Tremendous

An angel investor's take on life and business

  • One Trillion Scientists

    What if we had one trillion scientists working 24/7? Sakana AI’s new AI Scientist just might make that happen.

    The Tokyo research lab released a new AI system that can automate the research process. The AI Scientist can do a literature review, plan and conduct experiments, and write up the results.

    Even better, an AI Reviewer reviews the paper and helps decide if it should be published! All the code to spin up your own AI Scientist is available free today on Github.

    The AI Scientist

    For starters, you give the AI Scientist a broad direction for research. Then, the system looks for important papers in the field.

    It can run experiments, plot the data, and even write it up in LaTeX format.

    The system isn’t perfect yet. The AI Scientist hallucinates from time to time and doesn’t always cite all its sources.

    Still, for a first effort, it’s incredibly impressive!

    Driving Costs to Zero

    Right now, it costs $15 in compute for the AI Scientist to produce a paper. But the cost of AI compute is falling rapidly.

    Compute cost fell 90% in just 2 years from 2020-22. This decline is continuing rapidly and may greatly outpace Moore’s Law.

    Eventually, the cost will be down to pennies per paper. This will allow us to produce papers on a scale we’ve never seen before.

    Today, we may have a few million researchers doing a couple papers a year. In the future, we could be producing billions or trillions of papers, then using AI Reviewers to find the best ones.

    Tackling the Hardest Problems

    It’s 2050 and we have the equivalent of one trillion scientists working around the clock. The AI Scientist is hooked into androids from Figure and Tesla, performing experiments in the real world.

    What problem could possibly withstand that kind of scrutiny?

    Major problems like cancer, heart disease, and energy generation would fall, one by one. AI systems could produce new drugs and new sources of energy so rapidly we can barely keep up.

    And let me tell you where a lot of that new energy will go: right back into compute to run more AI Scientists.

    Wrap-Up

    Today, the AI Scientist is an interesting first effort. But decades from now, we could be sitting here with most of the major problems of humanity solved.

    We could live to 1,000 and use infinite free energy all our lives. Any question we have, we could answer. Any problem we face, we could surmount.

    What an incredible time to be alive.

    What do you think of the AI Scientist?

    More on tech:

    The New Figure 02 — the World’s Best Robot?

    Why AI + Humans Wins

    An AI Copilot for the Economy

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 


  • Paying the Cost to be the Boss

    Here are the financial situations of a few founders I know:

    1) Salary paused indefinitely.
    2) Searching for side jobs to pay the bills while continuing to run the company.
    3) Relying on a spouse with a normal job because the startup isn’t making money.

    We’re talking enormous stress here. But money isn’t the only problem a lot of founders have.

    They also pay a toll in terms of their personal relationships. Here are some of the tougher situations I’ve seen:

    1) Rarely seeing young children.
    2) Losing a future wife.
    3) Drinking escalating.
    4) Health deteriorating.

    Everybody wants to be a founder when it’s all parties and hoodies and TED talks. But that’s not the reality of being an entrepreneur.

    The reality is a stressed out guy or gal sitting at a computer, isolated from friends and family, and slowly going broke.

    And here’s the worst part: for most of them, all this sacrifice won’t lead to success. The company will fail anyway.

    “Gee Francis, that’s some black attitude for a guy that just came back from vacation!”

    I know. But I see so much rah-rah on Twitter that I think it’s time to tell the truth.

    That said, many founders would not want to do anything else. And if you don’t feel the same way, that you absolutely must build this thing, don’t.

    It all comes down to a scene in one of my favorite movies, Heat:

    “So you never wanted a regular type life.”
    “What the f— is that, barbecues and ballgames?”

    What are some sacrifices you’ve made along the way?

    More on tech:

    When Co-Founders Divorce

    How to Get Warm Intros the Easy Way

    Remote vs. In Person: What’s Better for Startups?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • The new figure 02 — the world’s best robot?

    A dark form looks side to side. It raises one hand, opening and closing its fingers with surprising dexterity. This is the Figure 02.

    Figure announced the new robot on Twitter just this morning. The Figure 02 really looks like something from science fiction. Its sleek, black form looks almost menacing — but this robot is designed to help humans, not fight them.

    Better, Faster, Stronger

    The Figure 02 can perform AI inference on-device. It does not need to contact the cloud to run its AI applications.

    This will let Figure react to situations much more quickly. Imagine if we had to ask a remote server before we do anything — life would be impossible!

