Key Startup Metrics For Each Funding Stage
What DO investors care about at each stage? Here is an overview of typical criteria for each stage of early investment!
Read More
What DO investors care about at each stage? Here is an overview of typical criteria for each stage of early investment!
Read MoreLast month, I was part of a great session at the Atlanta Tech Village. We discussed what metrics investors care about or are looking at every stage.
It’s a fun format (one of the few “Villager-Only” events - most are open to the public) called “Capital Conversations” with a handful of founders and several investors or industry experts.
I learned a bunch from fellow panelists Nelson Chu of Kinetic Ventures and Jaisa Gooden of SVB.
What DO investors care about at each stage?
Here’s the annoying answer:
It depends. 🙃
Depends on the firm, company stage, industry, investment thesis, and even where the firm is located.
Nevertheless, the O’Daily persists…in delivering bulleted lists!
Here is an overview of typical investor metrics or evaluation criteria for each stage of early investment!
Idea Stage usually means pre-revenue and pre-product.
Is the founder excellent? (e.g. great at selling, intelligent, resilient, creative, ambitious)
Is the market big enough to support multiple billion dollar companies?
Is there authentic demand? How are tests performing?
Is this a “hair-on-fire problem”? (a great phrase from Nelson Chu!)
$100,000 - $1,000,000
$100k from an angel or smaller fund
$1M if you’re an experienced, successful founder with existing investor relationships
Since Idea Stage is pre-revenue and pre-product, investors are primarily assessing the market, the idea, and the founder.
With those 3 factors, does this business have a chance to be big?
And do you think the founder can be smart, brave, and humble enough to pivot the company and grow as an entrepreneur?
It’s likely the current idea is not the final iteration so this is 90% taking a bet on the founder!
Seed Stage is usually some revenue, some customers, some product but still very early and risky with lots of unknowns.
Founder and market size are still #1 most important things! (See Idea Stage ⬆️)
Do you have paying customers that love you?
How much time and capital did it take to get here?
$500,000-$3,000,000
Seed Stage checks can be from firms, angels, or a mix
Every firm is different in what they look for at Seed Stage and how they explain it.
It’s usually too early to have “regular” metrics so investors are looking for indicators of traction and trajectory. It could be customer count, revenue, growth rate, customer love, or a combination of all of those!
This is where Atlanta Ventures spends a lot of time so I can share specifics on our thought process.
Our seed stage investment threshold is 10 passionate, paying, unaffiliated customers.
Paying money is a proxy for value. If they aren’t willing to pay, that is informative.
(I love free samples but rarely buy the product.)
The number “10” is somewhat relative (it could be 9, it could be 12) but it’s more than “a few.” You’re on to something! It’s resonating.
The part that’s hard to quantify is traction and trajectory. If you have 10 customers that love you but it took 5 years to bring them on, that’s very different than 10 customers in 3 months with a pipeline of 20 more.
Also, “10 customers” is assuming they’re paying $500-2000/mo or so, standard B2B monthly subscription fees. If you’re selling really large deals ($100k+), maybe 5 customers who love you is enough. Or if it’s a lower price point ($100/mo), maybe you need closer to 50 customers.
And of course, it’s fine to start with “friendlies” (oh, hi, mom, thanks for signing up!) but you need to be attracting “unaffiliated” customers through the problem you solve.
You’re a real company! You have a product, a process for getting customers, and so many users you don’t know every email by heart.
What is your ARR? (Usually $1-2M ARR is a starting point for Series A)
How quickly are you growing?
What is your net retention rate? (how often do customers leave vs buy more)
What is your burn multiple? (more important now than ever 🥴)
What is LTV to CAC ratio? (good is >3, excellent is >4)
Here’s an awesome post with more detail: The SaaS Metrics That Matter
Plus, founder quality and market size, of course!
$3,000,000 - $10,000,000
A Series A fund will likely lead the round, sometimes the whole thing, or with room for other investors.
Series A companies have metrics to compare against benchmarks.
Basically, does this business look like something that can scale well? Do the unit economics make sense? If you put $1 in, will you get many more $$ out?
The better the metrics = easier to raise money.
BUT - no startup is perfect and investors know this. You need most of your metrics to be great but a few hiccups are okay.
Proactively address areas of improvement. Explain your plan and showcase your leadership and problem solving chops.
Scale, scale, scale!
Same key metrics as Series A (ARR, growth, capital efficiency through burn multiple and LTV:CAC) but less flexibility in performance
Founder quality matters less now as an experienced CEO could be brought in
$10,000,000 - $30,000,000
Some Series A funds also do Series B but you also start to get into “Growth Stage Capital” firms which write the big dog checks (e.g. 10s of millions up to 100s of millions)
You’re definitely talking primarily to the “Coasts” (NYC, SF, Boston) for this stage.
Things are humming and you want to pour gas on the fire.
Companies also start to add new product lines, tackle new markets, or do small acquisitions (“tuck ins”) with this capital.
Usually a term for “need to raise money but not yet at Series A level traction or metrics.”
Mostly likely this raise is coming from existing investors who believe in the long term vision and know the founder needs more runaway to execute.
Have you heard this or thought this before?
On paper, the criteria are met but if you dig deeper, you find out that most of the revenue is:
for services, not software
from one client
from a different product
in paid trials
There are no loopholes in venture funding.
Every investor wants to see true, valid, authentic traction and trajectory — however they define that for their stage.
HOWEVER…there’s no perfect company, perfect metrics, or perfect deal.
Every business has stuff they’re working on, risk areas, or aspects that need to be up-leveled.
We’ve invested in successful companies that:
Delivered “software” through a spreadsheet
Had 50% of revenue from partner sales
Didn’t have a paying customer yet
Expected high churn for a year
These downsides were okay since so many other areas were promising.
So put your best foot forward. It should be a really good looking foot. But not perfect. Every foot is a little gnarly, just like startups!
And on that heel-arious analogy…I’ll see you next week!
What have you seen at each stage? Any key criteria or metrics I’m missing? Any investors with unusual milestones? What’s the most toe-tally outrageous investment analogy you’ve seen???
Steps, recipes, and strategies for less processed food or any type of gradual improvement. No drastic overhaul required!
Read MoreI’m into healthy habits — in case you missed it here, here, or here!
Sleep, exercise, and healthy food make it easier (possible?) to build companies because:
you feel good
your brain works
better emotional regulation (and optimism!)
Of course, like most things, sleeping, moving, and eating healthy food is simple but not easy.
Everyone knows they “should” but it’s overwhelming to add “one more thing” especially when you’re a busy founder!
It can also be overwhelming if you (like me!) are prone to “extreme implementation” when it comes to new ideas.
It looks something like this…
Read a book about carbs being bad → throw out all carbs
Listen to a podcast about how whole grain fiber helps longevity → re-buy carbs
Watch a documentary on farming → dig up backyard to grow your own food
Learn about a work “uniform” → buy 10 black turtlenecks, overnight shipping
Take 1 meditation class → launch meditation app to change the world
And those are just the personal examples! I didn’t even get into work improvements.
