20 years without my father

 

My dad died 20 years ago. For a few years, I’ve had this post on my todo list and the due date has arrived. I was both looking forward to it and dreading it a bit.

After 20 years, your memories of someone who is gone tend to condense. They’re summarized in your brain like a highlight reel. Those highlights, I suspect, represent the core of what the person meant to you. So, what are the highlights that are left in my brain about my dad?

First, humor. There were many times when my father would literally be laughing so hard that he was unable to talk or breathe. He loved the Pink Panther movies and we’d watch them over and over together. We’d be on family vacations playing some stupid board game and we’d need to wait 10-15 minutes until we all stopped laughing. He had a great sense of humor and these are my fondest memories of him. As  a specific example, the clip below would always set him off for 10 minutes or longer.

The second highlight of him in my brain is kindness. Whether it was rescuing and caring for 11 puppies found underneath his office building abandoned by their mother, or giving a yard work job to someone down on their luck that nobody else would give a chance, this epitomized my dad.

The third highlight was of him as an entrepreneur. He started his own accounting firm and merged it with another. And it was built to last. Even though he’s been gone twenty years, that firm is still going today and is called Cohen, Smith and Company which I view as quite an honor. I used to work in his company doing payroll data entry for his clients when I was a kid. I remember being amazed that you could build a company from the ground up, create jobs for people, and make it in your own image. In his own way, he was making the world a better place for his customers, his employees, and his family.

Fourth, he was a really good tennis player. He had an amazing slice backhand. He taught me how to play at a beautiful tennis club that he helped build with a bunch of other families (another entrepreneurial activity). I remember going to the site with him that was nothing more than a field of kudzu that he had to chop down along the path just to show us where the courts would be.  I basically grew up at that club.

I'm on the right.

I’m on the right.

Since he passed away, I’ve had a recurring dream. It’s happening less often now, but for a while there it was 4 or 5 times a year. In that dream, we’re usually on a vacation, just spending time with each other. It’s the current year, my family is there, my kids, my wife, my brother, my sister, and my mom. And my dad. He’s just there, and it’s normal. We all seem to understand that he died, but in the dream it’s common knowledge that even though that happened, he’s just back. He looks just like he did 20 years ago, although everyone else has aged. There’s nothing special about the scene, he’s just a part of it. He’s laughing and smiling, he’s a part of the normal conversation. Inside the dream, I know I’m dreaming. I’m hoping I don’t wake up for a while.

When I finally do wake up, I have a thankful feeling for being able to spend a few more minutes with him. And it reminds me to laugh, play tennis, be kind, spend time with family, dream, and change the world for the better. Just like he did.  I like that dream.

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My first post about Yoga Pants

This is my first post about yoga pants, but hopefully not my last!

Believe it or not, dress pant yoga pants is a huge tech story. Better yet, a Techstars story!

Betabrand is a online clothier that outfits Web communities, and, this month, they’re donating to the Techstars Foundation based on sales from their top product! That’s right, dress yoga pants!

Go buy a pair or three and you’ll not only look amazing (or help someone you love look amazing while being super comfy), you’ll be contributing to help women and other underrepresented groups in high tech entrepreneurship! We call it Yogaid. No brainer!

If that’s not enough motivation, you can see some of the super-awesome female founders of Techstars companies wearing the Betabrand gear on that same page.

Time to go check it out!

Here’s a click to tweet if you want to spread the word!

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Dropping an investor

I’ve seen a few cases recently where a startup decided to remove a particular investor from their regular “update” emails. The startups were doing this because they found out that the investor had invested in (or otherwise supported) another company that they viewed as competitive.

Fast forward a year or so, and the startup needs more money. The investor they haven’t been communicating with feels frustrated, having not heard from them in some time. It doesn’t feel very good to them to invest again because of this.

The fix is easy. If you’re worried that an investor has a conflict of interest, just talk to them about it. If you still don’t feel comfortable, try sending them a slightly “filtered” email update. But be transparent with them about why you’re doing that. In most cases, the investor will either understand or give you a good reason why your impression was wrong in the first place.

The problem arises when you stop communicating and don’t even explain why. This is never good.

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Pitch Your Insiders First

Imagine you’re about to go out for your next round of funding. Who do you pitch first?

It should be your insiders! Pitch first to those who have already invested. They are the most likely to give you direct and honest feedback to help you make your pitch better. They’re also more likely than anyone else to invest (again).

At Techstars, we’ve invested in more than 800 companies. We helped hundreds of them raise Series A rounds after their initial seed round. We’ve helped our accelerator program alumni raise billions of dollars. We want to help, and we are good at it. Yet it amazes that some companies still just hit the market without asking us or their other insiders to give them critical feedback on their pitch!

From our vantage point, it’s easy to see a correlation between those that pitch their insiders first and those who have the shorter and more successful follow on fundraising experiences. It’s not just about the feedback they get by pitching insiders first, it’s the awareness they generate. This often leads to introductions, re-investment from the insiders, and other goodness.

Don’t be silly. Pitch your insiders first!

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The 20 minute VC

I love the 20 minute VC podcast. It’s the perfect amount of time and Harry Stebbings does a great job attracting interesting guests and asking them the right questions. I was honored when asked to be on the show, here’s that episode.

Harry asks me questions like:

  • How did I make the transition from Founder to VC with Techstars and Fund I?
  • Fund I is one of the most successful funds in history; what was the structure with Fund I? Why did you choose a $5m fund size? How did you decide initial to follow on ratio?
  • Why were you so valuation sensitive with Fund I? Why were you so rigid on a consistent check size on Fund I?
  • Why did you decide to expand from being a solo GP fund? What are the challenges and complexities of fund scaling and how did you approach this?
  • What do you think about uncapped notes?
  • Why do you like big boring companies?
  • How did you meet Ryan Graves @ Uber and how did the Uber investment come about? (even more about that here)
  • Where does David still see inefficiencies in the current venture model?

I hope you enjoy it. I had fun doing the interview.

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The “lead investor” dance

The term “lead investor” is often code. Just like the word “quaint” is code in the real estate business for “small.”

Let me know when you have a lead investor.

Loosely translated, these words often actually mean “I’m not ready to commit.”

You see, many angel and seed investors view it as their job to establish a “free option” on investing in your company. They have no incentive to commit early so they tiptoe up to the line of commitment, making sure not to cross it. By telling you that they’re potentially “in” if you have a lead investor, they establish the free option to decide later. After all, they are so close to commitment, you’ll likely come back to them first once you do have a lead investor. It’s a way that they feel safer and don’t have to be an early committer.

Fight through this using direct communication. Break it down. You can ask them what it is about a lead investor that will cause them to commit. Perhaps they will say they want well defined terms. Perhaps they will say they want to ride on the due diligence and pricing of a professional. Perhaps they will say that they just need to see the terms.

Ask them to commit with the assumption that you’ll later have those things. Tell them you’d never hold them to their commitment if they didn’t like the terms once they’re established later. If they truly want to invest and they want to be helpful, this is what actually helps you. Commitment, even if it’s soft based on assumed conditions that you’ll ultimately satisfy.

And if you’re an investor, consider no longer using the “once you have a lead investor let me know” gambit. You can be much more helpful by simply defining the conditions under which you will commit to invest. And if you’re not ready, just say you’re not ready and be clear about what you need in order to make the decision. And most of all, if you’re a no, just say no! That will save everyone some time!

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