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Tag: Founders

  • Want to Get Into Founder Mode? You Should Be So Lucky

    Want to Get Into Founder Mode? You Should Be So Lucky

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    It’s also true that when one of those groundbreaking companies matures and faces challenges, a founder has a unique ability to make bold moves and stick to the original vision when others urge a less risky course. There are certainly cases where companies struggled when founders were replaced by managers. Remember Yahoo? And of course there’s Apple, where the founder returned and restored the company to its former glory and beyond.

    But there are abundant counterexamples as well. Apple isn’t exactly struggling under Tim Cook. And consider Microsoft. Its CEO since 2014, Satya Nadella, had been a company lifer, slogging away in various divisions since 1992. Not a founder, nope. But he’s taken the company to new heights. Though Bill Gates is still revered at Microsoft, no one in the company wants him back at the top.

    And god knows, there are plenty of cases where it wasn’t management fakers but stubborn founders who drove a company into the ground. My guess is that Travis Kalanick might have benefited from listening to stodgy managers. His replacement, a management type of dude, has made Uber profitable.

    The fact is, not everyone is Brian Chesky, and no one is like Steve Jobs. The vast majority of companies never take off, and instead fade into ignominy. Very few founders get to the point where investors demand that they retain adult supervision to manage growth, because only the rarest of companies get to that point.

    It’s fun to talk about founder mode, maybe for the same reason that some of us read Ben Horowitz’s founder-porn texts with our noses pressed to the window. Founder mode, which Graham predicts will one day get its closeup in management texts, really applies only to the most exceptional founders, the ones Steve Jobs once described as “the crazy ones.” Their companies aren’t called unicorns for nothing.

    Time Travel

    In 2007, I embedded in a Y Combinator batch of 12 companies. (Starting next year there will be four batches a year, with hundreds of startups.) It was clear even then that Graham, who was extremely hands-on, had developed his views on the primacy of founders. My story ran in Newsweek under the headline “Boot Camp for Billionaires.”

    Every Tuesday during the program, Y Combinator hosts a dinner of chili or stew for the start-ups. At this first one, Graham and [cofounder Jessica] Livingston distribute gray T shirts emblazoned with one of Graham’s pithiest admonitions, MAKE SOMETHING PEOPLE WANT. A second, black shirt is bestowed only to start-ups that achieve a “liquidity event”—a purchase by a larger company or an IPO. It reads, I MADE SOMETHING PEOPLE WANT.

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    Steven Levy

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  • Is MySpace Back? 1 Million People Now Using Clone Version | Entrepreneur

    Is MySpace Back? 1 Million People Now Using Clone Version | Entrepreneur

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    A MySpace clone site called SpaceHey passed the million-user mark last week.

    Its founder, 22-year-old student Anton Röhm, began working on the website during the pandemic when he was just 18 years old. The pandemic’s restrictions kept Röhm from traveling the world like he originally wanted to before starting university — so he turned to coding for fun.

    “I thought hey, why don’t I build something like MySpace back then, but just new and with the basic functions, the creative freedom, and additionally solving the problems that I see on social media nowadays,” Röhm said in a 2021 talk in Hamburg, Germany. “And that’s how SpaceHey came about.”

    Related: I Tried Airchat, the Hottest New Social Media App in Silicon Valley — Here’s How It Works

    Röhm, who wouldn’t have been old enough to sign up for MySpace when it first launched in 2003, wrote in a reflective post that he created the initial version of SpaceHey in about 3 weeks.

    SpaceHey has the same look and feel as MySpace, with profile pages, blogs, and instant messaging. It differs from the original in that users can fully customize their profiles with HTML and CSS code, share posts on other platforms, and embed content like YouTube videos.

    Röhm launched the website in November 2020 as “MySpace from around 2007 with a modern tech stack” and it organically gained traction on Product Hunt and Hacker News. Reddit co-founder Alexis Ohanian even made a profile in November 2020.

    Last month, the platform surpassed one million users.

    “There’s no algorithm on SpaceHey, no likes, no feed,” Röhm told Fast Company in a Thursday interview. He added that he’s trying to differentiate the platform from other social media like Facebook and X by not having “content sucking you in all the time and demanding your attention.”

    Röhm tapped into anti-algorithm sentiment previously voiced by the likes of then-Twitter, now-X founder Jack Dorsey. Dorsey stated in June that “we are being programmed” through discovery algorithms and that the real debate was not about free speech but free will.

    Related: Jack Dorsey Says Social Media Has an Algorithm Problem, and Elon Musk Agrees: ‘We Are Being Programmed’

    Röhm’s app also joins a growing list of mainstream social media alternatives. The anti-AI app Cara, for example, gained more than half a million users within a week in June by banning AI art. Part of the reason for its momentum is Meta saying that it could use photos, art, and posts across its platforms to train its AI; Cara was an anti-AI Instagram alternative at an opportune time.

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    Sherin Shibu

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  • What Is Founder Mode and Why Is It Better Than Manager Mode? | Entrepreneur

    What Is Founder Mode and Why Is It Better Than Manager Mode? | Entrepreneur

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    Paul Graham, the founder of famed startup accelerator Y Combinator, coined a new term this week that has taken over social media: founder mode.

    In an article released on September 1 and publicized on X over Labor Day weekend, Graham separates “founder mode” from the traditional “manager mode” route by noting key differences in management styles and organizational structure. Graham’s X post has over 21 million views at press time.

    Related: How to Start a Multi-Million Dollar Company, According to an IBM Engineer Turned Founder

    Founder mode means that the CEO interacts with employees across the organization, not just their direct reports. The startup, even as it grows into a large company, is less hierarchical; the CEO could do “skip-level” meetings with employees, for example. Graham gave the real-world example of Steve Jobs running an annual retreat for who he thought were the 100 most important people at Apple — regardless of where they were on the corporate ladder.

    Manager mode, meanwhile, is less hands-on and involves more delegation to other people. Founders can grow companies and run them effectively without switching to manager mode, Graham stated.

    “Hire good people and give them room to do their jobs,” Graham wrote. “Sounds great when it’s described that way, doesn’t it? Except in practice, judging from the report of founder after founder, what this often turns out to mean is: hire professional fakers and let them drive the company into the ground.”

    Related: How to Start Your Dream Business This Weekend, According to a Tech CEO Worth $36 Million

    Graham gave the example of Airbnb CEO Brian Chesky, who tried to follow conventional “manager mode” wisdom to hire good people and let them do their jobs.

    “The results were disastrous,” Graham wrote.

    Chesky had to pivot to a different “founder mode” style of management and explained in an interview last year that founders have multiple advantages over managers: They have owned every part of the process of building a company, from start to finish; They have built the company up, so they can rebuild it; and they have permission to rebrand the company or make major changes.

    In the past few days since Graham released his essay, the social media world has begun exploring what it means in humorous and insightful ways. One post drew a comparison between micromanaging and founder mode.

    Other posts from women founders addressed the question: Can women be in founder mode too?

    Chesky wrote on X earlier this week that women founders had been reaching out to him since Graham released the essay about how they can’t run their companies in founder mode the same way men can.

    “This needs to change,” he wrote.

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    Sherin Shibu

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  • Open Source AI Has Founders—and the FTC—Buzzing

    Open Source AI Has Founders—and the FTC—Buzzing

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    Many of yesterday’s talks were littered with the acronyms you’d expect from this assemblage of high-minded panelists: YC, FTC, AI, LLMs. But threaded throughout the conversations—foundational to them, you might say—was boosterism for open source AI.

    It was a stark left turn (or return, if you’re a Linux head) from the app-obsessed 2010s, when developers seemed happy to containerize their technologies and hand them over to bigger platforms for distribution.

    The event also happened just two days after Meta CEO Mark Zuckerberg declared that “open source AI is the path forward” and released Llama 3.1, the latest version of Meta’s own open source AI algorithm. As Zuckerberg put it in his announcement, some technologists no longer want to be “constrained by what Apple will let us build,” or encounter arbitrary rules and app fees.

    Open source AI also just happens to be the approach OpenAI is not using for its biggest GPTs, despite what the multibillion-dollar startup’s name might suggest. This means that at least part of the code is kept private, and OpenAI doesn’t share the “weights,” or parameters, of its most powerful AI systems. It also charges for enterprise-level access to its technology.

    “With the rise of compound AI systems and agent architectures, using small but fine-tuned open source models gives significantly better results than an [OpenAI] GPT4, or [Google] Gemini. This is especially true for enterprise tasks,” says Ali Golshan, cofounder and chief executive of Gretel.ai, a synthetic data company. (Golshan was not at the YC event).

    “I don’t think it’s OpenAI versus the world or anything like that,” says Dave Yen, who runs a fund called Orange Collective for successful YC alumni to back up-and-coming YC founders. “I think it’s about creating fair competition and an environment where startups don’t risk just dying the next day if OpenAI changes their pricing models or their policies.”

    “That’s not to say we shouldn’t have safeguards,” Yen added, “but we don’t want to unnecessarily rate-limit, either.”

    Open source AI models have some inherent risks that more cautious technologists have warned about—the most obvious being that the technology is open and free. People with malicious intent are more likely to use these tools for harm then they would a costly private AI model. Researchers have pointed out that it’s cheap and easy for bad actors to train away any safety parameters present in these AI models.