Bias-toward-action is great, of course. But total overhauls are not always the best way for a sustainable change or improvement.
It’s taken many years and many reminders from my husband to embrace the radical philosophy of GRADUAL IMPROVEMENT OVER TIME!!
My default mindset:
“If some is good, more is better.”
“Why go 25 mph when you could go 100 mph?????”
While it can work sometime, it can also backfire with burnout, poor adherence, or making you so miserable all the health benefits are negated!
Here is the story of one of my gradual improvement wins…eating less processed foods.
I share the process, the recipes, and how it can relate to anything you’re working on — no drastic overhaul required!
One day I opened our fridge (probably after bingeing a nutrition podcast), took a hard look, and realized…this is not the kind of food I want to put in my body.
Nothing terrible.
We weren’t eating Twinkies every night.
But as a health nerd, it seemed like an area where I could improve and get more aligned with my wellness values!
I considered several realistic options:
(A) Move to a homestead, grow and cook all of my own food over an open flame
(B) Spend at least 3 hours per day making every item from scratch.
(C) Get better a little over time.
Sigh. Fine. I’ll go with boring, reasonable (C).
And guess what??? IT WORKED!
Here are the 4 steps I took to (slowly) kick (most) processed foods and you can too!
Or pick your personal “area of improvement”, apply these same gradual improvement principles, and behold the slow (but meaningful!) transformation.
I picked one frequently-eaten processed food item to tackle at a time.
I found a recipe for that food with high ratings that seemed easy.
Easy is key.
I was looking for something I could do sustainably over time.
I don’t really like cooking. I want minimal steps, ingredients, and clean up.
Once I found a reasonable recipe, I made it!
Usually on a weekend, often while yelling at, I mean, working together with my kids.
The first 2-3 times, it would take a while to make the recipe.
All the checking back, making sure you get the amount and ingredient, knowing the technique or tools.
And 99% of the time, I’d forget a step or ingredient so it was mediocre to start.
Always plan to be the worst when you’re getting started!
BUT THEN…
I could pull out the ingredients without having to check the recipe 500x.
I learned how to consolidate steps or have fewer dishes to wash.
And one day I realized…
I CAN MAKE A HOMEMADE BALSAMIC VINAIGRETTE IN 3 MINUTES!!!!
Watch out, Martha Stewart.
Here’s where the gradual comes in.
Once I had one food item mastered, I added another one.
I repeated steps 1-3 until that new recipe was on autopilot too.
It would take about a month or two per recipe.
It felt slow but within a year, I could reliably and easily make 6-7 homemade versions of common foods!
While we’re not quite an off-the-grid-grow-everything-homestead, we do have many more homemade items in our fridge.
And, we don’t always have homemade everything. That’s why it works. Progress over perfection!
If you’ve thinking about a new healthy habit, fighting off afternoon office-snack brain fog, looking for less expensive food options (homemade is usually cheaper!), or like the idea of eating stuff you make yourself, here are some go-to recipes!
I promise they are easy because I am lazy efficient. Also, for goodness sake, wash your food processor in the dishwasher. I also love the instant pot and our mini blender.
Here’s the stuff we DON’T make from scratch. Either we tried and it didn’t take or I took one look at the recipe and ran away screaming.
Some might call that quitting or lacking in resilience. I call it, PRIORITIES and ROI!!!! 😁
Corn chips
Kombucha
Crackers
Pretzels
Bagels
Pita bread
Kimchi
Dehydrated fruit or meat
Also, I do have friends that make all of these homemade so it’s possible! Just not for me right now.
Looking for quick office snack swaps?
Prepackaged trail mix → Make your own
Granola bars or protein bars → Protein energy bites, homemade granola
Chips → Air popped popcorn in 3 minutes
Oatmeal packets → Overnight oats
Chex Mix or Ranch-flavored anything → Hummus or Greek yogurt + soy sauce (sounds weird but my kids LOVE it) with baby carrots or little peppers
Here’s also 5 ideas for quick and healthy lunches.
Making more homemade foods was my gradual improvement.
Maybe that resonates with you.
Maybe you’re like, ARE YOU OUT OF YOUR MIND? I DON’T EVEN HAVE TIME TO SHOWER.
In which case, processed foods is definitely not the right gradual improvement effort right now!
Focus on what makes sense for you and tackle it a little at a time.
Do you like the idea of gradual improvement or are you an all-or-nothing type? What’s your favorite quick and healthy recipe? Any food swaps you’ve made recently? What other office snack alternatives do you like?
I’d love to hear from you!
One of the most common questions for early startups — who should handle upgrades? Here are examples of what works, what doesn't, and how to figure out what's right for your company!
Read MoreOne of the most common questions for early startups — who should handle upgrades?
If I HAVE to pick, most of the time, I’d say:
Customer Success should handle upgrades.
But there’s a number of different considerations specific to YOUR business!
Here’s what I’ve seen from the front lines and what questions to be asking about your particular product, company, and team!
It’s worth spending time thinking it through because — in the words of the late Charlie Munger —
Show me the incentives, and I'll show you the outcome.
Here are different sales/customer success/commission configurations I’ve seen:
Sales gets commission on new logos; customer success handles upsells and renewals but no commission
Sales gets commission on new logos; customer success gets commission for renewals; sales and customer success split commission for upsells
Sales gets commission new logos; customer success gets commission on renewals and upsells
Sales gets commission on new revenue (including upsells); other teams get commission on their specific focus like renewals, upsells, product area
And 100 other variations.
What’s the right way?
Depends what you’re optimizing for!
Here’s a few examples:
Want the world’s greatest customer experience? → no commission
Want to aggressively expand existing accounts? → commission to “hunters” for upgrades
Want to focus on renewals? → give more commission for renewals than upsells
All that said, for most startups, here are 3 questions to consider…
MOST startups want their “hunters” aka sales people focused on getting new companies or “logos.”
Yes, you can get more revenue, more easily, at less cost from existing customers. It’s tempting to focus on the easier money.
BUT — in the eyes of investors and looking at long term growth trajectory, you can always upsell later (by improving your pricing strategy, for example).
A repeatable, cost-effective playbook for getting new customers is the #1 priority in the early days.
Yes, customers need to stay with you (renewals) and get more value over time (expansions). These are important measures of a healthy business.
But if your new business sales funnel is not working, renewals and expansions don’t matter!
Large companies focus more on account management. They have many products to sell and different parts of a company to sell into.
Don’t be tricked into copying a mature company sales structure!
What works for Salesforce today isn’t the optimal setup for your startup.
In the early days (for most companies), it’s a land grab for customers!
Who is the target customer for your company?
How large are the initial deals compared to expansion opportunities?
