Thought Leadership Threads

Investors often tell Startup Founders that the distinction between success and failure often comes down to one critical factor: Speed.
‍

Startups exist in a unique ecosystem where time is both their greatest asset and their most formidable enemy. Every day counts in the race to validate ideas, acquire customers, and achieve profitability before running out of cash.

There are snippets in the news every day about the how various currencies around the world are moving.

‍

The US Dollar is strong. The Japanese Yen is weak. The Nigerian Naira has erased its recent gains. The Venezuelan Bolivar has been crashing. Are you curious what all this means and why certain currencies are “strong” while others are “weak”?

Most outsiders don’t understand that Venture Capital is ultimately a sifting exercise. VCs meet with hundreds (sometimes thousands) of Founders every year searching for the perfect combination of a brilliant idea and an exceptional leader.

‍

A direct result of the “volume game” is that VCs learn to bucket Founders into a variety of personality types with many of these profiles being “un-investible”.  And just this week I encountered a common red-flag profile that led to a quick decline: The "Need to be Right" Founder.
‍

In the rollercoaster world of startups, grit isn't just a nice-to-have. It's the fuel that propels companies through the inevitable tough times that precede success. But while everyone thinks they know what grit is, most definitions aren’t precise enough to be useful.

Courage? Conscientiousness? Perseverance? They all miss the mark.
‍

What follows is a tangible and actionable definition that I’ve found to be quite useful when advising Founders:
‍

Grit = Vision + Control

Each startup is a unique beast. Until it “cracks the code”, it's just a representation of a Founder’s vision embodied in a business plan.
‍

And a typical VC Investor will review hundreds (maybe thousands) of these unique pitches every year. Each VC has their own underwriting process, but it's not as formulaic as one would expect given the volume of work moving through the machine.


Because of the unique nature of each startup, company specific underwriting questions need to be answered for any given VC to build conviction around what the Founder believes can be built.

AI, Misinformation, and Market Manipulation

‍
‍

$100 Trillion is a big number. It represents the approximate enterprise value of all the companies being traded on the stock exchanges around the world. And guess what’s really scary? Every one of these stock markets is on the verge of breaking but not a lot is being done to repair their foundations.

‍
‍

The truth is that a perfect storm is brewing that combines AI-generated misinformation, social media virality, and automated trading. This cocktail could lead to unprecedented market volatility and manipulation that won’t be easy to combat. At the very least, significant damage could be done while solutions are crafted and operationalized.

The allure of the Startup world is undeniable. The potential for explosive growth, the thrill of innovation, and the chance to change the world fuel Founders.

‍

However, the road from a bright idea to a sustainable business is riddled with complexities. Getting a startup to "work" isn't simply about doing one thing well. Most startups are extremely complex and require many interconnected parts to all function in concert.

Landing The Plane: A Necessary Choice For Many Startups
‍

How many Founders does it take to land a plane? None, they'll just pivot to a helicopter ride-sharing service.

The past few years in the VC space have been brutal. Darwin has returned from vacation and the frothy gold rush of the 2018-2021 startup ecosystem has vanished.

‍

The ZIRP environment caused valuations to soar and VCs threw money at any startup with a pulse. The money was put to work by Founders quickly, many of whom chased shiny objects and undisciplined growth because their bank accounts were flush with cash.