• Julie Lerner

Advice from Steve McCann, General Partner at SOSV. SOSV is "The Accelerator VC"​. They run the world's leading accelerator programs in hardware (HAX), life sciences (IndieBio), cross-border internet/mobile in Asia (Chinaccelerator/MOX), food (Food-X), and blockchain (dlab).

1. Not aligning as founders

Investing at the earliest stage, I see many teams implode due to a lack of founder alignment. Sitting down at the very beginning as a founding team to discuss your vision for the company, everyone’s role within the operation of the company, and the equity split can save a lot of these problems. Put simple things such as share vesting, financial controls, short policies, and procedures in place to ensure that there is clarity, fairness, information sharing, and a shared vision in your company. We recommend teams sign a simple short form founders agreement that details many of these things. It has helped many companies to resolve early disputes amicably and with the best interests of the company to the forefront as opposed to any one founder.

2. Not knowing your finances

The easiest time to begin is when you are starting your company; the numbers and transactions are relatively small and should be easy to track (along with the other million jobs you have to do). Accounting is like a muscle — the more you practice, the stronger it becomes. Start with a very simple spreadsheet or accounting package (e.g. Xero, Quickbooks, etc). At the end of the month assess this versus what actually did happen, and figure out why the two numbers could be different. Use this learning to prepare next month’s projections. Sit down as a team and discuss the numbers, what you didn’t anticipate, what is going to happen next month, what might be delayed, how much cash you’ve got, and how long it will last you. Like it or not, cash is going to be the lifeblood of your business, and understanding it gives you a huge chance of succeeding (or surviving).

3. Not aligning your spending with what you want to achieve

Many years ago we invested in a company that raised significant finance. A few years after our first investment they ran into cash-flow problems. I spent a week in their offices as we considered a further funding round and did some work on their finances with the CEO. What we discovered was that they did not track their spending sufficiently or align any of it with the KPIs of the company. Many of the payments coming from their bank account were historic things that they signed up for that they thought they had stopped, they had no in-house financial person (they paid an accounting firm to produce financials that nobody could read), they never looked at their variance reports or assessed any spending campaign to see it if met the objectives they wanted, and many of their staff were on compensation packages that were not in line with what they wanted them to achieve. At the end of the week they recruited an in-house accountant, they changed staff compensation to align it with their role, and they ceased non-effective spending — so we agreed to fund the company further. Eleven months later they had their first profitable month, and one month after that the company sold for a considerable amount, generating a 4x return for us as well as a great outcome for the founding team and staff.

4. Not doing the math before fundraising

Many times when a startup comes to me looking for funding, they present a pitch deck seeking (for example) $1m in investment. Then as part of the deck or associated materials, they have financial projections that show they are going to be profitable in three months' time, and they only require $100,000 in investment to do so. This type of uncoordinated approach is going to lose your credibility with investors. If you are going to try and raise finance, you need to know how much money you really need. You also need to be able to explain what you are going to do with this money and where it is going to get you. As a founder, you should try to anticipate the lifecycle of your company, including how much funding you need to get to cash flow breakeven, to profitability, and to a potential exit. What valuations do you need to reach to make this work on an economic basis personally at each stage? Work it back from the end and forward from the beginning to see how it could transpire. Work on the financial projections for the business. You have a wealth of information at your fingertips about everything. Find out the cost of materials, how much of them you need, where they will come from, the associated costs, what equipment you will need (from where, how much?), and what staff is required (where will they come from, how much do they want to be paid, can you leverage a stock pool?). Look at information from other companies where available, talk to other founders, talk to your advisors, and have your numbers tested. Your investors will hold you to these numbers, so do your best to make sure they are correct. I have had many awkward conversations with founders seeking further investment as we review their original projections provided a few years prior versus the actual reality of what happened….try to avoid these conversations, as it will test the credibility of the new projections you are providing.

5. Targeting the wrong investors

If you are planning to try and raise investment, then please, do not send cold emails to multiple investors with the same tired pitch deck and their first name and surname possibly spelled incorrectly. You need to spend some time finding investors who invest in someone like you! With platforms like Crunchbase, Pitchbook, Prequin, and others, you can now research many investors online. Be specific with why you are reaching out to the investor. Speak to some of their other portfolio companies, watch videos of the investor speaking, and read their blog posts. Find out why they would be a good fit for you, and tell them this. Target your pitch and materials at the reasons why you are a good fit for them. Spend time working out who invests in companies like you, in the right sector, with the right cheque size, stage, etc. Then spend time deciding how you should meet them. Find a warm introduction and then tell them why they are a good fit for you. Don’t blindly waste time spamming every investor you can find — target the right ones properly.