What about the complexity of the sale?
As an example, at Rigor, we sold to large companies including F500s.
We followed a scrappy, startup strategy though.
The sales person would “land” a small deal, usually within 1 team or 1 project. The manager could pay for the software monthly via credit card — quick sale, no red tape.
When they saw good results, we’d work to “expand” into a 6-figure deal, navigating big company complexities like legal, procurement, and multiple stakeholders.
Not a process for the faint of heart!
We wanted our best hunters working that process so sales reps received commission on the expansions.
For comparison, an expansion at Pardot would be $1000/yr or maybe $12,000/yr for a very large one. Very different business case for $100,000 vs $12,000 expansions!
Where does your company fit in terms of deal size, complexity, and expansion potential??
We have a company in our portfolio with a very sticky product and 99% retention rate.
I highly recommend they NOT focus on the renewals process. 😂😂😂 If it ain’t broke, don’t fix it!
This is not upgrades, per se, but an example of “normal rules do not apply.”
What is unusual about your customer, product, or business?
Should you adjust your account management strategy in some way?
Maybe you have multiple products, self-serve upgrades, main users who are not buyers, huge amount of referral sales, a robust partner network, one pricing package, or some other factor that means the “usual” suggestions don’t make sense for you.
That’s okay!!
You do you!
The whole point of building innovative companies is that something will be new and old paradigms evolve. Maybe this is where you break the mold!
People think org structures are created from business strategy.
FALSE.
Org structures, especially at early stage companies, are usually a result of who can handle what. 😂
(That said, I LOVE Molly Graham’s post on Designing Power Centers Strategically. I recommend startups follow this! I also know that sometimes you hire the best people you can find and figure it out as you go. 😁)
So - think about the people on your team currently and their skill set.
Brilliant sales person who doesn’t have patience for account management? Let them “hunt” and hand off!
A Customer Success Manager with a strong sales background? Maybe they “Land and Expand” your large customers.
A highly technical support person not inclined toward account management? Have your sales team do upgrades.
You need to be consistent across everyone in the same role but look at the cast of characters as you’re deciding your strategy.
This applies to managers or executives too. They will be best at (and default to) hiring and training what they know and their own strengths.
Remember: YOU CAN ITERATE AS YOU GO!
You’ll have new learnings, new team members, new products, new types of customers, and evolving business strategies.
When something isn’t working or it could be better, change it!
It’s not uncommon to have pricing and/or commission structure change frequently (2-4x/year?) at an early stage company. You want to be fair to employees and keep the right incentives for your sellers, of course! Explaining why and showing the business math behind the decision can help with a change.
Even at large companies, commission and org structures change annually.
You can also use SPIFFS, challenges, bonuses and other incentives to test new selling strategies!
Who handles upgrades at your company? How did you land on that? Other advice or iterations you’ve seen that work well?
Would it be helpful to see some example incentive or compensation plans? Reply or comment to let me know!
Francis Cordón is an O’Daily hero. He’s a Customer Success genius and a great human! Learn about his Journey Map of Value that changes how you help customers.
Read MoreFrancis Cordón is an O’Daily hero.
I worked with Francis at Rigor and learned SO much about strategic Customer Success from him.
He’s a genius (and a great human!). Customer Win Slides and aligning to your customer’s North Star both came directly from Francis and are simple, easy-to-implement strategies to 10x your customer experience.
When Francis offered to share more about the Journey Map of Value he outlined in this blog’s comments section, I jumped at it!
I’ve heard “Journey Map” used a few different ways in the business world, so I’m going to clarify what we mean for today’s post.
Imagine you’re visiting Madrid, Spain. You enlist a tour guide.
Your guide asks:
“What would you like to see?”
This question can bring immediate frustration:
“I don’t know! You’re the expert here. You tell me what I should see.”
Maybe you’ve done some research, maybe you have a few ideas, but you’re paying them to be the expert!
Now imagine, instead of a totally generic opener that puts the burden on you, your tour guide asks about your preferences and goals:
What are your goals for this day and trip?
What do you love? Favorite interests?
Any “must-see” items?
They’ll also look for clues:
kids (family friendly?)
mobility (more or less walking?)
your cool tattoo (into art?)
camera equipment (photography buff?)
“I love seafood” shirt (foodie?)
Then, they make customized recommendations based on you and your goals.
Makes sense, right?
Now substitute “Tour Guide” for “Customer Success.”
Are you guiding your customer? Or asking them to figure out what they want?
Are you giving them a list of every possible feature in your tool? Or curating it based on their business goals?
Do you give them a progression? (“First, we’ll see El Prado, then stop for lunch.”) Or give a full list on Day 1? (“Here are the 10 things we’ll do today.” Eek! Overwhelming!)
THIS is what we mean by Journey Map.
Clearly laying out a reasonable plan based on your customer’s goals.
(Note: there are also “journey maps” in the presales process or sometimes looking at the full customer experience from first exposure to the brand through multi-year renewal.)
Francis made an amazing point when we chatted:
Often times, the buyer is not the power user. The buying executive hands off the implementation to someone who reports to them but doesn’t have all the details, context, or vision but needs to make the project a success and get results.
Customer Success can help this power user be a hero!
But enough of literal Spanish tour guides!
Let’s get to it and hear directly from our Customer Success Spanish tour guide genius himself on the 3 common Customer Success pitfalls and the 4 components of a great Journey Map.
Heeeeeeeere’s Francis…👏👏👏
In the Journey of Customer Success, I like to focus on value and business outcomes, as well as on the personal aspect of it. This journey is marked by numerous challenges and opportunities, where the path to value realization is often obscured by common pitfalls. Drawing upon my experience as both a customer (when I was at the BNY Mellon dealing with so many vendors and investing in them, yet rarely getting the CS I really needed) and later building the CS practice at amazing organizations (including the awesome Quantum Metric where I currently have the honor of working), I've identified three prevalent pitfalls that frequently impede this journey. However, with a strategic approach and a well-defined roadmap, these obstacles can be overcome, paving the way for sustained success.
Many organizations fixate on projected ROI, neglecting the achieved outcomes. Admittedly, this can be challenging, especially with some solutions and platforms, but it’s an area where Customer Success as a partnership with the customer is absolutely essential. It ensures that value realization is documented, celebrated, and trended over time, in relation to the customer goals.
Becoming passive instead of proactive in managing the customer journey hinders success. It's tempting to wait for customers to voice concerns, but true Customer Success demands an active leadership role and the map for that is what we will discuss in pitfall #3. This means adopting a proactive approach and constantly aiding customers in achieving their goals. By focusing on individuals (and making the person in front of us a hero with the focus of bettering their lives) and connecting their needs with our solutions, we become true partners in their success journey.