    “Open source” is also a myth in some AI models, as WIRED’s Will Knight has reported. The data used to train them may still be kept secret, their licenses might restrict developers from building certain things, and ultimately, they may still benefit the original model-maker more than anyone else.

    And some politicians have pushed back against the unfettered development of large-scale AI systems, including California state senator Scott Wiener. Wiener’s AI Safety and Innovation Bill, SB 1047, has been controversial in technology circles. It aims to establish standards for developers of AI models that cost over $100 million to train, requires certain levels of pre-deployment safety testing and red-teaming, protects whistleblowers working in AI labs, and grants the state’s attorney general legal recourse if an AI model causes extreme harm.

    Wiener himself spoke at the YC event on Thursday, in a conversation moderated by Bloomberg reporter Shirin Ghaffary. He said he was “deeply grateful” to people in the open source community who have spoken out against the bill, and that the state has “made a series of amendments in direct response to some of that critical feedback.” One change that’s been made, Wiener said, is that the bill now more clearly defines a reasonable path to shutting down an open source AI model that’s gone off the rails.

    The celebrity speaker of Thursday’s event, a last-minute addition to the program, was Andrew Ng, the cofounder of Coursera, founder of Google Brain, and former chief scientist at Baidu. Ng, like many others in attendance, spoke in defense of open source models.

    “This is one of those moments where [it’s determined] if entrepreneurs are allowed to keep on innovating,” Ng said, “or if we should be spending the money that would go towards building software on hiring lawyers.”

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    Lauren Goode

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  • How to Start a Business This Weekend: AppSumo CEO Noah Kagan | Entrepreneur

    How to Start a Business This Weekend: AppSumo CEO Noah Kagan | Entrepreneur

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    Noah Kagan shared how he started AppSumo, a “Groupon for software,” in one weekend in a new podcast episode. The startup cost was $60; AppSumo earned $80 million last year and Kagan is still its CEO.

    In 2010, Kagan was 28 years old and had already experienced what it was like to be the 30th employee at Facebook and the fourth employee at personal finance app Mint.

    “I think I just felt insecure at some of these places,” Kagan told fellow entrepreneur Jeff Berman in a June episode of the “Masters of Scale” podcast.

    Kagan was fired after nine months at Facebook by Mark Zuckerberg and later fired from Mint, too. He realized that dedicating his time to his day job carried a risk — another person could decide to let him go at any time.

    Related: The Author of ‘Million Dollar Weekend’ Says This Is the Only Difference Between You and the Many ‘Very, Very Dumb People’ Making a Lot of Money

    “I think I wanted to prove that I’m smart or prove that I’m successful or prove that Facebook when they fired me, and then when Mint fired me, [that] I can do it,” Kagan said.

    The idea for AppSumo, a marketplace of software deals for small business owners or solopreneurs, was born when Kagan thought there was a way to promote software tools and also get paid for it. He saw that the site MacHeist gave Apple users discounts on software bundles and wanted to try making the same type of discounts available to a broader audience.

    “My interest was letting the geniuses create software, and my skill and my excitement is promotion,” Kagain said.

    The business came together in about 60 hours. First, Kagan found software he wanted to sell: the image-sharing service Imgur. He cold-emailed Imgur’s founder on Reddit and got approval to sell a discounted version in exchange for a cut of sales.

    Related: Here’s Why Reddit Turned Down an Acquisition Offer From Google in Its Early Days, According to Cofounder Alexis Ohanian

    The next piece was meeting with Reddit’s founding engineer to ask for free advertising. He got that too.

    The final part was paying a developer to create a website with a PayPal button and purchasing the AppSumo.com domain name.

    What was the total cost to launch the business? $60 and one weekend of his time.

    AppSumo made $300,000 in the first year, and $3 million in the second, Kagan said in the podcast. It brought in $80 million in revenue last year.

    Kagan now has a net worth of $36 million.

    Kagan said that the crucial part of business was being invested in the problem and getting excited about it.

    Related: This Flexible Side Hustle Is Helping Millions Earn Extra Cash — and Might Be ‘More Attractive’ Than an Office Job

    “I think that’s the thing in business people are kind of missing out,” Kagan said. “They’re chasing AI now or chasing being an influencer. I think find areas [where] you’re like, I don’t know if I’m going to ever get tired of this.”

    Starting a side hustle or finding an extra source of income has an upside — according to Kagan, you have more control over your future.

    “If you can just give up 30 minutes a week, if you can just give up one Netflix show a week, if you can give up one thing a week, and you keep doing it weekly, eventually you can have that business,” he said.

    Related: This Is the Winning Formula for Starting a Successful Podcast, According to a New Analysis

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    Sherin Shibu

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  • How to Create Effective Recognition Programs for Startup Founders | Entrepreneur

    How to Create Effective Recognition Programs for Startup Founders | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In the bustling world of startups, the concept of “sweat equity” often buzzes in the background, unrecognized yet vital. Founders pour their time, expertise and relentless energy into building their ventures from the ground up. While financial investments are typically acknowledged and rewarded, the non-financial contributions — or sweat equity — of these entrepreneurs are just as crucial for success but often go unnoticed.

    The recent surge in tech layoffs and its impact on the startup ecosystem is a testament to sweat equity. In 2024, the tech industry has experienced a significant wave of layoffs, with 60,000 job cuts across 254 companies, including major players like Tesla, Amazon and Google. This development highlights the precarious nature of tech and startup employment, underscoring the importance of acknowledging and valuing the non-financial investments that founders make in their startups.

    Additionally, Microsoft’s recent initiatives, such as the Startups Founders Hub, demonstrate a growing recognition of the challenges founders face and the support they require. This program provides up to $150,000 in Azure credits to help founders develop their startups without heavy initial investments, emphasizing the value of supporting the non-financial contributions that drive innovation.

    Related: How Startups Can Boost Team Morale and Drive Success Through Recognition

    Understanding (and recognizing) sweat equity

    Sweat equity is not just about the number of hours logged; it encompasses all the non-financial investments founders make in their startups. This includes the late nights, the strategic decisions made in the wee hours of the morning, the continuous learning and adapting, and the personal sacrifices. According to a study by the Kauffman Foundation, over 80% of startups are bootstrapped, which means founders are both chief executives and chief investors of their time and skills.

    Recognizing the immense value of sweat equity is a strategic move. A survey conducted by Gallup and Workhuman found that companies with high employee recognition levels are 20 times more likely to be engaged as employees who receive poor recognition. When founders feel valued for their non-financial contributions, it boosts their morale and loyalty, directly influencing their enthusiasm and commitment to the venture. Recognizing these efforts fosters an environment where the intrinsic rewards of entrepreneurship are celebrated alongside the financial gains.

    Creating a recognition program for founders should not be a one-size-fits-all approach. It should be as unique as the startup itself, reflecting its culture and growth stage. For instance, a tech company might recognize breakthrough innovations with annual corporate awards, while a social enterprise might highlight efforts toward social impact. Buffer, a social media management tool well-known for its transparency, extends this value into recognizing its founders by openly sharing the challenges and successes in their monthly blogs, which not only recognizes the founders’ efforts but also engages the community in their journey.

    Related: From Launch to Succession: Tips for Building a Thriving Business

    How to pump up your recognition efforts

    By integrating a few detailed action steps and leveraging insights from successful companies, you can create a robust recognition program that acknowledges the hard work of founders while driving your startup toward greater success and cohesion. Consider the following:

    1. Assess current recognition practices:

    Before crafting a new recognition program, conduct a thorough assessment of existing practices within your startup. According to a Gallup study, only one in three workers in the U.S. strongly agree that they received recognition or praise for doing good work in the past seven days. This highlights a significant gap in recognition at many organizations. Start by surveying founders and key stakeholders to understand what is currently working and what isn’t. This initial feedback will serve as a baseline for developing a more impactful recognition strategy.

    2. Develop personalized programs aligned with values:

    Personalization is key in recognition programs. A study by Deloitte found that organizations with high-performing recognition practices are 12 times more likely to have strong business outcomes. Take inspiration from companies like Zappos, which tailors recognition strategies to match its corporate values and unique culture. For instance, Zappos offers “Co-Worker Bonus Programs” where employees can award each other monetary bonuses for going above and beyond. Aligning the program with your startup’s values ensures it resonates well with the founders and reinforces the behaviors that are critical to your startup’s success.

    3. Foster peer recognition and celebrate achievements:

    Peer recognition can significantly enhance workplace morale and productivity. A report from SHRM/Globoforce found that peer-to-peer recognition is 35.7% more likely to have a positive impact on financial results than manager-only recognition. Encourage a culture where founders and team members frequently acknowledge each other’s efforts. This can be facilitated through platforms like Bonusly, where employees can give each other micro-bonuses that add up to meaningful rewards. Celebrating achievements, big and small, ensures ongoing motivation and engagement.

