Soundcloud’s losses: How much is too much?

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As a passionate and regular Soundcloud user I was saddened (but not at all surprised) to learn that the music streaming network is in financial difficulty.

Apparently, they have lost over $70M in the last 2 years alone. To date, they have raised over $150M. According to this leaked document, in 2014 they lost $ 2.25 for every $1 in revenue. Continue reading Soundcloud’s losses: How much is too much?

It’s all just input. You need to make the decisions

Screenshot 2016-02-10 07.57.35Back 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.

Here’s the thing: All the advice you’re getting is just input. You are supposed to digest that input and make the final call.  Continue reading It’s all just input. You need to make the decisions

The “Oh Shit” Board Meeting

http://timemanagementninja.com/wp-content/uploads/2012/01/Bad-Meeting.jpg
http://timemanagementninja.com/wp-content/uploads/2012/01/Bad-Meeting.jpg

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