Relying too heavily on anecdotal evidence of value rather than implementing a systematic approach can lead organizations astray. While one-off success stories can be inspiring, they often lack the substance needed to sustain long-term engagement. To mitigate this risk, we need a structured roadmap comprising value realization milestones tailored to the customer's specific use cases and goals. This roadmap serves as a guiding beacon throughout the customer lifecycle, enabling a progression from simple wins to more sophisticated endeavors. By painting a clear picture of the path ahead and the future value to be realized, we can avoid the pitfall of short-sightedness and ensure sustained success over time.
When done well, this Journey Map of Value Realization can help overcome all three pitfalls.
A mature Journey Map isn't fluff; it offers concrete steps and outcomes that are achievable with the existing SaaS platform. It’s a true map of ‘things we will do together’ throughout the lifecycle of the customer. It provides a clear roadmap for both the Customer Success Team and the customer, guiding them towards tangible results rather than abstract promises. It is not a project plan of tasks, it is a roadmap of value milestones to be achieved in partnership with the customer.
It caters to diverse industries and use cases, customizing its approach to suit specific needs and challenges. Whether it's a large financial institution or a medium-sized travel agency, a mature Journey Map can be tailored to fit the unique requirements of each industry and use cases. So one could say ‘Be Water’ :) as our dear Bruce Lee said!
Starting with simple, out-of-the-box solutions and gradually advancing to more complex configurations, it eliminates the false dichotomy between quick wins and in-depth value creation. This ensures that customers can derive value from the platform at every stage of their journey, without feeling overwhelmed or left behind. This is absolutely essential, do not sacrifice quick value for sophisticated wins too late, when the customer has run out of patience. But at the same time, do not settle for quick wins, it may not create differentiation enough for your platform and services and you can do so much more for your customers!
A mature Journey Map covers all aspects of the customer lifecycle, from onboarding to ongoing support and beyond. It not only focuses on achieving short-term goals but also paints a picture of future value, ensuring that customers remain engaged and invested in the long term, eliminating the syndrome of ‘diminished returns’ (a term I learned from the great Daniel Marsh!).
At Quantum Metric, we've embraced this approach through our Maturity Model, seamlessly integrated with our robust QM platform. Together, they form an unparalleled delivery system poised to revolutionize the landscape of Customer Success. In essence, the journey towards value realization is not a solitary trek but a collaborative odyssey, guided by a meticulously charted roadmap.
If you combine this approach with your genuine focus on the person in front of you, connecting the dots to the buyer’s goals, you’ll see the difference.
Yes, you’ll retain and expand a lot more, but above all, you’ll go to bed knowing you are doing a lot more to make many people’s lives much better!
“True living is living for others” after all, as Bruce Lee said!
Disclaimer: I am so honored to be guest writing this for the O’Daily and feel absolutely insecure about not being good at adding the right emojis at the right time, but nevertheless, the O’Daily is a source of inspiration to me, so this is such a treat!
(Thank you, Francis! It’s an honor to have you and thank you for letting me share so many of your ideas on this blog. Emojis here: 🙏 👏 🥳 🙌 🧠 🚀 - Kathryn)
Has anyone implemented some or parts of this Journey Map concept for their customers? Francis and I chatted through a few specific examples. Let me know if you’d like a follow up post to hear about those!
Creating your first legal documents doesn’t have to be expensive or hard. Here’s what I’ve seen real startups do to get off the ground with their legal documents!
Read MoreCreating your first legal documents doesn’t have to be expensive or hard.
When you are signing your first customer, you probably don’t have time or money for fancy legal docs.
Speed, simplicity, and survival are the goals.
If you have funding or lots of customers, yes, by all means, get a good, startup-friendly lawyer.
But on day 1? You’re just trying to see if customers will pay you to solve this problem!
Here’s what I’ve seen real startups do to get off the ground with their legal documents!
Disclaimer: I’m not a lawyer blah blah blah. If for some reason you take this as legal advice, that is a terrible idea by you and you are reading the wrong blog. I’m just a startup operator trying to help founders be scrappy!
Find a large company with a similar business model.
Use their Terms of Service and Privacy Policy as a blueprint.
Update with your company name, location, pricing, etc.
Skim to make sure everything sounds reasonable.
We used Salesforce’s Terms of Service as our blueprint at Pardot for hundreds of customers and several years — until we were actually acquired by Salesforce!
Surprise bonus: it was easy to switch customers over to the new Terms of Service 😉
Add your logo (or company name in a professional font) to a Google Doc
Add a table with a package and/or line items (e.g. what’s included)
Summarize pricing and contract term at the bottom
Reference your Terms of Service as a link
Save as PDF
BONUS: Send via DocuSign or other e-sign tool for easy signature.
We used proposals and contracts made in Google Docs for 5+ years at Pardot and Rigor.
Use a YCombinator SAFE. (Simple Agreement for Future Equity)
All YCombinator founders and many others use these. Like the name says, it’s a simple investment vehicle for your first investors — angels, family and friends, pre-seed VCs.
No need to reinvent the wheel. Focus on growing your business instead!
Okay, legit disclaimer here: I know B2B SaaS. Where trademarks, IP, and patents are not a factor in the early days.
Everything about your business, product, and messaging is changing constantly. You’re figuring things out and spending time with customers — not on legal filings!
Eventually, yes, when you’re “big” (however you define this), you’ll want to have some legal protections in place for your brand and technology.
I think it’s different in other areas — biotech, deep tech, higher ed scientific research, inventing rockets and shit. But I’ve never built a rocket or invented a cancer drug so I can’t speak to that.
In software, it’s likely that other people will be building in the space too. They will see what you’re building and if it’s good, they’ll copy it. Or they’ll already have the same idea because it’s a big market with a lot of demand to solve the problem.
You can’t worry if a competitor copies something. One feature or pricing package or marketing campaign is not your competitive advantage. It’s ALLLL the things you’re doing as a business that make your boat rise — how you sell, who you target, what you prioritize, culture and talent.
If you’re in the right market, there will be multiple winners! And once you have the initial market, it’s all about execution.
Clarify what % ownership everyone has up front in writing.
Include vesting — e.g. must be at the company at least 1 year and vests over 4 years.
You don’t need to get a lawyer involved but be clear and no 50/50 splits!
Every business needs a clear “tie-breaker” and CEO (aka 51/49 split).
Don’t kick the can on this! If you can’t talk about it with your co-founder, you’re not ready to start a business together. (True for marriage and finances too! I digress…)
If you wait, the discussion is 10x harder and previous conversations are more likely to be misremembered or misinterpreted.
Find a template online.
Or not. You can also have employees sign agreements later. I’ve signed updated employee paperwork well after a start date.
If you have 2 contractors or 2 friends working for free, wait until you have some traction before spending time on this!
Stock option agreements included here too. (Great primer from Fred Wilson)
These agreements include things that are important but don’t come up that often: the code you write belongs to the company, you can’t leave and start a competitor, no selling state secrets or we have to kill you, etc.
If you have 100s of employees, you definitely want these!