    4. Continuously evaluate and adapt recognition efforts:

    Effective recognition programs require ongoing evaluation to stay relevant and impactful. Regularly gather feedback through surveys, focus groups and one-on-one interviews to understand the effectiveness of your recognition efforts. Companies like Salesforce exemplify this approach through their “V2MOM” (Vision, Values, Methods, Obstacles, and Measures) process, which involves continuous feedback and goal alignment across the company. This method ensures that all team members, including founders, are aligned and can contribute to the evolution of recognition efforts. By maintaining a dynamic feedback loop, you can make data-driven adjustments to the program, ensuring it evolves with your startup’s needs and continues to motivate and inspire your team.

    Related: The Psychological Impact of Recognition on Employee Motivation and Engagement — 3 Key Insights for Leaders

    By using such a dynamic and inclusive approach, startups can ensure their recognition programs remain effective and responsive to the needs of their founders and team members.

    Developing a founders’ recognition program is about nurturing a culture that values each drop of sweat that goes into a startup. Such a culture accelerates growth and cements a foundation of loyalty and mutual respect that can endure the challenges typical of the startup world. As startups continue to evolve, the recognition of every contribution, financial or otherwise, will remain a cornerstone of sustainable success.

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    Mike Szczesny

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  • 6 Brand Design Tactics That Will Make You Stand Out | Entrepreneur

    6 Brand Design Tactics That Will Make You Stand Out | Entrepreneur

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    How many times have you walked past a storefront, perused a grocery store aisle, or scrolled through your Instagram feed and experienced a little “I want that!” ping to your brain after seeing a particularly compelling image? That, in a nutshell, is the power of great design.

    According to research from Insights in Marketing, 93% of consumers say a product’s appearance is the most important factor in their purchasing decisions, and 85% say they’re heavily influenced by the colors of a product or brand. And because the average consumer spends so much time looking at their phone, brands have more ways than ever to make a visual impact. Bankrate found that 48% of social media users have impulsively bought something advertised to them on social media, and a whopping 72% of Instagram users base their buying decisions on content they see on the platform.

    So, in a time when consumers are endlessly bombarded with brands, how do you create something that stands out? Something unconventional and unexpected, but still appealing to the established tastes of your customers? We asked some founders who leaned on design to build best-selling brands. One common strategy? They all looked at their categories and figured out what wasn’t there, and designed into that blank space.

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    Frances Dodds

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  • 3 Ways to Navigate the Journey from Entrepreneur to CEO | Entrepreneur

    3 Ways to Navigate the Journey from Entrepreneur to CEO | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Based on Noam Wasserman’s The Founder’s Dilemma, 4 out of 5 entrepreneurs step down as CEO, either because they discovered they weren’t fit for the role or because investors ousted them from the company. This adds up to the notion that entrepreneurs rarely make good CEOs.

    However, a recent study showed that companies with founder-CEOs were valued 10% higher during IPO. There’s a premium associated with having the founder as the top executive when a company goes public.

    Successful entrepreneur-CEOs, such as Jeff Bezos of Amazon and Larry Ellison of Oracle, led their companies to massive growth before stepping down as chief leaders. I started my entrepreneurial journey at a young age and eventually established Admitad in 2009, which has since grown to become one of the world’s largest partner marketing networks, consistently reaching over 500 million customers globally every month. After years of growing the company and acquiring several businesses, we decided to consolidate all entities under the wing of a new parent company, Mitgo, where I currently serve as the CEO and remain the sole owner.

    Here are my three key lessons for the transition:

    1. Know when to evolve as an entrepreneur

    Entrepreneurs and CEOs have distinct roles. Entrepreneurs are visionaries who create and transform groundbreaking ideas into successful, viable businesses. CEOs, on the other hand, execute the vision and build the infrastructure for the business to succeed, scale and adapt.

    While many entrepreneurs can successfully grow their businesses, they often struggle to move beyond the entrepreneurial level of sustainability. To reach a larger scale, a startup needs a CEO. Embracing this natural evolution is essential for achieving true success.

    To me, the realization came when I noticed a decline in our business’s growth. We needed to transition to another stage of development and implement a management system.

    Recognizing the need for change and having the courage to take action are vital aspects of leadership. To become a CEO, you must develop strengths in structure, organization, and delegation. It’s a cognitive, proactive and deliberate process. It requires learning new skills, adopting new systems, and trusting others to make critical decisions.

    Related: Here Are the Key Traits of a Top-Tier People Leader

    2. Nurture leaders within the company

    Entrepreneurs often start their journey alone. Even when a small team joins, the company structure remains informal, with founders taking on multiple roles. However, as the organization grows, entrepreneurs must relinquish some control by shifting from a hands-on approach to delegating crucial tasks to trusted leaders.

    Becoming that thin throat for everything is not a good thing. To create something great, something bigger, you have to form leaders within your company. Nurturing leaders goes beyond simply assigning tasks to individuals. It involves creating a culture that values and fosters leadership qualities at every level.

    As a CEO, you must empower leaders to make critical decisions, take ownership and drive the company’s mission forward. Decentralization means letting go of a tightly controlled ship that relies on a top-down approach to decision-making.

    Once you stop micromanaging every detail of the company, you can focus on larger strategies to scale your business and ensure its long-term success. To implement this principle, Mitgo now has business units led by specific individuals who act as CEOs of their respective units. They still report to a board but have been trained with the necessary skills to lead.

    3. Build a sustainable business — don’t just create a “cash cow”

    It’s normal for entrepreneurs to build a business to make lots of money. After all, who doesn’t enjoy significant revenue and profitability? So, founders typically focus on quick wins, immediate profits and short-term gains.

    But every visionary entrepreneur should embrace a deeper and more enduring concept: building a sustainable business. We need to build companies that are transferable and will continue to work even when we’re out of the picture.

    It starts with the legal. When the founder is gone, and they are the only founder, the company has no choice but to die. I want my company to live long after.

    Building the legal foundations to make the business transferrable is just the start. As a CEO, you have to pave the road that others can follow without the risk of failure. This means putting signposts to guide them along a clearly designated path. It also means realizing that they all have families and that the decisions you make can impact them.

    Related: 8 Ways to Turn a Good Leader Into an Exceptional One

    The leadership qualities of a good CEO

    Entrepreneurs are born leaders. From an early age, they are inherently creative and possess the skills to make things happen. During the early stages of the business, they lead by example and play a crucial role in driving the team’s success.

    However, transitioning to a CEO role requires additional leadership qualities. Being a good CEO means acknowledging that you cannot do everything alone. You must delegate responsibility and empower the team to take ownership of their work. You must be receptive to feedback and listen to what others have to say.

    In a constantly evolving business landscape, you must be willing to pivot when necessary and make well-informed and timely choices. You should also take accountability for the outcomes of your decisions and stand behind them.

    Furthermore, you should continue to encourage a culture of innovation and proactivity. This includes promoting a forward-thinking mindset and staying on top of trends. As CEO, you must continue to seek out opportunities and address potential issues before they arise. Remember, you are shaping the future of your organization.

    In the initial stage, you are the nucleus that holds the whole team together. At some point, you realize you can’t do it on your own. You take people with good soft skills, teach them the hard skills and give them time to grow. You rely on them to help lead the company while you pursue strategies to grow the business. That’s how you become a CEO.

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    Alexander Bachmann

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  • Craft a Winning Pitch Deck That Wows Investors | Entrepreneur

    Craft a Winning Pitch Deck That Wows Investors | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    It takes both art and science to create a pitch deck that will result in funding. You must be able to express the idea for your company clearly and concisely while simultaneously appealing to the sensibilities of potential investors. The average time spent by investors studying decks is approximately three minutes and forty-four seconds. Therefore, it is pretty essential to create a fantastic first impression in a short amount of time.

    What investors want in a pitch deck

    Savvy investors look for certain types of information when evaluating pitch decks. Skipping over or only briefly glossing over these key details can make or break your ability to secure funding. A pitch deck gives potential investors a thorough grasp of your company. Seeking an emotional bond that goes beyond financial gain, they inquire about the goals and objectives of your organization. They require a concise synopsis of the product or service that highlights its special qualities and advantages. A thorough target customer profile that goes beyond demographics to understand their challenges and perspectives is also necessary for investors. They are looking for reliable total addressable market statistics as well as an accurate analysis of the competition environment. It is essential to have a well-considered go-to-market plan backed by specific traction measures. Investors want to see your business plan, financial forecasts, goals for fundraising and a profile of your competent staff. Effectively addressing these issues is essential to winning their support for long-term success.

    Related: 3 Key Things You Need to Know About Financing Your Business

    Tips for improving your pitch deck

    Carefully crafting your pitch deck slides and overall presentation can truly make or break your ability to secure startup funding. Keep these tips in mind:

    Know your audience

    Gaining a deep understanding of your target investors should be a top priority when creating your pitch deck. Avoid the rookie mistake of only including information you personally find interesting or want to share about your company. Be ruthlessly audience-centric in your approach.

    Do extensive research into your investors’ interests, motivations, goals and pain points. Conduct stakeholder interviews and analyze past investments to identify their preferences. Adapt your messaging, design choices and content to closely align with your investors’ worldview, not just your own.

    Speak directly to your investors’ needs and concerns. Put yourself in their shoes. Ask yourself, what excites them? What keeps them up at night? What past investments have they made and why? What types of language and messaging appeal to them?

