Back in my VC days we ran the FounderFuel accelerator. Our program was blessed with many strong mentors. We regularly brought mentors and companies together.
While this was all good, often the founders would complain of “mentor whiplash”. Mentors would have conflicting advice for these founders.
I see similar issues with more established companies when it comes to their boards. Often they turn to their board for advice. And often, individual board members have different advice. What are you supposed to do? Especially if the conflicting advice comes from investors that made big bets on you.
As we get busier and busier with exit work at SurePath, I thought I’d begin sharing some of the data that we track. We work primarily with SaaS, e-commerce and marketplace companies. But we track activity across the entire software spectrum.
I was at a gathering of most of Canada’s VC fund managers a few weeks ago in Vancouver. One of the fund managers talked about something I have seen firsthand. He referred to it as the “oh shit” board meeting.
This meeting is typically the first meeting after the funding round has closed. No longer having to sell and spin, the management team can speak candidly about what’s going well and more often, what’s not.
Fundraising is a delicate balancing act. Investors generally discount your projections, which creates a temptation to inflate them (and the discount because companies inflate. It’s a vicious circle). But, they can get upset when you miss your projections. What do you do?
If you create realistic projections, you run the risk of investors still discounting them, assuming you’re not a high growth business, and passing. If you pump up your forecasts, then you run the risk of inflating expectations and not meeting them.Continue reading The “Oh Shit” Board Meeting