Welcome back to Part 5 of “50 Ways to Mess Up Your Startup” so you can avoid them! This post included numbers 36-41. Because there are so many, I’m posting them in small groups. I’ve included a video of numbers 37-39 about the value (or not) of common stock and how to get the best deal for founders! ) to give you more insights on problems that can derail your startup. I hope these are of help to you.
Here are “ways” 36-41 to Mess Up Your Startup! (Don’t make these mistakes!)
36. Assume that all employees are as motivated as you are, unless you motivate them the same way you are motivated.
37. Forget that common stock is worthless unless your exit is an IPO or a big multiple acquisition – and work for too little compensation – one former entrepreneur turned investor likened entrepreneurship (with common stock) to betting on the lottery. Studies show that founders do more for less than “hired CEOs”.
38. Forget to buy yourself preferred stock alongside your investors.
39. Forget that 90% of the time Venture backed startups are a total loss or break-even for the investors – where does that leave founders?
40. Incorrectly assume that a VC may be a “vulture investor” but once they’ve invested they’re “your vultures”. They are always vultures.Neglect “Startup Therapy™ in the earliest days of your startup – and end up with poor founder relationships and a lack of clarity on roles and expectations.
41. Ignore the fact that the first one fired by investors is the founder / CEO when the company outgrows the founder.
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