    Emphasize design

    Design choices are critical for an impressive pitch deck. Avoid information overload and leave whitespace for a clean design by prioritizing simplicity and clarity. Begin with a visually appealing presentation template that provides polished and unified graphics that adhere to presentation best practices. Customize these templates to reflect your company’s identity. Use high-resolution, relevant visuals and photos, keep the text concise, and keep fonts, colors and styles consistent throughout. For a clean, professional appearance, use readable word sizes, high-contrast color schemes, and strategic alignments. Consider modest movements and transitions for increased impact, but avoid anything distracting or unprofessional.

    Make the ask clear

    Being direct and unambiguous in requesting funding is critical. Don’t make investors work to figure out what you actually want from them. Clearly state your need for cash and the amount of money you want to raise right away. Explain how you plan to use the money and how it will help the business grow by doing things like hiring engineers or adding more office space. Link the use of the fund to concrete goals. This will give investors a sense of time. Don’t make unrealistic predictions; instead, be honest about your plans and stress the return on investment (ROI) for investors. Avoid using hard-to-understand jargon, and keep your language simple. Also, use graphs and charts to make your ideas easier to understand. Lastly, add “contingency buffers” to your conservative projections to show that you can be flexible and build trust.

    Tell a compelling story

    Structure your content strategically to craft an emotive, memorable narrative. Hook investors’ attention immediately. Make them care about the problem you’re solving. Build intrigue around your company as the hero. Walk investors through your origin story, product innovation, traction and team. Sequence key information and visuals to build momentum, culminating in a call to action to invest.

    Take your audience on an informative yet entertaining journey, mixing logic and emotion. Outline a vision that inspires investors to join your mission.

    Related: 7 Questions Every Founder Should Ask Potential Investors

    Exude passion

    It’s crucial to convey genuine excitement and passion for your company’s purpose, product and growth potential. Investors invest in people and teams as much as they do in raw ideas. Let your authentic enthusiasm shine through. Share what drives your own personal commitment and investment.

    Be professional but also personable and relatable. Storytelling mixed with vulnerability builds an emotional connection that drives investors to take a chance on you. If you don’t show passion and confidence, why would they?

    Using a strategic, audience-centric approach, you can create a pitch deck that genuinely resonates with investors and secures the funding you need to take your startup to the next level. The work required will be well worth it.

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    Pritom Das

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  • How to ensure an ethical acquisition for your startup | TechCrunch

    How to ensure an ethical acquisition for your startup | TechCrunch

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    When you build a startup, the best shot you have at seeing a big payday is becoming an acquisition. Sure, a handful of startups end up going to IPO. But the likelihood of acquisition beats your chances of going public by a ratio of 10 to one.

    Unfortunately, the exciting possibility of an acquisition leads new founders to make all kinds of mistakes. They end up losing out on much better deals, huge sums of money and even years of their lives stuck in post-acquisition work that they can’t stand.

    I know this from experience. In my early days as an entrepreneur, I ran into some of these pitfalls. In my work advising founders over the years, I’ve had many founders come to me too late, after they’d already fallen for some investors’ unethical practices.

    And since my company, Awesome Motive, has acquired numerous small businesses in ways aimed at helping them grow, I’ve seen that founders can take steps to ensure ethical acquisitions with founder-friendly terms. When they do, everyone comes out ahead — including the acquiring company.

    Here are some tips to watch out for when considering an acquisition, and how to protect yourself.

    Keep proprietary data hidden

    One of the most unethical things some investors do, oftentimes in private equity, is sensitive information mining. They convince you that they’re so excited about the possibility of acquiring your startup for a big figure, but first need to “learn more” about how you operate. At the same time, they may secretly have another company in their portfolio that’s considering offering similar solutions to yours, so they bait you into giving up your intellectual property and proprietary trade secrets.

    An acquiring company should be able to look at your revenue, costs, and other basics to offer a fair valuation without needing access to any of your secret sauce.

    Yes, you can have them sign an NDA and guarantee that they will delete any information and not share it with others. But they can’t delete it from their own brains. They can take what they learn from you and apply it elsewhere. I fell for this. I was a new founder and didn’t know any better.

    An acquiring company or group should be able to look at your revenue, costs, and other basics to offer a fair valuation without needing access to any of your secret sauce. Don’t let them see internal processes and other proprietary information until the sale has gone through.

    Keep deals simple — especially the terms

    One of my mentors told me, “You name the price, I name the terms, and I will always win.” I’ve seen this truth play out for founders all too often. They request a big price for an acquisition, which the other party seems to accept. That figure then goes high up in the contract, which makes it feel real.

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    Carrie Andrews

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  • Who Is Ryan Cohen? From Chewy Founder to GameStop CEO | Entrepreneur

    Who Is Ryan Cohen? From Chewy Founder to GameStop CEO | Entrepreneur

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    What do pet supplies and gaming have in common? Ryan Cohen.

    Cohen, 38, is the founder of Chewy.com, an online pet supplies retailer valued at $16 billion.

    However, he transitioned from e-comm entrepreneur to a stock market wiz when he purchased a 13% stake in GameStop in 2020 – making him the company’s single largest investor and earning him a reputation as the “king” of meme stocks, after the 2021 craze that led to a 2,500% increase in shares (and as seen in the 2023 film Dumb Money).

    Now, he’s the CEO, president, and chairman of Gamestop.

    Here’s what to know about billionaire Ryan Cohen.

    Who Is Ryan Cohen?

    Ryan Cohen was raised in Montreal, Canada. His mother was a teacher and his father, Ted Cohen, was an entrepreneur. Cohen said his father is his greatest inspiration and supported his decision not to go to college and pursue entrepreneurship instead, he wrote for Entrepreneur in 2020.

    He started as a businessman at age 15 by collecting fees from e-commerce site referrals, per Forbes.

    Cohen went on to co-found Chewy.com in 2011, which he said was inspired by his dog Tylee, who passed away in July, he shared on X.

    Cohen grew the Chewy brand by “combining the experience of the neighborhood pet store with the convenience of shopping online was a key differentiator,” Cohen wrote in his piece for Entrepreneur. Chewy also focused on providing fast shipping and competitive pricing.

    The company prioritized a “hyper-specialized experience” with Cohen’s belief that building relationships with his customers was “far more valuable than optimizing for short-term profits.”

    RELATED: ‘That Act of Kindness Meant So Much’: Chewy’s Customer Service Is Melting Hearts

    With a good product and the help of several investors, Chewy sales grew from $205 million in 2014 to $423 million in 2015, Cohen wrote in Harvard Business Review.

    The company eventually reached $3.5 billion in annual revenues before PetSmart bought the company in 2017 for $3.4 billion, per Forbes.

    Cohen left Chewy in 2018.

    In August 2020, Cohen bought a 10% stake (which he later bumped to 13%) in GameStop for $76 million in hopes of helping to revive the company, per Forbes.

    His fortune spiked in 2021 following the GameStop “meme stock” saga — when amateur traders on Reddit noticed that Wall Street was short-selling the stock, so they bought shares to drive the price of the stock up and “squeeze the short positions of hedge funds,” according to The Trade.

    Cohen first joined Gamestop as executive chairman in June 2023 before taking over as CEO in September.

    Per a company press release, he won’t be receiving compensation.

    He Has an Active Presence on X

    In addition to his entrepreneurial endeavors, Cohen has developed a reputation as an X personality. He often pokes fun at himself and corporate America.

    What Is Ryan Cohen’s Net Worth?

    Thanks to his work at Chewy, Ryan Cohen has an estimated net worth of $3 billion, according to Forbes. His fortune has nearly doubled since 2021.

    Apart from his investments in Chewy and GameStop, Cohen also became Apple’s single largest investor in 2020, purchasing 6.2 million shares, according to TheStreet.

    Additionally, he also bought stock in Bed Bath & Beyond last year, but soon sold the shares for $68 million. He wrote a letter to the company’s board offering guidance to improve management.

    Cohen is also said to own millions worth of stock in Alibaba and Nordstrom.

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    Sam Silverman

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  • 7 Questions Every Founder Should Ask Potential Investors | Entrepreneur

    7 Questions Every Founder Should Ask Potential Investors | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    When I’ve pitched investors in the past, I prepare for the questions they’ll likely ask me, from market opportunity and size to financial metrics and timeline. From my own experiences and having consulted for multiple founders, I’ve learned that it’s just as important to interview your investors as it is for them to be convinced by your pitch.

    Choosing a partner goes beyond securing funds; it’s about finding a partner who believes in your vision and can contribute to the growth and success of it. Similar to a marriage, the investor-founder relationship should be built on trust, transparency and shared values. Take the time to make an informed decision, as it will significantly impact your company’s trajectory.

    Below are seven questions, alongside specific case studies, that founders should ask investors to help ensure a mutually beneficial partnership.