    The battery is also more than 50% larger, at 2.25 KWh. That’s about 100 times the capacity of my phone’s battery, and should be good for over 20 hours work.

    What amazed me most about this new robot was the hands. They move in a very lifelike manner. Figure has redesigned them for the Figure 02, allowing greater mobility and dexterity.

    Not Just Demoware

    Figure robots are not just demoware. They’re at work today at BMW’s Spartanburg, SC plant.

    The robots are helping assemble the chassis of BMW’s, a step that requires a lot of dexterity. Even if the Figure could only carry parts and act as a laborer, I’d be impressed. But these androids have already gone well beyond that.

    I expect the Figure 02 to take on even more delicate tasks. And I bet it won’t be long until we see them far beyond Spartanburg.

    What Does a Robotic Future Look Like?

    Imagine the world in 2034. I can lease a Figure for $250/month, the same price as a new Honda Civic today.

    The Figure can make all my meals, clean the house and do my laundry. And with the remaining 12 hours on its battery, it can pick up a shift at a factory.

    I get the paycheck (sorry Figure), which covers the cost of the lease plus a tidy profit. Winning!

    Robot workers could also help solve the labor shortage. Since mass immigration is controversial, perhaps androids are a more palatable solution.

    Wrap-Up

    The Figure 02 is incredible. But what we need to be thinking about is what the Figure 12 will look like.

    I expect it to be faster, smarter, stronger and cheaper. Soon, no physical task will be beyond its limits.

    What do you think of the new Figure?

    This is the last blog until Wednesday, August 14th. I’m headed down to Kentucky to visit my grandma! Talk soon!

    More on tech:

    The Most Amazing Video I’ve Ever Seen

    Remote vs. In Person: What’s Better for Startups?

    Llama 3.1 vs. ChatGPT: Battle Royale

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • My Next move in this turbulent market

    This morning, I spoke with my mom on the phone. Like many people, she was worried about the falling market. So I’ll tell you guys what I told her: I’m not selling anything.

    The turmoil started overnight, with Japan’s Nikkei 225 falling 12%, its biggest fall ever. Korea’s Kospi fell 9%, and crypto took a steep dive as well.

    The shockwave hit America next. The S&P 500 is down 3% as I write this on Monday morning. The Nasdaq is down a bit less, at 2.8%.

    Stocks reacted to fears the US may be near recession.

    American Business Keeps Winning

    I’m not investing for tomorrow, and neither are you. We’re investing for the next 30 years.

    So let’s zoom that chart out a bit and see what’s happened to US stocks in the last century:

    Our data begins in January 1928, with the S&P at 319. It rocketed above 500 in the Roaring 20’s, only to sink to a low of 100 during the Great Depression.

    It took nearly 30 years for the S&P to get back to its late 20’s high. It then continued rocketing upward through the 1960’s.

    The 70’s were lackluster, followed by incredible gains in the 80’s and 90’s. Then came the dot com crash.

    Getting back to that early 2000 high took 14 years. And since then, stocks have doubled again.

    What’s the pattern here? Stocks go up, then fall and stay cheap for long periods.

    But inevitably, they recover. The S&P is worth 16 times as much as it was in 1928. Looking back 30 years to when I was a boy, stocks are up more than fivefold.

    At any point in this series, the wise move was to buy and hold.

    The AI Revolution Continues

    Just a couple of weeks ago, stocks hit an all-time high. Investor excitement about AI reached a fever pitch.

    Has anything changed in AI? No.

    Companies are still creating incredible new tools using LLM’s. And I’ll tell you what’s even more exciting: people outside tech are starting to benefit.

    A friend of mine is a commercial real estate broker in NYC. Friday night, he asked me if I’d ever heard of Claude.

    “Yeah, I was actually using it this afternoon,” I told him.

    “I just fed the entire New York City zoning code into it,” he explained. “It’s like a 100 page PDF. Then I just started asking it questions, and it could tell me anything I wanted to know about zoning in New York.”

    What might have taken him half a day without AI was down to 5 minutes.

    We’re just getting started with AI. The productivity gains we’re going to see will be unlike anything we’ve seen before.

    Retail Gets Savvy

    As markets wobble, you might expect average investors to run for the exits. But the retail crowd has come a long way from the meme stock craze of 2021.

    Retail traders were net buyers this morning. They snapped up shares of Magnificent 7 stocks like Nvidia just as others were dumping them.