If you are still small and mighty, you’re better off spending time getting customers.
Go Cooley is a legal template tool that was recommended to me by a lawyer friend (BUT DOES NOT CONSTITUTE LEGAL ADVICE! ← I’m supposed to add that disclaimer 😁).
Other founders are also a good source of templates. Most folks are happy to share their policies or legal docs as a baseline.
If you’re part of an accelerator or other startup group, they’ll probably have some boilerplate docs.
AI is changing things quickly and legal AI is a great use case. For now, it also hallucinates which is why I’d still check anything against a similar, real world document produced by a corporate lawyer whenever you can!
Any other favorite tools? I’d love to hear!
Here’s your friendly reminder that legal issues people (especially lawyers 😉) warn you about…fall into the “good problems to have” bucket!
If someone copies everything you do, GREAT! That means you’re onto something and totally crushing it.
A fight about money? That means you’ve created something of value! People don’t engage lawyers over something worth zero dollars.
On the flip side, if a customer is unhappy and wants to leave, an airtight contract forcing them to stay is not the answer.
Most importantly, people who are busy winning don’t have time to launch legal battles. Even if they can afford it, it’s not worth the energy or distraction!
I want to be very, very clear.
If your company is growing and doing well, you should have a lawyer. I’ve worked with many awesome lawyers who have been tremendously helpful.
All the things I said to hack together? Once you get traction, you want a lawyer to review those hacky docs!
Doing enterprise contracts regularly? You’ll definitely need a lawyer on retainer.
If you have investors, they will probably want you to have your legal ducks (mostly) in a row. The larger the fundraise, the tighter legal needs to be.
But when you’re getting started?? Don’t make “I need a lawyer before I can XYZ…” a hurdle!
The best way to get started is to get started. Find that authentic demand!
Any favorite resources, templates, or legal AI resources to share? What’s your best money or time saving legal tip??
Great sales people make great founders. And great sales people make terrible customer success managers. Okay, okay! I’m kidding. For myself, the opposite was true. Mediocre at sales, excellent at customer success 😁 There are many similarities between great sales and great customer success:
Read MoreGreat sales people make great founders.
And great sales people make terrible customer success managers.
Okay, okay! I’m kidding.
For myself, the opposite was true. Mediocre at sales, excellent at customer success 😁
There are many similarities between great sales and great customer success:
Cares about customers, relationship-oriented
Asks great questions, listens carefully
Understands motivation, customizes approach
Hard-working, responsive, well-prepared, generous
That said, I’ve talked to several founders who are great at sales who have struggled with post-sale customer interactions and feedback.
Why?
Founders get hammered left and right by naysayers.
You can’t sell it.
It won’t work.
We don’t want it.
No. No. No.
In an investor meeting, you have to be ready to knock down every objection.
In a sales meeting — especially in the early days — you are knocking down objections too. Objections like your lack of funding, product maturity, app security, and well-funded competition.
Then you go home and have to explain to your mom why starting a company is better than law school.
You don’t mind. You like selling, being a rebel, and proving people wrong.
Then you have a customer call.
They tell you what’s not working.
It’s okay though.
You are ready to handle their objections, prove them wrong, explain why your idea is the best!
Except that’s not the right thing anymore.
When a customer says something sucks, you have to say, “Tell me more.”
A customer says your product is wrong, you say, “Help me understand.”
A customer is mad, you say, “I’m sorry. We messed up.”
The quickest way to shut down customer feedback is to argue, defend, or challenge.
You want them to tell you the bad stuff.
But it’s a totally different mindset than every other area of the business!
So when you get on a customer call, remember:
They’re on your side
Humility over bravado
You’ll get more if you agree
Feedback is a gift (love this from CBQ!)
Open questions not challenging ones
This isn’t one of those jerk-faced investors! 😉
Yes, if a customer is at-risk of churning, being unreasonable, or likes debating, then by all means activate the objection-busting!
But if it’s a normal customer interaction where you want to maximize learning, engagement, and feedback, then put your very successful sales mindset away and wear that cuddly, feel-good customer success hat!
What tips do you have for switching between sales and customer success? Do you notice a difference in strategies with each? What mindset comes more naturally to you?
We recently talked about the importance of clarifying decision-making and delegation at a startup — especially if someone is going to be out on leave. Which reminded me… Effective delegation and clarity around decision making is IMPORTANT ALL THE TIME!!
Read MoreWe recently talked about the importance of clarifying decision-making and delegation at a startup — especially if someone is going to be out on leave.
Which reminded me…
Effective delegation and clarity around decision making is IMPORTANT ALL THE TIME!!
When Pardot was acquired by Exact Target (prior to Exact Target being acquired by Salesforce 9 months later - ha!), we went through an amazing manager training.
Exact Target was a high growth tech company with 2000+ employees so talent development was key.
They had an amazing in-house training curriculum based on Fierce, Inc.
I still have my 8 card cheat sheet from the training 10+ years ago!!
I ruthlessly purge clutter so this speaks volumes to the quality of this tiny notebook.
I especially loved their decision-making framework.
Don’t have time to fly to Indy and spend 3 days in a conference room to do the training in-person? I got you.
Here’s your ultimate guide to startup delegation!
Make the decision.
Act on it.
Do not report the action you took.
“Just do it. No need to tell me.”
Make the decision.
Act on it.
Report the action you took daily, weekly, or monthly.
“Do it but keep me in the loop.”
Make the decision.
Report your decision before you take action.
“Run it by me before you do it.”
These decisions are made with input from many people.
Or, these decisions I’m not willing to delegate.
“I need to be the one handling this.”
Explain the framework to everyone on the team.
Then it becomes a shared company language for decision making:
Is this a leaf or a branch?
I know that’s a branch but want to try it as a trunk?
Which of these tasks are leaves, branches, trunks, roots?
Use this framework to self-assess.
What instructions do you give your team?
Are you clear where they have autonomy? Do you honor that autonomy or second guess them?
When and where do you need to be looped in?
Are you too in the weeds or not close enough to key decisions?
Wondering what you should delegate? Here are the questions we asked in our Fierce training. We matched up with a peer to “real play” and having someone ask and discuss was so helpful!
What activity or responsibility is no longer the best use of my time?
Make a list. Get someone to ask you this question and discuss it. Ask your team or a loved one. They may see things you don’t! Do a company-wide brainstorming sesh where everyone asks this question of themselves.
To whom would I like to give this responsibility?
Could be a person. But could also be a technology or maybe it can be dropped all together!
At what level?
Time for our decision tree! Is this a leaf, branch, trunk?
Um? Anyone?
Even if you’re a team of 1, you can hire a virtual assistant, enlist a neighborhood kid to handwrite thank you cards, or do a task/skill swap with another professional.
Let your junior teammate take more on.
Ask that high paid consultant to step it up.
You’ll be pleasantly surprised that people want to help and are often excited for a new challenge.