    1. How do you define your role as an investor?

    I’ve heard many responses to this, ranging from an investor wanting to be a resource to a decision-maker, which is why it’s crucial to ask this. Elle Lanning, Managing Director at Camino Partners and also a key member in the growth of KIND Snacks (currently valued at about $5B), always asks this question because both the investors and founders will have strong points of view. Lanning explains how “passion can be mistaken as direction,” and she’s persistent about reminding prospect and current investors that “while the Camino Partners team has their own point of views, it is up to the entrepreneurs and day-to-day leaders of a given company to run the business and make the best decisions for them.” The investor role is very diverse, particularly as some investors will see themselves in a governance capacity.

    KIND Snacks is a great case study for this question, as the founder, Daniel Lubetzky, bought back the stake owned by private equity firm VMG Partners for $220M in cash and notes. Lanning explains, “VMG was a solid partner for the time we worked together, but we reached a place where our objectives were different. We were fortunate to have run KIND in a healthy and sustainable way, so we had a lot of options when we decided that Daniel and the KIND team were best suited to continue to lead the brand’s growth.” It was a risk, but the result paid off, as the start-up is now valued at about $5 billion.

    Related: 5 Questions Every Entrepreneur Should Ask Potential Investors

    2. What is your exit strategy?

    Having an understanding of the timeline expectation and eventual exit strategy for the investor will help you determine if your future plans are mutually aligned.

    Related: When Should Business Owners Start Developing an Exit Plan? Here’s What You Need to Know.

    3. Can you provide references from other companies you have invested in?

    In line with the saying, “If you don’t know the horse, you check the track record,” it’s crucial to gather insights about the investors’ style, reliability and how they work with partner companies. By speaking with other founders to get references about investors, you’ll get a candid opinion of the personalities, best skills and added value that the investors may be able to provide. Again, aligning values and personalities will set you up for the best partnerships.

    4. What value are you able to bring beyond capital?

    Alongside funding, investors can offer valuable advice, connections and industry expertise. Have they invested in similar companies before? At times, great advice or case studies can support your company even more than their investment. Understanding the additional support and value an investor can provide is paramount.

    Related: Investors Are Overlooking the Gig Economy. Here’s How to Unlock Its Untapped Value.

    5. What are your expectations for growth and performance?

    The response to this question will help you assess if the investor has realistic expectations and if the expectations align with your plans. Adam Harris, Founder and CEO of Cloudbeds, a company founded in 2012 that raised about $250M, prioritizes clarity in outcome alignment. Harris explains, “You need to know if your investors are underwriting your deal to require a 2x, 3x, 4x, or 10x return (or whatever the number is). This answer will dictate the amount of risk they’re willing to pursue and the type of capital investments that follow. Know when enough is good enough for the outcomes you are seeking (future fundraises, liquidity events, etc.).”

    Most investors don’t share their thoughts about underwriting a business, but knowing their outcome requirements will align you with investors at every growth stage.

    Harris suggests that all questions to investors center around the following:

    1. How do you incentivize and keep incentivizing me to build what we both want?
    2. How do you and I stay aligned with risk appetite, enterprise value extraction and what’s right for the business?
    3. How do you underwrite my deal?

    If you can get full transparency on responses for the above, you’ll have a better shot at alignment, allowing you to move faster to focus on the big objectives.

    Related: How PR Can Attract Investors and Add Value to Your Startup

    6. How often do you expect to meet after funding?

    Some investors are going to be far more high-maintenance than others, and communication styles can make or break a partnership. You do want a decent amount of interaction. Investors can help find clarity with high-level decisions, but I suggest they stay out of the details, as this may weigh and slow you down.

    7. We have a challenge with this issue. Do you have any insight into how we may help solve it?

    The response to this can be very telling because it will shed some light on how the investor thinks, works and the type of value they can offer. It also demonstrates to the investor that you are open to their feedback and value their expertise as a potential partner.

    Choosing the right investors goes far beyond getting capital. Through open and honest conversations, look to find partners who believe in your vision, feel good compatibility and offer a funding package that will contribute to the growth of your business. Take some time to make the most informed decision possible and ensure clarity across all questions and expectations. If it doesn’t feel like love at first sight, reassess.

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    Elisette Carlson

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  • A Nurse Turned $500 in Savings Into $100 Million in Sales | Entrepreneur

    A Nurse Turned $500 in Savings Into $100 Million in Sales | Entrepreneur

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    In 2013, Courtney Adeleye was working as a registered nurse and searching for a product suitable for treating natural hair.

    “There were not many brands that used natural ingredients and specialized in healthy hair growth at the same time,” Adeleye recalls. “So, I started mixing my own products at home and infused them with vitamins, nutrients and healthy ingredients.”

    Adeleye documented her homemade hair care routine on YouTube, and it wasn’t long before she gained a large following of people who wanted to know her secret — and purchase products from her directly. So, with just $500 to her name, Adeleye developed a few deep conditioning treatments and sold them to her fans.

    Those initial offerings would grow into The Mane Choice, Adeleye’s hair care solution for healthy locks, featuring formulas free from mineral oil, petrolatum, parabens, sulfates and formaldehyde.

    Adeleye says she sold $10 million worth of products from her home during her first three years in business, and within another two, she’d partnered with more than 60,000 retailers across the U.S. — achieving $100 million in sales and an IPO by 2019.

    Last year, Adeleye launched Olbali, a health-focused direct-selling company, to house her private brands, including The Mane Choice, Cool Coffee Clique, Foolproof Body and more.

    Related: How Private Equity Investors Gave This 17-Year-Old Beauty Brand a $100 Million Makeover

    Entrepreneur connected with Adeleye during National Black Business Month to hear more about how she overcomes the limiting perceptions Black-owned businesses often face and the 10 secrets that helped her see so much success.

    “I have been asked if my products are for Black women only despite having extensive diverse marketing.”

    Adeleye says she didn’t become a nurse because she wanted some people to live healthier lives — she became one because she wanted everyone to live healthier lives. The same is true of why she founded a beauty and wellness business.

    Her company’s products aren’t just for Black consumers, but for everyone who can benefit from them, Adeleye says.

    Courtesy of Olbali

    Still, all too often, Black founders are unfairly pigeonholed, and the Black-owned label can actually work against their businesses, according to Adeleye.

    “I create healthy products for people to help them live healthier lives,” she explains. “However, I have been asked if my products are for Black women only despite having extensive diverse marketing.”

    Research from McKinsey & Company highlights how pervasive the issue is.

    Like all businesses, beauty brands must stay connected with their core shoppers and pursue growth opportunities — yet “there’s also a persistent myth in the beauty industry that Black-brand products can only be sold to Black consumers,” per the report.

    Related: 6 Ways You Can Support Black Businesses Long-Term | Entrepreneur

    Adeleye says she “must be more intentional” when it comes to displaying diversity across her brands, ensuring her business can realize its full growth potential “on a mass level.” “My goal has always been to be diverse and inclusive,” she says. “So, being intentional is something that comes natural to me.”

    “You have to believe in yourself before anyone else will.”

    Adeleye says following 10 key guidelines helped her achieve her many milestones to date — spanning product innovation, marketing tips, social media strategy and more.

    Here’s what she suggests for entrepreneurs who are ready to level up their businesses:

    1. Be authentic.

    2. Don’t meet your customer expectations…exceed your customer expectations.

    3. If you don’t think you have a great product, you need to try again before releasing it.

    4. Informal content can be more powerful than formal content.

    5. Be a walking billboard for your brand.

    6. Engage with your customers on all platforms.

    7. Show up consistently on social media.

    8. Bring your brand to life (off social media) by doing grassroots events and activations.

    9. Invest more in your customers and micro-influencers versus macro-influencers.

    10. Fix the brand before you start to spend money on marketing. Great branding can exceed great marketing.

    Adeleye’s learned a lot over the course of her entrepreneurial journey, but perhaps her best piece of advice? “You have to believe in yourself before anyone else will.”

    “If you don’t believe your business is just as good or even better than the next business, it never will be,” Adeleye says. “There is no such thing as an oversaturated industry. I say, ‘An industry cannot be oversaturated if I am not currently producing in it.’”

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    Amanda Breen

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  • This Is What Founders Really Earn, According to a New Report | Entrepreneur

    This Is What Founders Really Earn, According to a New Report | Entrepreneur

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    Starting a business from the ground up isn’t easy. While it might pay off in the end, many founders take-home humble paychecks — and some take home nothing at all.

    According to a report from the accounting firm, Pilot, of 500 startup founders surveyed, almost half (46%) get paid less than $100,000 annually, with the average salary among founders standing at $114,000 a year.

    Over 5% of founders get paid nothing.

    Waseem Daher, co-founder and CEO of Pilot, told Inc that — as a three-time founder himself — he understands the hesitancy of entrepreneurs to pay themselves generously, as they often redirect those funds towards more pressing business needs such as hiring employees and operations. However, that humbleness can also backfire, he says.

    Related: Some CEOs Took a Pay Cut — It Would Still Take Workers 186 Years to Make the Same Salary

    “If you’re constantly distracted, wondering how you’re going to pay rent or personal expenses this month, you’re not going to be the best executive for the business,” Daher told the outlet.

    The biggest difference in founder salary, according to the report, has to do with company funding. Founders at “bootstrapped” companies (self-funded and operating with their own resources) were significantly paid less on average than founders at companies that were VC-backed (supported by investors or venture capital firms).

