High Growth Handbook: Scaling Startups From 10 to 10,000 People

That’s why secondaries probably shouldn’t happen for seed and A and B companies. But generally it’s C and up now where you’re starting to see it quite commonly. Even in B-round cases, you’ll see it if the company’s made substantial progress.

By the time a given company is worth $1 billion or more, the CEO and board should start to think of M&A as a serious tool for accelerating the company’s progress and valuation. For example, at $1 billion market cap, a $10 million acquisition is just 1% of your startup’s equity. If the acquisition can increase your valuation by just 10%, then it

As a founder, you get a couple of shots on goal in your life. And you might even only have one for that thing you’re really super passionate about. I think good VCs now realize that if they’re going to ask you to go for the billion-dollar exit, then they have to be willing to let you take some off the table along the way. So I think the secondary c

I think future companies, especially those that haven’t raised money yet or haven’t raised substantial capital or haven’t gotten product/market fit even loosely, when they’re hiring early employees, they’re really just hiring late founders. And so they should be giving 1, 2, 3, 4% of the company, instead of giving 0.1, 0.2, 0.3, 0.4%. The issue wit

Right now is the lowest-risk time ever to be a founder. You can go into an accelerator and roll the dice, see where it goes. You can get some money, see where it goes. There’s very little risk to being a founder. But early employees are asked to take founder-level risk, because the companies often don’t have product/market fit, without getting foun

Once your company hits a certain scale, you should start meeting with the CEOs of companies you may want to buy every quarter or two. This relationship-building may eventually pay off in a competitive strategic situation. Mark Zuckerberg at Facebook was notoriously focused on building relationships with the founders of WhatsApp and Instagram, leadi

In general, on the low end, an acqui-hire means a 20% signing bonus to founders and standard salaries and packages for everyone else, with the cap table (i.e., the company’s investors) getting no money back. This is more common than people think, and many touted and tweeted acquisitions turn out in reality to be hiring a subset of a team and shutti

The nature of human beings is that you come into a company, you work like a dog, you work really hard, and then you get tired and hire someone to do your job. And it always takes two new hires to do your job. Just repeat that ad nauseam, and you end up with five thousand people sitting around at a web app company. And everyone from the outside is l

We used to have a saying at Venture Hacks: “Valuation is temporary. Control is forever.” Whoever has control can effectively end up controlling your valuation later. Never give up control.