Oh, hello, excuses! Nice to see you.
Get ready for me to punch you in the face.
FACE PUNCH 👊 → What feels boring or menial to you, may be interesting and educational to someone else. They may be excited to improve on the process or it may align with their skills or personality. Don’t assume you know what others want.
FACE PUNCH 👊 → You make mistakes too. You just forgive yourself a lot quicker than you forgive others for the same mistakes. (Speaking from experience here…)
It’s reasonable to expect a learning curve. THAT’S WHY THERE IS A TRUNK DECISION. Start by having the delegatee (d-alligator? 🐊) run it by you, when they get pretty good, turn that decision into a branch. Don’t go from root to leaf!
FACE PUNCH 👊 → I see executives who are bogged down doing admin tasks to “prove” they still can or to take the burden off their team.
While well intentioned, there is a significant downside.
They are burned out, not doing the high value tasks only a CEO can do, depriving their team of growth opportunities, or all of the above!
Yes, there’s servant leadership blah blah blah. If your CEO is doing dumb shit instead of high value stuff, as an employee, you will be annoyed. Especially if the company is not moving forward.
This is DIFFERENT than a leader who is intentionally carving out time to walk the factory floor, meet with employees, or handle a customer support ticket to stay close to the front lines. That’s cool. O’Daily approved.
But shopping for the team snacks when an intern could or nitpicking grammar in a marketing blog? Denied!
FACE PUNCH 👊 → How many hours would it free up? What could you do with those hours? If you can use it to bring in more revenue, there’s clear ROI on spending some money to delegate.
There are also very low cost options — offshore resources, college students, bartering, and more. You’ll be surprised at how creative you can get once you open the delegation door!
FACE PUNCH 👊 → First, there’s probably 10 other things you don’t like doing, so start by delegating those.
Then, take a hard look at yourself to ask, why won’t I give my Legos away?
Am I afraid of sucking?
Do I want to scale with my company?
What got you here won’t get you there. Delegating is part of getting to the next level!
Or, if you genuinely love the work that you know you should delegate, find someone for that other role you don’t want to do.
Not every founder wants to be CEO and that’s okay!
Real talk.
Sometimes you really don’t have someone to delegate to.
Team is small, money is tight.
MAYBE a $10/hr offshore virtual assistant can be helpful. MAYBE you can find a free intern who just wants the experience.
But maybe not.
Here’s another delegation question to ask:
What can I automate?
Helloooooo, ChatGPT. Have you heard of it? 😂
It was amazing to work with Mark Isham at Rigor. He was a founder who could code anything. He built so many amazing internal tools because if he had to do a task manually more than once, he turned it into code! Not all of us can do that BUT we can do more of it than we think.
What can I subtract or pause?
What are you doing that can be paused or is no longer a priority?
Subtracting could mean — send shorter emails, ignore messages on LinkedIn, or deleting Tiktok.
Or it could mean letting go of the not-good-fit-customer, cutting the buggy feature that no one uses, or doing fewer general marketing events to focus on the highly targeted ones.
Personally, every time I audit my time, priorities, and calendar, I find something that’s outdated, no longer important, or could be - GASP - delegated. 😉
It’s a great feeling to find extra time in the schedule, and to remember how awesome, capable, and helpful teammates, tools, and services are!
What are you going to start delegating after reading this post?? What delegation frameworks or tools have you used at your company? Any other tips?
To take on a new challenge, you have to accept the single most important truth: at first, you will suck.
Read MoreIt’s the most important part of taking on a new challenge.
A challenge like:
Building a company
Running a marathon
Writing a newsletter
No, it’s not all that lame stuff like set a goal, spend 30 minutes per day, find a mentor, blah blah blah.
Okay, fine. That’s excellent, research-based advice.
But before you can even get to the point where that matters, you have to accept one truth that will unlock all future growth and achievement:
You are going to suck.
At first.
When you’re a high achiever, how do you tap into the growth mindset and do new things (especially publicly) where you may not be good?
Plan to suck!
I like to know that I am going to be really bad at something at first.
I expect it.
Which makes it easier to get started!
And once you get started, you start learning. And getting better.
Of course, getting better, often looks like doing badly. But that’s okay! You planned for that.
You know the first few attempts will be WAY harder and you’ll do WAY worse because you planned for that!
It doesn’t derail you. It lets you know the process is working and it will get easier.
The more you plan to suck, the sooner you can get started, the sooner the suck will be over!
One day, in the not so distant future, you realize:
Wow! I’m no longer terrible!
What used to take me 10 days of agony, I can do in 30 minutes.
My armpits aren’t (that) sweaty.
I’m getting pretty good feedback.
I could layer on another goal!
The idea that you will suck to start (and you should plan around that) is exactly why we recommend:
Plan for your startup job to feel confusing or really hard at first
Test first, build (much) later!
Get started - do the thing!
So much of startups is starting (duh! it’s in the name!) and learning.
Taking action, figuring it out as you go, discarding incorrect assumptions, and being faster than your competitors.
If you’re willing to be embarrassingly bad to start, you will learn more and faster!
You may ask: If you know you’re going to suck, why don’t you just prepare better?
First of all, I do!!!! I’m an over-preparer.
But here’s why that doesn’t work:
You don’t know what you’re going to suck at!!!!!!!!
Or to use my least favorite phrase in business (that you will hear 1000 times if your company is being acquired):
You don’t know what you don’t know🧑💼🤓🧑💼🤓
Or to put it a more positive, less annoying way:
It takes a while to find your strengths and what works for you.
Preparation can help. I recommend preparing (especially for Q&A!). But everyone has a plan until they get punched in the face. Or, um, hear real customer feedback, get on stage, or see the faces of investors when they’re sharing their pitch.
So prepare…then get it into the real world asap so the improvement can begin!
In my first fireside chat, I was afraid I’d forget the questions.
So I memorized the questions and asked them exactly. Verbatim. No lead in.
As you can imagine, it was rather stiff and formal. 🤖
The next fireside chat I hosted, I was more conversational and fun. It was 10x better (and I didn’t forget any questions)!
I took 3 months to start this newsletter.
Researching the best platform, trying to discover my voice, figuring out my brand.
(Sound familiar to any founders who would rather build than sell??? 😁😉)
Once I finally got started, my first posts took FOREVER to write. Like 8 hours for 500 words.
And they weren’t even good!
Over time, I learned:
the right amount of jokes (A LOT)
my writing works best with numbers, bullets, lists, line breaks, for easy skimming
if a post gets too long — make it 2 posts
how to add a photo to the thumbnail
what a good title looks like (aka get help from people better than me!)
Here are some other things where I’ve been the worst before getting better:
First “inspirational” speech (spoiler alert: it was not inspiring…)
First Instagram video
First panel where I explained (poorly) what we did at Atlanta Ventures
First meetings with founders
The first meeting, presentation, call, post, whatever — will take forever to prepare for! And it will be the worst! The second one will take less time but be better! Expect to invest the most time up front and for each effort to get incrementally better.
