast to other folks the company spoke to who wanted to eat up the whole round--so, in the end, he won out by being the most reasonable to work with in addition to all of his great experience investing in the space. 

There's really no better way to win around than to make the founders feel the most comfortable working out a transaction with you.

4) Don't be afraid to wait for the deal you're happy with.  

Ice cream has gotten to be a pretty hot space, ironically, for high profile investors to get into lately.  Sometimes, you run into big name investors who have great potential value as a strategic investor, but they want to get paid extra for their brand's value in the form of equity or lower valuations. 

Ample Hills has been offered these deals and turned them down.

Other times, you might meet a great investor you like a lot, but who isn't as familiar with your space.  They may want a lower valuation as a kind of risk premium for investing in you.  That happened with Ample--they found an investor who spent most of their time in adjacent spaces but didn't quite have the same risk tolerance to participate in a vision that included a big bet on a particular strategy.  It was tough, but the company felt like it could do better economically--which was pretty stressful given how long the process was taking. 

It turns out the right investor and the right deal was worth waiting for as we got a fair price and a great lead that believes in the company.  I see so many retail and CPG deals that get hamstrung by bad investment deals they felt forced to take that only limit them later on.  Of course, a key to this strategy was knowing that there was a critical mass of insiders who would have bought the company another 6-9 months if needed, so we knew the company wasn't going anywhere.

5) Give all of your existing investors homework.

We wound up with about two dozen investors in the first round of Ample Hills, and we had a bunch of those people pitch in to help with the second.  Closing this round was a real team effort. 

Taylor Greene from LHV was the first to bring up Mike at Rosecliff as a potential investor.  Adam Struck brought on significant additional capital from his network.  I introduced the company to Bullish as well as the Allana Group who, amazingly enough, cold e-mailed me out of the blue from a Bloomberg article.  (Sometimes, foreign strangers offering business deals aren't spam after all!). 

Also, Brooklyn Bridge Ventures LPs contributed a big chunk of the round as co-investors, adding to their participation in nearly 40% of the firm's deals.  One investor, Morgan Johnson of Nucleus, wound up spending so much time helping to coordinate negotiations with some of the potential new investors as well as bringing new capital to the table, that he built up a lot of trust from Brian and Jackie.  This led to him actually joining the company as President.  

While some companies might feel that having so many investors on the cap table creates a lot of people to manage, I can easily say that without almost every last person on this capital, we wouldn't have been able to close this deal.  I can't say enough about putting your investors to work with specific homework.

We're excited about the future of Ample Hills, our new factory opening soon and a lot of great deals in the works for expansion and creative collaborations like their fan favorite Star Wars themed ice cream.