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Help the Founders That are Coachable

 

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Helping is hard.

Through out the process of a startup there are so many times that someone can be helpful to you. You can get introduced to them, meet them at an event or just cold email them and hopefully create an opportunity.

Unfortunately there is only so much time in a day and only so many things you can do. This is why you need to pick and choose carefully who you spend your time with depending on who you think you can actually help.

One of the qualities that we look for in founders is what we call “coachability.” This is what we feel is the ability to be taught by someone with expertise and trying to assimilate it into their plan. It doesn’t mean that you have to listen to us but just that you think about what we tell you and then you make decisions after all of the input that you’ve received. Sounds easy but trust me that not all entrepreneurs have this quality trait.

This can come in during different phases of the startups life cycle depending on your expertise and proactiveness:

Fundraising isn’t easy

This accounts for most of the work that we do as we need deal-flow to make potential investments. After meetings with hundreds or thousands of founders you start to see trends, traits, mannerisms and expressions that lead to your ultimate decision, beyond just the business and terms. At some point you start to feel like a physiologist or sometimes even a marriage counselor:

  • Do you feel like you can trust the founders?
  • How open are the founder to feedback and thoughts?
  • Are they fighting you on certain topics or taking it in and responding accordingly?
  • Are they honest or does it seem like they are holding something back?
  • Do they admit when they don’t know something and not giving a general statement back?
  • Do they really understand the terms of their note or priced round?
  • Do you really think they can do what they say they can?

We understand and know that fundraising can be hard sometimes and that you want to focus on your company but we’ve seen founders really grow during the process. Hopefully you will find some great investors or mentors along the way that even if they don’t invest in your company, will hopefully find it worthwhile to invest their time in you. I still keep in touch with many founders that we didn’t invest in as they keep me updated, I give them feedback, make introductions and they even send me investments as well.

Running a company

Fundraising was the easy part — now you actually need to execute your plan and make it happen. At this point fundraising is behind you (though once you raise, you’re kind of always raising) and from an investor standpoint most of us will look forward to our monthly/quarterly updates with events and other correspondences in between when needed. Hopefully you invested in the startups because you can add value and expertise.

  • You know executives and influencers in the space you can introduce the team to
  • Branding and marketing strategy to better target their messaging
  • Hiring is one of the hardest things and most people aren’t ready to scale early
  • Getting the founders through the hard times — keeping them focused on big AND small things

Most investors can be considered advisors who can help you from time-to-time but the best are mentors. They know everything about you, care for you and want the best outcome because they truly want to help you

Selling the company

Congrats if you’ve made it this far — you’re probably over five years into your business, hopefully a few million in revenue and break-even, or raised millions more. At some point though you will need to create a liquidity (acquisition or IPO) event for your investors, employees and even yourself. Most companies are sold though, not bought, so you need to make this happen.

  • Hopefully you have regular board meetings or talks with your advisors who can help you align and get you ready.
  • We have found with many founders, that while they want to sell, they generally don’t set themselves up properly to do so. This can be structure wise, cash flow and allocations or just branding to get on the radar of a potential acquirer. Look like a piece of cheese!
  • You need to start the conversations with your potential acquirers and hopefully create a bidding war.
  • You always want to be in the position of power when negotiating so that you can get the best outcome for yourself, employees and investors.

Remember the days when you had just an idea and were bursting at the seams with energy and passion? Well business is a journey and hopefully you made the best of it, learned along the way, make great friends and connections.


Reprinted by permission.

Image credit: CC by KirillSerebryakov

About the author: Trace Cohen

Managing Director of New York Venture Partners making angel investments in the best startups/founders. NYC, Whiskey, Bacon, ‘Cuse Alum.

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