I like to plan for 3 months or 3 attempts (depending on the type and frequency of the skill/project) of terribleness before I start to “figure something out.”
If I get to one of these milestones and I am still terrible, I do some soul searching.
Do I care enough to keep going? Have I given it a fair effort? Is there a belief or life constraint holding me back?
Adam Blitzer, the COO and co-founder of Pardot, beloved by Pardashians everywhere, used to say:
We’re going to make a lot of mistakes and that’s okay. We’re just going to keep learning.
It was the kindest, most empowering thing to say to young, high performers who had no idea what they were doing but cared a lot and worked hard!
It also created a bias towards action which increased the rate of learning exponentially.
Adam did a great job of talking about his learnings and mistakes publicly to let people know it really was okay:
I had us switch to a new tool and it didn’t work at all. I should have pulled the plug sooner.
My first sales meeting was terrible. I told them not to buy our product!
If you want to support your team and grow quickly, encourage people to try new things and be okay with the mistakes!
What challenge are you tackling? How do you get started on something new? What advice do you have on doing new things or helping your team do new things?
“Show founders the VC math.” Learn 6 steps to valuations in 2024!
Read MoreI recently chatted Lisa Calhoun of Valor Ventures and asked her how their firm was handling the significant reset of company valuations between 2021 and now.
She had a great response that I think is helpful to everyone in Startupland, especially founders who are raising right now.
She said, “Show founders the VC math.”
Here’s what she meant — in 2 formats — since some founders only have 2 minutes and others love the deets!
TL;DR
Investors are looking for a 10x return based on current exits in your market.
Work backwards to figure out a current valuation with those market comps.
If that was gibberish to you, no problem! Here is the full explanation with math, valuation charts, action item, and OF COURSE, the O’Daily calling card, a numbered list!
It’s venture capital industry standard to invest in companies that have the potential to 10x your initial investment.
If it’s an early stage — like seed or pre-seed — they’re likely looking for 10-20x since it’s higher risk.
Why?
Because VCs have bosses!
Their bosses are entities like hospitals, endowments, and pension funds, who are counting on the money invested to increase in value for their constituents.
So how do you get a 10x return?
You invest $1M into a startup in the hopes that in 5-10 years, your investment is worth $10M.
Why 10x?
Many companies will end up at 1x or 0x.
A few companies will be 3-5x.
If things go well, 1 or 2 companies will be big and “return the whole fund.”
So you need to have a path to 10x in every investment to cover the ones that inevitably won’t work out.
If you start out with an upper limit of only 5x, you’re screwed!
If you’re pre-Series A, it’s even riskier so you need to shoot for 20x potential returns.
ICYMI — same math applies for founders which is why I talk about picking a big market here, here, here, here, and here!!!
What companies in your industry recently had exits?
Usually this means being acquired, sometimes it’s going public.
What were the economics of those exits?
In other words, how much was the company worth compared to its revenue (or EBITDA for later stages)? 5x revenue? 10x revenue? 3x revenue?
Here is a chart of 2023 SaaS trends for reference and another great chart that showcases the range and factors of valuations across industries. Business model, sector, growth rate, recurring vs non-recurring revenue, future potential, and a myriad of other things can impact valuations.
Helpful to note: public market valuations directly impact early stage private companies. They set the benchmark and everyone starts doing math based on those “end game” numbers.
So what does this mean for your company right now?
Here’s a simple example:
Based on the 2023 SaaS trends data, if you have a B2B SaaS company in adtech, when (not “if”!) you get to $10M ARR, you’ll get a 7x multiple or $70M valuation.
What is a reasonable best-case-scenario for your company?
What is the right valuation now that enables an investor to get a 10x return?
This means that for your hypothetical $70M exit, an investor would need to invest today at a $7M valuation.
I’ve built out an elaborate formula for this:
$7M * 10x = $70M
You’re welcome. 🧠🥳💰
Of course, this assumes that you can get to $10M ARR without more investment.
If you take more investment, there’s more dilution, so the valuation would need to be even lower today to get a 10x return later.
More math:
$7M * 10x = $70M You raise another round and everyone is diluted 20%…
The company has to do 20% better in the exit -OR- starting valuation is 20% less
$7M * 80% (aka 20% less) = $5.6M
So $5.6M for your current valuation with one round of dilution to get 10x return
Let’s add a second round of dilution just in case things don’t go exactly as planned:
$5.6M * 80% = $4.5M
Not surprisingly, if you’re around $1M in revenue, this $4.5M valuation is pretty close to the 4.8x multiple from this chart:
It’s obviously not an exact science but this is back-of-the-napkin math to show you how investors are thinking about valuations right now.
Want to do your own math?
Here’s a simple dilution calculator from Atlanta Ventures to map out more investment rounds, include an employee option pool, or test different scenarios!
If you’re relatively new to the world of VC, here’s a reminder about the most important unspoken math:
VCs assume that you’re offering 15-25% of your company
Whatever your fundraise ask is ~20% of your company’s value
Put another way: Fundraise $$ Ask * 5 = Your Implied Valuation
Yes, there are exceptions and negotiations but this is a helpful ballpark.
When you ask for a high dollar, it implies a high valuation, not high dilution (e.g. willingness to offer 50% of your company).
The reckoning!
Take the VC math and compare it to your current fundraise and/or last round valuation.
Close? Far? Way far?
The market has changed drastically so 99% of companies that raised in 2021 or 2020 will not love the math they see.
This isn’t a reflection of you or your company!
You may have executed perfectly, crushed your forecast, got amazing customer feedback, built the best product, and still not see a number you like.
Everyone in Startupland understands the shift.
Even top founders (and investors!) can’t control things like timing, luck, and the stock market.
I share all this to provide info and awareness.
This is the math investors are doing.
You chose what action, if any, to take.
Oh, and by the way — there are still companies raising money on better-than-industry valuations.
I know 2 companies in Atlanta this year that raised money on a 2-3x valuation of their previous round.
So there may be no action to take!
Maybe you double down on your current strategy. Maybe you tweak expectations. Maybe this is a wakeup call for a big change.
There are many paths, all with tradeoffs. Such is the nature of startups!
As you think it through, here are some questions that may help.
If I raise a round at a “VC math” valuation, what does that look like for me and the team? What will the cap table look like afterward?
What kind of exit makes it “worth it” at a new valuation? How many years or dollars until we get there?
Can I make a compelling case for better-than-industry potential and returns?
How much money do we need to get to the next milestone (raise, breakeven point, traction)? Can we get there with less money? What does that look like?
Are there any investors that passed because of valuation? Do different economics change the conversation?
What have my current investors advised? (While I think it’s commendable to protect the interests of current investors, they should understand the market. They can put in money themselves if they are pushing for a certain valuation.)