    Fifty percent of bootstrapped founders receive a salary between $1-$100,000, while 60% of VC-backed founders are paid between $50,000 and $150,000, per the report.

    Related: Google and Meta Execs Rake in Big Bonuses Despite Industry-Wide Layoffs

    For those startup founders who are not seeing financial compensation yet, fear not. Dozens of founders have had their hard work pay off — literally, after being acquired by larger companies. Instagram founders Kevin Systrom and Mike Krieger sold to Meta for $1 billion in 2012; Whole Foods founder John Mackey sold to Amazon in 2017 for $13.7 billion; and LinkedIn founder Reid Hoffman sold to Microsoft in 2016 for $26.2 billion.

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    Madeline Garfinkle

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  • So You Sold Your First Business and Now You’re Starting a New One — Here’s How to Make Sure It’s a Success. | Entrepreneur

    So You Sold Your First Business and Now You’re Starting a New One — Here’s How to Make Sure It’s a Success. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    For many entrepreneurs, their first venture is like a child. They pour their passion and dedication into its growth, and when the time comes to exit, the sense of loss and uncertainty is palpable. This feeling won’t last forever, though, and as Richard Branson once said, “Business opportunities are like buses — there’s always another one coming along.”

    The challenge is making a success of your second enterprise, swerving the dreaded “difficult second album” syndrome — that way, when you go on to your third, fourth or fifth business and beyond, you continue to develop your entrepreneurial abilities.

    Young entrepreneurs who’ve made a fortune from their first business often wonder whether they were just lucky; whether they happened to catch a wave at the right moment. They know they are good, but are they great? Did they really earn their acquisition accomplishment — and crucially, can they do it all over again?

    The only way to prove oneself is to repeat the process. That’s what I did, alongside my business partner Chris Lord, selling our follow-up business for more than double the value of the first. This wasn’t easy, but I believe that every founder thrives on purpose — and if you’ve nailed it once, you clearly have the experience, skills and resources to create something amazing again. Here are seven top tips for making a success of your entrepreneurial sequel.

    Related: From Idea to Successful Exit — 8 Lessons Learned From Building and Selling a Startup

    1. Reflect on your past experience

    Before starting your next business, take some time to reflect on your past experience and analyze the factors that contributed to the highs and lows of your previous venture. What worked well and what could you have done better? What skills and knowledge did you gain that will be useful in your next entrepreneurial outing? Use this deliberation to set realistic expectations and to develop a plan for second-time success.

    2. Go bigger or go home

    Having gained valuable insights from your initial venture, it’s time to raise the bar and aim higher. Adopt a bullish and ambitious mindset, and don’t be afraid to fail.

    You’ll likely face increased competition from other companies trying to capitalize on your success. To stay ahead of the curve, you need to be prepared to blow them away with a game-changing new idea or approach.

    While aiming high, it’s crucial to maintain humility and stay grounded in reality. Past victories should not be taken as guarantees for future success. Embrace the opportunity to learn from others and remain open to their wisdom and experiences.

    3. Start with your exit

    Considering an exit strategy from the start is vital, as almost every entrepreneur eventually moves on. Starting with a view of the end helps you focus on building a company that is valuable and attractive to potential buyers, and helps you set the groundwork for a future departure.

    For second businesses particularly, prioritizing the exit process — something you’ve experienced before — provides clarity and guides decisions. Whether selling, going public or passing it on, a clear strategy enhances value and appeal.

    Related: 4 Tips for a Happy Exit From the Company You Founded and Love

    4. Secure funding

    A well-defined exit strategy is also key to attracting financial backers, showcasing a realistic and attainable plan for business growth and ROI. When setting out on your second entrepreneurial venture, it’s wise also to leverage your previous business success by investing some of the profit.

    While you won’t be the sole investor, splashing the cash demonstrates confidence and helps calm any ‘second album’ concerns third-party backers might have. Additionally, your track record of transitioning from a risky bet to a less risky one bolsters investor confidence. As an example, Chris and I’s first venture yielded a 22 times return — eager investors, unsurprisingly, were knocking down the door when we announced our second outing.

    5. Get an idea

    Use the knowledge and experience from your previous venture to your advantage when starting a new one. Do your research, identify your core competencies and focus on your strengths. Don’t be afraid to take calculated risks or try new things (I pivoted from the world of e-cigarettes to sportswear remarkably smoothly). Most importantly, however, identify a clear market need and create a product or service that is truly in demand.

    6. Establish a winning leadership team

    As a post-exit founder, your experience and knowledge are invaluable, but you can’t do everything alone. Build a strong, diverse team of talented individuals — starting with an experienced executive assistant — who share your passion and can help achieve your goals. Surround yourself with extraordinary people who complement your skills and experience, and if you need to offer equity, or a mix of equity and salary, to attract the best talent, don’t hesitate.

    7. Do it fast

    After selling our first company, my business partner and I started our second on the two-hour train ride home. We reflected on what went well and what could have been improved in our initial venture and used that to develop a new idea that we were passionate about. We were willing to adapt to changes in the market and our business environment, and we were open to feedback from our customers and team, but we knew we had to act fast. And we did, with great results.

    Related: 3 Factors to Consider Before Exiting Your Startup

    An exceptional entrepreneurial future

    Having endured the mental and emotional strain of selling their first, beloved business, it’s natural that post-exit founders should find the prospect of starting afresh scary. But let me tell you this: You have what it takes to do it again.

    Keep your eyes on the prize, keep your resolve strong and don’t shy away from challenges. With a brilliant idea, a solid plan and a drive to act fast, you can achieve business success for the second time, banishing the specter of second album syndrome and paving the way for an exceptional entrepreneurial journey in the future.

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    David Newns

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  • 5 Strategies for Navigating a Looming Recession as a Founder | Entrepreneur

    5 Strategies for Navigating a Looming Recession as a Founder | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    As a founder, you must know that a recession can come whether you expect it or not. It is essential to prepare yourself beforehand to have a cushioning effect when it comes. Waiting until it is full-blown before trying to figure out how to survive the recession may be detrimental to both your wellness and the survival of your business.

    To say the least, navigating a looming recession as a founder can be challenging. With careful planning and strategic actions, you can position your business for resilience and even growth during tough economic times. When recession strikes, it will be tough to continue operations, but that doesn’t necessarily mean that the company will be headed for doom.

    This article highlights five of the best tactics that founders can use to navigate a recession from the onset.

    Related: Worried About a Recession? Do This to Prepare Your Company.

    1. Assess your business and financial health

    Often, founders have a hard time separating themselves from their business. This can cause your finances to get muddled up. The first thing you should do as a founder, recession or not, is to separate your finances from those of your business and assess them independently.

    To begin, you need to review financial statements and projections on both personal and business accounts. This is important because a poor condition in one will affect the stability of the other.

    As a founder trying to navigate a looming recession, you should thoroughly analyze your cash flow, profit and loss and balance sheet. You have to ensure that you won’t be leaning heavily on your business for survival and vice versa.

    Also, you need to analyze your business’s financial health. Done properly, your analysis can reveal risks and weaknesses that could threaten your chances of survival when the economy comes crashing. Some of the red flags to look out for are:

    • Overdependence on specific customers or markets: You should try getting more customers or diversifying your market. A good rule of thumb is to ensure that your biggest client brings lower than 10% of your total revenue.

    • High debt levels: During a recession, people don’t generally have much money to spare. So, it might sting when you’re not closing enough deals to offset loans.

    • Inefficient operations: It’s good business to achieve good results with minimal resources. So, if you’re spending more than necessary on operations, you might want to review your processes.

    2. Develop a contingency plan

    Developing a contingency plan is crucial to navigating a recession as a founder. It helps you prepare for potential challenges and uncertainties, enabling your business to weather the storm and come out of the recession in one piece.

    Although it’s unlikely you will predict how things will play out, you can start by estimating how bad things can get. It’s not meant to discourage you. Rather, you should use your estimation of the worst-case scenario to develop a plan to avoid it.

    No matter what your predictions of the future are, it’s good practice to build a cash reserve. One way to do this is by reducing non-essential expenses and negotiating better deals with suppliers and vendors. You might also want to consider moving your workforce to a remote environment to save on property rental.

    While having a robust cash reserve will increase your business’s chances of survival, you need to also make sure that your business cash flow doesn’t take a big hit.

    Related: 9 Smart Ways to Recession-Proof Your Business (Fast)

    3. Monitor and adjust your strategy

    Regularly review and update your financial forecasts to align with changing market conditions.

    Track key performance indicators (KPIs) relevant to your business, such as sales metrics, profitability ratios and customer acquisition and retention rates.

    Gather feedback from customers and employees to identify areas for improvement and understand changing needs. Be agile and ready to pivot your strategy, if necessary, based on the evolving economic landscape.

    Related: How to Talk About Company Finances with Your Team

    4. Seek support and expert advice

    As you plan your way out of the recession, you must be intentional about your network. Join business associations or networking groups to access resources, knowledge and support. Engage with mentors or industry peers who have experience navigating economic downturns.

    You can also consult with financial advisors or consultants who can guide you through financial planning and risk management. The government may also create palliative measures that founders can explore during the recession.