    I prefer the diversification of an index. But these retail fellas had the right idea — now is a buying opportunity, not a time to sell.

    Wrap-Up

    Whatever happens today, there’s only one question that matters. In 30 years time, do you think American business will be worth more, the same, or less?

    American businesses and their peers abroad keep innovating. This is true in good markets and bad.

    When you own stocks, you own a share of that innovation. Long term, it’s hard to lose.

    What are your thoughts on the market turmoil?

    More on markets:

    114 Days

    The Coming M&A Wave

    Top-Heavy Markets Spell Trouble for Late Stage Startups

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • When Co-Founders Divorce

    Yesterday afternoon, I was chatting with a great founder. She was having a really hard time — her two co-founders had just left the company.

    People rarely talk about co-founder divorce. But it happens, and when it does, it has a profound effect on a company.

    After a co-founder breakup, your startup can be better or it can be worse. Here’s how to take that rotten situation and make it a win.

    A Painful Time

    The founder I spoke to really struggled with the loss of her co-founders.

    I can only imagine the emotional rollercoaster involved. One must feel abandoned, even hopeless at times.

    But when we spoke, she was beginning to bounce back. And that’s the key.

    In a situation this stressful, anyone will feel sad and upset. The key is to get through it and not give up.

    Your company fails on one condition, and one condition only: if you give up. Until then, you’re alive.

    Get through this tough time, and you’ll be stronger for it.

    When Divorces Sink a Company

    I think the founder I spoke with yesterday will be okay. But I had a front row seat for another co-founder divorce, and that one was a lot uglier.

    A while back, I invested in a fantastic SaaS company. The round was led by one of the best early stage funds on the planet. Revenue growth was nuts, nearly doubling every month.

    “There are no sure things in startupland,” I said to myself. “But come on, this is basically a sure thing.”

    Oh Francis, how little you knew.

    Right after the round closed, one co-founder pushed the other out. Ever since, the company has been going down the tubes.

    As funding tightened in 2022, the surviving co-founder did nothing to cut burn. The company was burning almost $200,000 a month, obscene for a seed stage company.

    As we sit here in the summer of 2024, the company is likely to shut down any day. We’ll be lucky to recover a cent.

    They snatched defeat from the jaws of victory.

    Lessons From a Bad Break-Up

    When co-founders break up, the fate of the company depends on the quality of whoever takes over. Unfortunately, this fellow was a lot better at company politics than he was at actually running the startup.

    If the folks who leave weren’t contributing much, you might actually see your company accelerate. So, not all break-ups are bad.

    The key here is to avoid pointless fighting. And if a divorce does happen, move forward with the best team you can.

    About That Second Marriage

    Don’t be in a rush to replace your departed co-founders. You don’t want to go through this whole thing again in a year, do you?

    Take some time and think. When you’re ready, I want you to try this:

    Make a list of the 10 best people you’ve ever worked with. Contact every single one of them. Ask them to join you as a co-founder.

    To be a great founder, you have to become a great salesman. And this is the most important sale you’ll ever make.

    Avoid people you don’t know. You have no idea if you’ll get along with them or if they’ll work hard. Prioritize people you know, like and respect.

    Wrap-Up

    I felt sorry for the wonderful founder I spoke with yesterday. She was being put through the wringer through no fault of her own.

    But I think her company will come out better for it. They’ve dropped the dead weight and will move faster because of it.

    Maybe you’re in a similar situation. If so, know that it’s not the end of your company.

    In fact, it just might be the thing that takes you to the next level.

    Have you seen co-founders divorce?

    More on tech:

    How to Get Warm Intros the Easy Way
    Four Cap Table Red Flags That Can Kill a Deal

    Why You Shouldn’t Raise VC in the Summer

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How to Get Warm Intros the Easy Way

    We all know a warm intro beats a cold message any day. But how do you get them?

    I’m going to show you how to get 10X the warm intros you’re getting today. And it’s surprisingly simple.

    Getting more intros is all about making it easy for the person doing the intro. Here’s how it works…

    Provide a Forwardable Blurb

    I want you to raise your right hand. Pledge to me that you’ll never, ever ask for an introduction again without providing a forwardable blurb.

    You don’t want to ask someone to write a whole introductory e-mail explaining who you are and what your company does. If you’re relying on someone to do that, odds are you’ll never get the introduction.

    It’s too much work for them!