What other tips do you have around fundraising or valuation with the market shifts?
Any terms or concepts in this post that I should explain further? There is a lot of industry jargon!
Babies are like startups. They never go as planned, more expensive than you thought, and you can't not love them!!!! Here are my 4 recommendations (PLUS **TWO** TEMPLATES) to prep for parental leave at a startup!
Read MoreYay babies!!!!!!
Very similar to startups.
They never go exactly as planned, more expensive than you thought, but you can’t not love them!!!!
Last week, we talked about free and low cost ways that startups can support expecting parents (even on a tight budget)!
This week is for the expecting parents!
Having done 2 parental leaves, at 2 different startups, both times as the first parent and/or mom to go out on leave, I’ve learned a few tricks along the way.
✅ YES: high level structure, planning, communication
❌ NO: Trying to cover every detail or scenario ahead of time
As we know, things at startups change quickly. By the time you update documentation, it’s out of date.
So, while it’s important to have some documentation, it’s a fool’s errand (aka exhausting and unnecessary) to overplan or cover every contingency.
Here are my 4 recommendations (PLUS **TWO** TEMPLATES) to prep for parental leave!
The most high tech recommendation on this list.
Get yerself a password tool so you can easily share logins, store credit card info, and whatever else you don’t even realize you use regularly.
Benefits:
Security, duh. Spreadsheets of passwords are a normal but terrible startup practice. Password managers let you share passwords securely. Not that Slack or a Google Doc isn’t a good option. 🙃🥴😂
Control access to the sharing of passwords or other sensitive info — including keeping track of who has access to what (aka that intern from 3 years ago who can still login to your AWS account…).
Database — it’s easy to miss or forget a tool if you make a list. A password manager gives you a comprehensive list on-demand, no remembering necessary.
Always up-to-date. No need to update a separate doc or reshare a new pw with someone. If you update a password, it pushes updates automagically to anyone else sharing that login.
I like LastPass (I’ve used it for a long time and it does what I need) but there are other good ones too.
Less is more when it comes to product design and parental leave documents.
Here is my favorite format for a parental leave planning document:
Item: functional area, project or task
Who To Ask: person who is the Directly Responsible Individual (DRI) while you’re out (more on DRIs + why they can 10x your company’s execution)
Notes: other details, dates, tools, etc
Links/Docs: training or reference resources
It’s a single-source-of-truth spreadsheet to be circulated across the company, pinned in a Slack channel, reviewed before you leave, and generally get aligned on!
In case that’s not simple and clear enough…I even made you a TEMPLATE:
Obviously some important pre-work goes into this:
Identify what you’re responsible for (more than you realize because #startups 😂)
Figure out who can handle it while you’re out (let someone spread their wings!)
Run it by your boss, the people handling items, their boss, etc. Get approval from all stakeholders.
Highlight any major gaps in training, coverage, or resources and come up with a plan!
It’s usually 5-20 lines (aka “Items” that need coverage). More than that and you’re getting too granular.
For example, if you normally plan the company offsite, there may be 10 people who pitch in to help with different items but only 1 “who to ask/DRI” person on the doc.
Parental leave is not one-size-fits-all.
Hopefully someone asks you what you want but either way, spend some time thinking about how much and in what ways you want to stay up-to-speed on company happenings.
Your initial thought may be, “Not at all,” which is valid and possible in some roles.
But what if your manager leaves? What if the company has a major product pivot? What if they hire someone for your team? What if you’re the CEO or C-suite?
There may be certain decisions or items that come up so talking about when and how to reach out ahead of time can be helpful.
Your communication plan is a great item to add as Tab 2 on your ^^ Point-of-Contact Spreadsheet!
(Yes, it’s already included in the Parental Leave Planning Template!)
For example, here’s my plan from when I was a startup COO and took 12 weeks:
Company weekly update email sent to my personal email
Work email stayed active with a parental leave OOO but I turned off notifications
Signed out of Slack
CEO or team members would text me if something was urgent or important
I think I might have gotten 1 text about a password/login issue and the CEO called me about hiring a Chief Customer Officer (who I had already met and was awesome). Perfect!
Everyone was very respectful and never took advantage.
If you want to stay more involved, be clear about decision making and communication expectations. (Tbh - these are always good to be clear on, even without a baby!)
Clarify communication and decision questions like:
What decisions can the team make, what do you need to decide?
How quickly will you respond?
What channels will you respond on?
If no response, should the team wait or do what they think is best?
NOTE: You have to follow your own protocol! If you say, I’m not checking email but then you reply to email, that’s confusing. Then people will email you and expect you to reply. And you’ll be like, why is no one respecting the plan?? And then you have to look in the mirror and say, oops, and do a reset. 😁
Remember that awesome spreadsheet of who does what while you’re out?
Start it several weeks before you plan to be out!
Dress rehearsal! Starting early lets everyone practice, ask questions, figure out where the gaps or sticking points are before you’re unavailable.
Unknown timeline. Babies arrive when they want to. Sometimes early, sometimes late. So let’s just go ahead and plan for early so we’re pleasantly surprised if you’re around for longer.
Calm before the storm. Expecting a baby whether you’re growing one, someone close to you is, or you’re adopting is busy and exhausting work. What better way to give yourself a teeny tiny respite by handing things off a little bit ahead? It’s smart for the business, for your own health and wellbeing, and for the baby! Being stressed out of your mind is not the ideal way to welcome a child into the world — though it’s happened many a time and turns out fine! 😉
Jacey Cadet is our incredible VP of Marketing and Community at Atlanta Ventures — who just had a baby!!!!!!!!
LOOK AT THIS CUTENESS 😍😍😍😍😍😍😍😍
Jacey was already an organization and process power house so this wasn’t “new” for leave but rather her normal MO.
Every event, podcast, newsletter, social post, or any other thing we’ve done 1 or more times, has a Standard Operating Procedure (SOP) doc.
She kindly shared her Standard Operating Procedure Template knowing I was writing on this topic!!
Steps, tools, timeline, copy, images, everything you could possibly want all in one doc or folder.
This is great for known and recurring activities especially with multiple stakeholders.
As I mentioned before, some startup tasks or projects are too “one-off”, evolving, or even unknown, to document. Then your best option is to train at least 1 person, ideally 2, on the basics and let them run with it from there!
Yes, you want to do a reasonable job of preparing others and covering your responsibilities.
But it’s a startup, people!!!!
There’s no way to cover every possible scenario when things change so quickly and everything is an edge case.
And if your company is doing it right, there are good people around you who will do a great job while you’re out! (If there aren’t, that’s another issue, unrelated to parental leave. 🥴)
So do your prep work and then let go.
With babies and startups, you can only control so much.
Let the fun and joy of the adventure unfold!
What’s your best advice, resource or tool for expecting parents to prepare for leave? What worked well for you? What was the most helpful advice you received?
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