    5. Maintain a positive mindset

    The mindset of the founder will greatly affect how everyone in the company reacts during difficult times. This is why staying calm at all times is one of the qualities that successful entrepreneurs share.

    Be sure to cultivate a calm spirit and positive mindset. It’s important to start building this quality early — you don’t need to wait until there’s an economic downturn before you try to exercise calmness and positivity. At the time, it might be difficult for you to even realize that you’re being reactive.

    Related: 3 Key Strategies That Helped My Business Grow During a Recession

    For your business to survive, you have to meticulously and realistically evaluate your chances. You should begin by drawing a vivid line between your business and personal finances. With a clear view of your business’s financial state and projections, you can make contingency plans and keep track of your survival and growth strategies.

    Importantly, successful entrepreneurs have a solid network of supporters and advisors. It will be smart to connect with them and exchange ideas that might be helpful for navigating a recession. And keep in mind that a positive mindset is worth a million tons of gold. Other entrepreneurs want to associate with people who make them believe that everything is figure-out-able.

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    Judah Longgrear

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  • How Founders Can Demonstrate their Founder-Market Fit to Investors | Entrepreneur

    How Founders Can Demonstrate their Founder-Market Fit to Investors | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    In the early stages, startups often lack impressive numbers to showcase their potential. That’s why investors primarily examine the co-founding team to assess how likely they are to build a thriving company.

    In simpler terms, investors are looking for something called founder-market fit when the founders’ skills, experience, and personal qualities align with what the market needs.

    But how can a founder determine if they have this so-called founder-market fit?

    A background check

    Deep industry expertise can indicate a strong match between the founders and their target market. The ability to execute ideas is vital for early-stage founders, and the more bulletproof they are in their domain, the higher the chance they’ll be able to do it.

    It’s also about knowing what to disrupt and how, because, at its core, a founder-market fit means that the person starting the company has personally experienced the problem they’re now trying to solve.

    In some cases, outsiders have disrupted industries they knew little about, but generally, founders have a much better chance of succeeding if they have a sense of how a specific market works. About 35% of startups fail because the founding team doesn’t know enough about the market and what customers actually need.

    The best way to know an entrepreneur has a founder-market fit is to look at their education, previous employment, and projects. How long have the founders been active in this industry? How well do they know its problems? How badly do they want to change the status quo?

    There are many examples of this: Airbnb’s founders hosted people in their apartments before building a marketplace for homestays; Slack began as an internal communication tool for a company owned by one of the founders — he knew what app his team needed.

    Health tech startup Theranos is a well-known case of the opposite when a lack of industry knowledge — among other things — led to a startup’s failure. Investors were swayed by the founder’s grand vision: they collectively invested $1.3 billion. Unfortunately, they overlooked the significance of the founder’s background.

    The founder, Elizabeth Holmes, promised to revolutionize health care while having only two semesters of chemical engineering classes at Stanford.

    Related: 6 Lessons Entrepreneurs Can Learn From the Fall of Theranos

    Synergy among co-founders

    When a founder presents me with a startup that heavily relies on sales but struggles to articulate their thoughts, it raises a red flag. In such situations, investors should carefully assess the other co-founders in the team, seeking a partner who brings the required expertise — in this example, in sales.

    Founder of Awesomic, a platform that matches web design talents with businesses, Roman Sevast has a background in software development. He takes full responsibility for Awesomic’s technical aspects and product development, while another founder, Stacy Pavlyshyna, is a former digital marketer who handles operations, communications and marketing.

    This serves as a good illustration of where both co-founders bring their domain expertise to the table, and their collaboration enables them to achieve a solid founder-market fit.

    A prominent global example of a synergistic partnership is the relationship between Steve Wozniak and Steve Jobs.

    Related: 5 Expert Tips on How to Choose a Co-Founder for Your New Business

    How to tell investors about founder-market fit

    To increase the likelihood of securing funding, early-stage founders should make sure they communicate their founder-market fit to investors. My several tips:

    • Share specific examples of the co-founders’ industry challenges and how they resolved them.
    • Emphasize accomplishments relevant to the target market, such as previous startup ventures, industry accolades, significant milestones, or partnerships.
    • Present a compelling narrative about a co-founder that showcases their in-depth industry knowledge. Instead of stating “5 years of IT experience,” highlight achievements by saying, “developed a product used by 300,000 clients”.
    • Demonstrate a scalable business model that aligns with market needs and show how exactly it aligns.

    Problem-solving experience

    This does not suggest that successful startups can only emerge from founders with prior experience. Quite the opposite, according to Sebastian Mallaby’s book “The Power Law,” groundbreaking ideas often originate from individuals who are outsiders to the industry.

    These outsiders, however, must possess certain character traits that enable them to achieve a founder-market fit. I’d like to highlight perseverance and curiosity.

    Outsiders should thoroughly study the market to understand their potential customers, launch effective marketing campaigns, and ultimately develop a product that people will find valuable. Curiosity serves as the driving force behind acquiring the necessary knowledge.

    Perseverance is crucial because the market landscape constantly changes, and founders continuously overcome new challenges. We seek to invest in founders who are prepared to adapt to evolving market conditions, meet customer demands and embrace emerging trends.

    Founders never know which particular problems they will face when starting a business. But if they previously solved problems in a chosen market or if they show they have grit, VCs take it as a good sign.

    Related: Beyond the Basics: 5 Surprising Qualities Investors Seek in a Winning Team

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    Vital Laptenok

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  • 3 Key Lessons Business Founders Can Learn From Our Founding Fathers This Independence Day | Entrepreneur

    3 Key Lessons Business Founders Can Learn From Our Founding Fathers This Independence Day | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    247 years ago, a group of men signed the Declaration of Independence and I think we can all agree that when it comes to a “founder’s story,” this one is pretty epic. What is a founder’s story? It tells the tale of how the organization got started, who started it and why they were inspired to start it. A good founder’s story tells much about a company’s principles, history and ethics.

    Wouldn’t it be great if the startup stories of our businesses were as compelling as the story behind the American Revolution? They can be. That’s because the narrative behind how America was founded teaches us three lessons that can help any business owner create their own founder’s story.

    Related: The Most Successful Startup Founders Are This Age, Study Finds (And No, It’s Not Early 20s)

    Lesson one: A good founder’s story is always about people

    When I think of the founding of America, I think about Franklin and Washington, Jefferson and Hamilton and all the other men and women who contributed to our nation’s birth. The bravery and battles for independence in New York, Germantown and Yorktown. The writing of a historic document in a sweltering Philadelphia room during the early summer of 1776. The diplomatic missions to France, the cold winter in Valley Forge, the massacres and revolt in Boston. These are all stories about people that we’ve learned since elementary school — and even today, we feel a connection to the lives of our founding fathers because of the tales that have been told. Shouldn’t our customers and community know the stories about our people too? Of course they should.

    Lesson two: People love to read about risk-takers

    What kind of a person is brave enough to risk their livelihoods and even their own and their families safety for an idea? Who is so courageous that they would stand up and fight — against all odds — to oppose one of the most powerful armies in the world? How passionate about their cause does one have to be in order to defy a king? The risks our founding fathers took were enormous and potentially fatal. The risks we took to found our businesses were not as extreme but that’s not to play down the impact these risks had on our lives. Our customers and community should know about these risks too, shouldn’t they?

    Lesson three: A great founder’s story demonstrates purpose

    America’s founding fathers all have interesting stories. They all took big risks. But why? For them, it was because of a desire to be independent of someone else’s rule. To have the ability to practice religion without fear of persecution. To be able to choose who governs them and not to have that government forced upon them. They had reasons for doing what they did. They wanted to make the world a better place. As founders ourselves, so do we, even in our own little ways.

    Every company has a founder’s story because, like America, every company has to start from somewhere. Of course, your founder’s story probably isn’t as dramatic as the founding of America in 1776. But it’s still your story, and it’s an important story to tell. Knowing this story helps your customers and community better engage, connect and create a relationship with you and your team.

    Related: Unwound: One Founder’s Story of Finding Success in Failure

    So how can this apply to the founding story of our businesses? Let’s put these lessons into action.

    For starters, and like our founding fathers, we must also tell the stories of our founders. Our customers and community should better know us, where we come from, what we like to do, what kind of people we are. They should know a little about our families, how we give back to the community, what we find important in our lives. This is what makes us interesting. This is what connects us to our communities.

    Next, let’s never forget that every business owner takes risks. It’s what sets apart an entrepreneur from an employee. People love stories about risk-takers. Think about some of the greatest startups we know: the founders of HP and Dell launching their businesses in a garage, a food equipment salesman named Ray Kroc who opened his first McDonald’s restaurant, the fledgling startup Microsoft taking on IBM, a small-time investor named Warren Buffett who struggled with just a few clients. We love how these people started from little and took risks to pursue a dream. So make sure your founder’s story talks about the risks you and your partners took to start your business. And then explain why.