    Instead, provide them with a forwardable blurb like this:

    “Uber is an app where anyone can get a ride anywhere, anytime. Uber is 10x better than a taxi: faster, cheaper, and safer.

    We are starting with black cars. Eventually we will replace taxis, an $80 billion market.

    We are at $10,000 a month in revenue.

    Our team is Travis (CEO, serial entrepreneur) and Garrett (CTO, co-founder of Stumbledupon).

    Deck: pitch.com/uberdeck

    Calendly: calendly.com/uberfounders

    We look forward to speaking with you!”

    Notice how easy this makes it for someone to introduce you! You’ve done all the work for them.

    What Your Blurb Should Include

    Model your blurb on the one I gave you above. Be sure to include these elements:

    1) What your company does.
    2) Traction.
    3) Brief info on team.
    4) Link to deck.
    5) Link to your Calendly to book a meeting.

    Keep it brief. Under 100 words is a good guideline.

    Feel free to re-use the same blurb for multiple intros. That’s what it’s for!

    Ask for Intros to Specific People

    Don’t just ask someone “Do you know anyone who would be interested?” Again, you’re putting the work on them, and they don’t care about this as much as you do.

    They may not think of anyone off hand. Or they may miss people they know who could be great!

    Stalk their LinkedIn connections. Find out who invested in their startup.

    Then, see who among those folks would be the best people to meet.

    Maybe you see that I’m connected to Jim at ACME Ventures. Jim invests in seed stage marketplaces just like yours.

    Ask specifically for an intro to Jim, and tell me why that makes sense.

    Perhaps you notice that I’m also connected to Mary at XYZ Ventures. Mary invests in space tech.

    Don’t waste your time, my time, or Mary’s. Don’t ask to meet her — she’s never going to invest in a marketplace like yours anyway!

    Wrap-Up

    Getting huge numbers of warm intros should be easy. Everyone you know and everyone you meet is capable of providing them.

    But you’ve got to make it as easy for them as possible. Reduce the friction and you’ll get more results.

    Before you meet someone, know who in their network you want to talk to and have your blurb ready. Ask for those intros during the meeting and send the blurb right after.

    Do this, and you’ll be getting more meetings than you can handle!

    How do you get warm intros?

    More on tech:

    Four Cap Table Red Flags That Can Kill a Deal

    Why You Shouldn’t Raise VC in the Summer

    Remote vs. In Person: What’s Better for Startups?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Four Cap Table Red Flags That Can Kill a Deal

    Deep in the bowels of a startup’s data room, there’s a critical document: the cap table. A problem with this document can kill a financing. Let me run you through 4 common cap table problems so you can avoid them.

    1) Dev Shop or Venture Studio on the Cap Table.

    Here’s something you never want to hear: “What’s ACME Ventures and why do they own 40% of the company?”

    Some startups come out of a venture studio. These programs are a lot like accelerators, except they take way more equity.

    A typical accelerator like YC takes about 7% of your company. 40% is outrageous.

    If YC, the best program in the world, gets 7%, why should any other program get 40%

    The problem with a venture studio owning so much of a company is it leaves way less stock for the founders. And they’re the ones actually doing the work.

    Some startups give a huge slug of equity to another group of predators, the dev shops. These agencies help build your product.

    I recommend against using them even if they don’t take equity. But if they take a big slice of your startup, it’s an absolute nonstarter.

    2) No CTO With 10% + Equity. A true founder owns at least 10% of the company at seed stage. When I see a startup that doesn’t have anyone technical at 10% + ownership, I get worried.

    Who will keep building product if this company runs out of money? Hired help will run for the hills.

    Only someone incentivized with a big chunk of stock will keep working even without a salary.

    A lot of startups are hiring a Founding Engineer or Lead Engineer, giving them a couple percentage points of equity, and calling it a day. No bueno.

    I also see an engineer being named “CTO” but without the ownership to back up that title. An engineer with 5% equity isn’t a true CTO.

    3) Departed Co-Founder Owns Too Much Stock. Sometimes, a co-founder decides this whole company building thing isn’t for him. I get it — the late nights, the crappy (nonexistent?) pay, who could blame him?!

    But you don’t want that guy owning a fat slice of your company. You want to reserve that stock for people who are actually contributing day to day.

    You can solve this problem by vesting everyone’s shares over 4 years, as most tech companies do. This way, you don’t reward people for work they haven’t done.