6. Not educating yourself on investment types, terms, and conditions.

We live in a day of having an infinite amount of information at our fingertips. Founders of companies need to spend time reading up on investment legalese and terms. There are multiple good sources of information on the common deal terms and their effects e.g., Quora, TechCrunch, etc. At the end of the day, every single economic term in the investment documents will have an impact on your equity holding and final economic outcome (good or bad), so it is worth reading up on the terms. Looking at a standard set of investment documents ( may seem daunting and complicated, but in reality, there is a lot of repetition and there are only 5–10 actual important terms in there around economics and control. Learn what is standard at your stage (Cooley LLP did a good survey of US investments recently at, and negotiate with that in mind. Also, make sure you hire an attorney that is experienced at your investment stage and reasonably priced. I hear so often of attorneys that are not experienced at the specific stage of investment who delay deals and overcharge. Find someone with relevant experience; agree to a reasonable fee up front so they will focus on what is important instead of running up the hourly bill. Also, get used to modeling your capitalization table for different scenarios. Include all convertible instruments and different scenarios for conversion. I see some startups stacking convertible debt and then being shocked in an equity round when almost all of their company disappears!

  • Julie Lerner

Advice from Joya Dass, former business news anchor, delivering live hourly reports from the floor of the New York Stock Exchange for Bloomberg, CNN, ABC, CBS, NY1 News. She spent a career interviewing CEO's of Fortune 500 and 1000 companies. Today, Joya runs a global network for South Asian women executives and founders in New York City called LadyDrinks. She hosts fireside chats with women leaders to create teaching moments. Past speakers have included Misty Copeland, Payal Kadakia, the founder of Classpass, the CEO of Vimeo Anjali Sud, and the CEO of Diane von Furstenberg Sandra Campos.

1. Do not say you are sorry!

I see women profusely and perennially apologizing. A lot of "I am sorry, I just, I actually." There is all this language that proceeds an ask to take up less space. They are diminishing their ask before they even let it leave their mouth. I am sure this goes back to something being primal. Women only had likability as their most significant asset before they entered the workplace. I think they are continually looking to take up less space in the world. Apologizing for everything all the time is one way doing it, but you are undercutting your authority, and your ability to say what you are saying is important. If you can be mindful of it, you are doing yourself an excellent service. There is a Google Chrome extension that can monitor how many times you apologize and say that you are sorry. It will strike it out so that you can go back and edit your emails before you send them, and you can see how many times you apologize. For me, I would say I am sorry for not responding in 24 hours. I don't do that anymore. I am so mindful when I am about to apologize because, really, why am I apologizing?

2. Don't miss opportunities to find win-win relationships.

Women will walk into a networking event and make friends with people, but they don't think about the way that that relationship could be a win-win. Men will walk into a situation, and they are transactional. They are always looking for the win-win. Women think, "oh gosh, I don't want to bother her." The best example I have is I introduced a woman to a ghostwriter. Immediately she said that she would give me a referral fee for making that introduction. I thought, wow, what a savvy business person. Not only did she acknowledge that I made the referral, but she also remunerated me. So again, it was a win-win situation for both her and me. Now I am incentivized to send her people who want to get books ghostwritten by her. It behooves you to survey the area at an event to find who could you start to enlist as an ally from day one.

3. Create allies to help you advance.

Men invest in creating allies. Who is the person who is going to be my mentor? Who is going to look at me and say you need to cultivate this if you want to get that promotion or that next job? And who is going to be able to help me achieve a goal or get to the next level? When you occupy a seat somewhere, or you are about to take a job, it is not just about that job. It is about the whole ecosystem of your career that you are building. So you need to keep thinking about who is going to be that person that is going to take you to that next seat. It is not about the seat that you are currently occupying.

4. Don't expect to be noticed if you aren't singing your praises!

Women just put their heads down and work, thinking, "well, clearly somebody is going to notice my hard work." The fact is that they are not noticing if you are not your best advocate. I was on television; it doesn't get more visual than that. I would assume that my bosses would know all the hard work I was doing. I had a colleague who said that I was always remote, down at the NY stock exchange. He said you are not in the office getting the face time you need. Men are singing from the rooftops telling everybody about their accomplishments, even if they aren't even worthy of them. That it is a skill for women to cultivate.

5. Don't forget to step back to look at the big picture.

I think it is essential to sanction time to work on the business, not in the business. When you are first getting started, you are continually doing, doing, doing. And that is all tactical, but are you taking time to think about the strategic? I set some time on Sundays. That is my day of strategy. I am looking at my week and looking at what's coming up. I am thinking about the big picture.