    Yes, why. Because most importantly, a great founder’s story also has to include purpose. This explains why you took the risk that you took. Franklin, Jefferson, Washington and all the other founding fathers didn’t want power for themselves. They wanted freedom. And they were willing to risk their lives for that cause. You and I likely didn’t risk our lives to start our businesses, but we did risk other things: money, time, relationships. Why? For me, it was to build a company that would help our clients do things quicker, better and wiser with technology. For Ray Kroc, it was to sell affordable burgers to the masses. For Microsoft, it was to put a personal computer in everyone’s home. What’s your purpose?

    A great founder’s story is about the people who started it, the risks that were taken and the reasons why they took those risks. Sure, there’s a financial motive. But to start a new venture requires more motivation than just money. It requires a passion to do things a little better and a desire to create something that provides value. Or in the case of our own founding fathers, to change the world.

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    Gene Marks

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  • Transform Your Company Culture Without Losing Its Essence | Entrepreneur

    Transform Your Company Culture Without Losing Its Essence | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    For a founder, few things are more challenging than ceding control of a company built tirelessly, often over a lifetime. However, nothing is more necessary if the founder plans to scale their business. And while entrepreneurs usually understand on a fundamental level that the culture that got them “here” won’t take them “there,” they worry about how to grow while maintaining the essence of their organizations.

    As a human capital advisor who specializes in workplace cultures, I can say with absolute confidence that it is both possible and often essential to keep a company’s “secret sauce” as it grows. But that doesn’t mean cultural nuances, like decision-making paradigms, can’t and shouldn’t change. Founders who allow and participate in the act of purposefully growing their cultures will inevitably see their businesses scale faster and become more sustainable over time. Crucially, they can accomplish this while retaining their mission and values, carving out the vital elements of their organizations that need to stay.

    Better understanding the nuances of culture

    For many, defining an organizational culture mistakenly comes down to whether it is simply positive or negative — a great place to work or one that drives good people away. The reality is culture is far more complex. It is defined by a series of behaviors surrounding such areas as power, perspective and creativity along with time, interdependence, communications and inclusion. Every organization is comprised of these normalized behaviors that, in fact, exist along a spectrum. Meaning, for example, an organization doesn’t allow or disallow creativity but, rather, does so by degrees.

    With this in mind, founders should understand that the act of evolving their culture in order to grow can involve both subtle and dramatic changes. What’s more, it can shift the norms of their companies in ways that are far more nuanced than most initially understand.

    To illustrate, a leader achieving rapid growth might decide that they want to keep most aspects of their company’s culture but needs to ensure siloed team members operate more collaboratively. Additionally, expansion into new geographies might require the organization to become more inclusive to better support team members who bring increasingly diverse perspectives, local knowledge and life experiences.

    Bringing data and analysis to culture-building initiatives

    Similar to human capital-oriented work, culture-building is often considered a right-brain, soft-skill area, leading to inaccurate perceptions about the process of evolving organizational cultures. In truth, there are savvy, data-driven ways to approach this work, always laddering up to big-picture strategy.

    For example, close examinations of institutional materials — from mission statements to engagement data to exit interview records — all inform the beginning of rigorous, intentional culture-building initiatives. This analysis — coupled with deep interviews with founders, as well as in-depth conversations with board members and employees, surveys and walkabouts — reveals a trove of contextual information, providing organizations with the data they need to map out their current versus ideal culture and design work streams that facilitate the desired cultural transition.

    This rigorous, context-driven approach helps remove the guesswork from culture-building initiatives. In addition, it ensures founders feel heard, respected and assured the companies they’ve built retain their most critical cultural elements, even with potentially different looks and feels in phase 2.0 of their evolutions.

    Embracing the act of letting go

    There is no escaping the fact that significant organizational expansions usually require founders to step back from many of the responsibilities they previously championed and often enjoyed. Understanding this, they would be wise to prepare themselves for moments in which ceding control creates a complex mix of feelings, including concerns that their organizations and respective cultures are changing too radically as well.

    Within my own firm, our founder Dr. Foster Mobley has lived this change. Reflecting on his experience, he advises other founders to maintain healthy distances from organizational divisions or areas identified for transition. He also believes outside experts can help differentiate between situations in which a founder’s involvement is warranted and those that are merely churning up their emotions. According to Foster, who himself navigated the transition from CEO to Chairman Emeritus, nothing brought more peace of mind concerning the culture and legacy of his company than knowing he shared the vision and values of the leaders he brought into the organization to shepherd its growth.

    Given the blood, sweat and tears founders pour into their organizations, it is more than understandable that they feel protective over the direction of their companies, even as they seek to take a step back from their previously defined roles. Fortunately, it is possible to honor these heroic efforts and build them into well-established origin stories and corporate narratives, even while culture-building to help usher in new eras of growth.

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    David Eaton

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  • 3 Things Founders Need to Know About Liquidity | Entrepreneur

    3 Things Founders Need to Know About Liquidity | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Is it easier or harder to build a successful startup now than in the past? In many ways, it’s so much easier to launch a startup today than in the past; the ecosystem is full of services, access to information is instant, the startup world is now a global industry where so much has been templatized and millions of “how-tos” are available, and a proliferation of venture capital, incubators and accelerators are more available than ever.

    There are newer challenges that founders face today, however. Competition is global, the pace of innovation is constant and ever-accelerating, expectations are higher, and the road to IPO is longer. This last point could be the most interesting one; staying private longer changes the whole entrepreneurial journey and calculation. The clear path to liquidity via IPO or acquisition has changed, and leaders need to adjust.

    Related: 4 Ways an Entrepreneur Can Increase Liquidity

    How did we get here?

    Today, there are around 1200 unicorn companies globally. There have never been this many unicorns or privately owned companies valued over $1 billion USD before. The two biggest reasons a founder takes their company public is to have access to capital and to provide liquidity for shareholders. However, today, the abundance of available venture capital has made it possible for founders to keep increasing valuations and postponing a liquidity event. Plus, there are now other ways shareholders can reach liquidity without necessarily going through an IPO or an acquisition.

    Staying private delays the costly management and regulatory headaches of being publicly traded. Given all of the scrutiny and costly overhead of compliance and reporting required to run a public company, as a founder, you would probably prefer to grow outside of the public market. How does staying private longer affect founders, investors, employees and their company? And how does this change the way you operate?

    A founder’s guide

    Ten years ago, today’s unicorns would have gone public by now. Founders, VCs and employees would have converted their early investments and hard work into material wealth, however, that’s not happening in this market like it was in the past. Today, there are more options for liquidity for all equity stakeholders in companies without necessarily going through an IPO or acquisition. With more options for liquidity and a new entrepreneurial journey, founders should consider the following as they grow their companies.

    To start, if this is your first time starting your own company, get a board member or advisor who is knowledgeable about different stock incentive plans, how to structure them, tax implications, etc. Find members with a broad perspective coupled with deep expertise in your market, and seek out people who are experienced investors.

    Related: How Can Mentors Give Feedback to Founders without Discouraging Them

    The second thing to understand is that balancing employee compensation is a key tool in your growth plan. How much will employees receive in salary vs. what will they receive as equity compensation? For most startups, the biggest expense is salaries. We all want top talent, but sometimes we can’t afford it; this is where equity comes in. Equity gives employees skin in the game. They are part owners, and if the company succeeds, they’ll directly benefit from it. You get better performance out of employees when they feel ownership as well. However, it’s important to adjust the compensation plan as the company grows. These are a few things to consider:

    • Stage of the company: This directly relates to the risk the employee is assuming for taking this job. For both investors and employees willing to take the greater risk, they deserve the higher reward.

    • Job function and level: Higher-level employees might expect higher salary compensation while lower-level employees might be more willing to accept lower industry pay in exchange for greater equity compensation. It’s mostly about the stage in life they are in; as younger employees often have fewer responsibilities, they are more willing to take a lower salary. People with families usually can’t give up as much in salary compensation.

    • Market trends: What are your competitors doing? If you are offering something less interesting than your competitors, they might secure the best talent out there.

    • Keeping top talent incentivized: As the company grows and takes in new funding rounds, but you want to guard your run rate and optimize your cash, issuing new stock options is a great way to retain top talent.

    Keeping team morale high is key in down markets

    The robust growth we’ve seen in the private markets in the last ten years directly affected how and why the private capital secondary market grew. Since 2012, the secondary market has grown to more than five times its previous size, reaching a record $130B in 2021. During this time, online platforms that allow shareholders to buy and sell shares in private companies have surfaced and shown great success.

    We’ve been facing downturns and market instability and witnessing downward pressure on valuations in this market. Leaders steering a winning company must keep a perspective on the longer term, knowing that valuations are cyclical. It’s important to stick to fundamentals and assure shareholders that you see the path through the market’s vicissitudes.

    Related: 3 Simple Strategies to Boost Morale and Get the Best Results From Your Team

    Importantly, leaders need to tend to the people who built the company with them — which takes us to the third piece of advice. When employees have dedicated years to the cause, holding dreams of material wealth, delayed liquidity events threaten the very morale leaders need to keep the company strong. As a founder or leader, you should seriously consider the option for employees to sell shares in the secondary market without adding too much overhead to the cap table.

    Having employees work for extended periods of time with only paper wealth, while industries, competition and technology innovation never slow, can be risky. Giving employees the chance to convert their paper wealth into some tangible wealth could be the morale boost that saves the day.

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    Karim Nurani

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