    If you messed this up and a departed co-founder owns a larger chunk, you can still recover. So long as they don’t own over 10%, it’s usually not a problem when you go to raise money.

    4) Founder Equity Too Low. To make a startup a big success, founders will have to work day and night for a decade. If we expect them to do that, they better have appropriate incentives.

    At the early stages, founders should own the large majority of the company. At the close of a seed stage funding round, the cap table might look like this:

    Founders: 60%
    Employees: 20%
    New Investors: 20%

    I’ve seen seed stage companies where the CEO’s equity was 10% or less. That means that after many more funding rounds, the CEO would own next to nothing at IPO.

    You can’t get someone to work 100 hours a week if they don’t own a meaningful piece of the company.

    Wrap-Up

    All these cap table problems come down to founder incentives. We want to assemble the right team and give them strong incentives to succeed.

    This means we need builders, and we need to give them serious ownership. We can’t waste ownership on venture studios, dev shops, or people who don’t work here anymore.

    In the early stages, keep your cap table tight and founder ownership high.

    If you do this, you’ll make more money. You’ll also find it easier to fundraise!

    What cap table problems are you seeing out there?

    More on tech:

    Why You Shouldn’t Raise VC in the Summer

    Remote vs. In Person: What’s Better for Startups?
    Why I Wait for a Lead Investor

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why I Wait for a Lead Investor

    You love the founder and the company is crushing it. Time to write a check, right? Think again.

    There’s one other little matter that needs to be ironed out before I invest in a startup: finding a lead investor.

    A lead investor sets the price and terms of the round. The lead also does the deepest diligence on the company and will usually join the board if the company has one.

    Why is this lead investor so important to me as an angel? Let me explain…

    Getting to the Next Level

    My $5,000 check is not going to get a company to the next level all on its own. Neither will a $25,000, $50,000, or even $100,000 check.

    For a company to really break through, it’s going to take seven figures. And if you want that kind of cash, you need a lead investor.

    Lead investors generally put $1 to $2 million into a seed round. That’s the kind of cash that allows you to hire more engineers and sales guys and really upshift growth.

    Doing That Pesky Diligence

    Sometimes people ask me, “Francis, how do you diligence a company you’re thinking of investing in?”

    The answer is that as an individual investor, you really can’t. You’re relying on the lead to do the diligence.

    Of course, I can meet with the founder, use the product, read the deck and deal memo, research competitors, etc. And I do all that.

    But a good lead investor does a much deeper form of due diligence. They talk to customers, review contracts and bank statements, check on IP assignments, and a lot more.

    Imagine if every single person in the round did that. Customers might be getting 30 calls in the space of a couple weeks!

    That’s unmanageable for them. So angels and smaller VC funds rely on the lead to do that diligence.

    Better Performance

    At one point, I decided to run an experiment. What if I invested in whatever startup I liked, lead or no lead?

    I put a couple of checks into companies that weren’t even raising but were performing well. Fast forward a year or two…

    None of those companies is doing well. Meanwhile, many of the startups that had lead investors are doing great.

    If a startup can’t pull in a big round with a lead VC, there’s probably a reason — even if I couldn’t find it.

    What’s more, the startup that didn’t raise a big round is at a huge disadvantage. Its competitors could be sitting on millions.

    Getting The Round Done

    If I really like a company, I don’t just sit back and hope they get a lead investor. I make intros to VC’s in the hopes of finding them that lead.

    This lets me prove my value to a founder. If I made some great intros, he’ll save me a spot once that round comes together.

    Plus, I just enjoy helping founders I like!

    The One Exception

    There is one exception to the lead investor rule: a party round.

    Party rounds can work, provided enough cash goes into the company. What’s more, the largest single check sometimes does the same diligence a lead VC would anyway.

    I look for 12+ months runway signed and wired. Not “committed.” Not “soft circled.” In the bank.

    You’d be amazed how those commitments can evaporate when it’s time to actually write a check.

    Party rounds can still make great investments. In fact, my most successful investment to date was a party round.

    Wrap-Up

    As an angel, it’s easy to get excited when you meet a great founder. I get excited too!

    But these days, I never jump the gun.

    I want a lead investor before I write a check. This way, I know the company checks out on diligence. I also know they’ll have enough cash to hit the big time.

    Do you look for a lead investor?

    More on tech:

    The Simple Way to Angel Invest

    Why You Shouldn’t Raise VC in the Summer

    Remote vs. In Person: What’s Better for Startups?

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Why You Shouldn’t Raise VC in the Summer

    When I e-mail my friends in VC during the summer, they often take 1-4 weeks to get back to me. Are you sure you want to raise right now?

    Every year, venture fundraising hits two troughs: one in the summer, and another between Thanksgiving and New Year’s. And yet, some founders raise at those times anyway.

    Here’s why I think that’s a mistake…

    Giving Yourself the Best Possible Shot

    Raising millions of dollars is really hard. Why not give yourself the best possible shot?

    Raising at a time when many VC’s are on vacation puts you at a serious disadvantage. And you need every advantage you can get.

    You don’t want your company slowly running out of money while Jim the VC drinks spritzers on the Cote d’Azur. It’s not a serious issue for Jim, but for you, it’s existential.

    Landing at the Bottom of the Inbox

    Let’s say you e-mail Jim today. He doesn’t get back in the office for another 2 weeks.

    When he finally sits down at his desk, you’ll be at the bottom of his inbox. That means you’ll be waiting even longer for a reply — if you get one at all!

    You want to land right at the top. The best way to do that is avoid raising when people are out of the office.

    When to Raise

    If I were a founder, I’d start raising the first Monday after New Year’s or the first Monday after Labor Day. That lets everyone get back from their vacation, get through their e-mail backlog, and be ready to do business.

    A lot of VC’s are lazy. You want to remove any possible excuses. “Oh, I’m just getting back from vacation, blah blah blah.”

    So, the next two ideal dates to start raising would be Monday, September 9 2024 and Monday, January 6th 2025.

    What If You Can’t Wait?

    “But Francis, I’m almost out of runway! I can’t wait till September.”

    I’m sorry, but this is a failure of planning on your part. It’s best to raise from a position of strength, which means being breakeven.

    If you can’t do that, time your cash-out date carefully.

    You want around 9 months runway in the bank when you start raising. Many raises take 6 months these days. You want to still have around 3 months cash in the bank by the time the round is closing.

    Wrap-Up

    Some founders raise successfully in the summer. And not all investors take the season off. In fact, I did 4 deals last August, my most ever in a month.

    But the exceptions don’t matter. We’re talking about giving you the best possible odds of raising money.

    And the best odds aren’t in July when half the industry is eating gelato in Italy.

    When do you think is the best time to raise?

    More on tech:

    Remote vs. In Person: What’s Better for Startups?

    The Easiest Way to Help Founders

    The Startup Pitch Checklist

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

    ·

  • Remote vs. In Person: What’s Better for Startups?

    Investors love to argue whether startups should be in person or remote. Wiz is remote-first and just got a $23 billion acquisition offer. Can we end this debate?

    The Game of Outliers

    Time and time again, I hear investors trying to sound all hard core, saying you’ve got to be in the office 5 days a week. But the evidence shows us you can build a great company either way.

    We’re in a business of outliers. Any criterion that could exclude a Wiz has to be dropped.

    Instead, we need to focus on factors that are more relevant.

    Are the founders great entrepreneurs? Is the company growing fast?

    A Peak Into My Portfolio

    In my portfolio, I have great companies operating in person and others that are remote.

    One of my most successful has everyone in an office in Queens 6 days a week. Another top performer is 100% remote — even the CEO works out of a Starbucks.

    Some founders love to be in person. Others like flexibility.

    The key for me as an investor is not to focus on a factor that doesn’t make much difference.

    My Advice to Startups

    If you’re starting a company today, here’s my advice: go remote.

    This lets you recruit anyone, anywhere. The best people are hard to find and hard to win.

    You, a tiny startup, need every advantage you can get. And being remote gives you an advantage in recruiting.

    Of course, it depends on the startup.

    For hardware companies, in person is a must. And for companies that are very sales driven, in person can be better, at least for the sales team. People in sales tend to prefer it — they feed off each other’s energy.

    Wrap-Up

    Wiz is the best case scenario in startupland. And it’s a remote first company.

    So if any of you investors think in person is the only way to build, it’s time to rethink that.

    We investors have only one job: find a Wiz. And we won’t get there by focusing on irrelevant details like whether everyone comes to an office.

    What do you prefer, remote or in person?

    Have a great weekend, everyone!

    More on tech:

    The Easiest Way to Help Founders

    Why I Passed: “3L”

    The Simple Way to Angel Invest

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order.