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Index
Dedication
Contents
Introduction
Part 1: Mastering the Fundamentals
Rule 1: Starting a venture has never been easier; succeeding has never been harder.
Rule 2: Try to act normal.
Rule 3: Aim for an order-of-magnitude improvement.
Rule 4: Start small, but be ambitious.
Rule 5: Most failures result from poor execution, not unsuccessful innovation.
Rule 6: The best ideas originate with founders who are users.
Rule 7: Don’t scale your technology until it works.
Rule 8: Manage with maniacal focus.
Rule 9: Target fast-growing, dynamic markets.
Rule 10: Never hire the second best.
Rule 11: Conduct your hiring interviews as if you were an airline pilot.
Rule 12: A part-time game changer is preferable to a full-time seat filler.
Rule 13: Manage your team like a jazz band.
Rule 14: Instead of a free lunch, provide meaningful work.
Rule 15: Teams of professionals with a common mission make the most attractive investments.
Rule 16: Use your financials to tell your story.
Rule 17: Create two business plans: an execution plan and an aspirational plan.
Rule 18: Know your financial numbers and their interdependencies by heart.
Rule 19: Net income is an opinion, but cash flow is a fact.
Rule 20: Unit economics tell you whether you have a business.
Rule 21: Manage working capital as if it were your only source of funds.
Rule 22: Exercise the strictest financial discipline.
Rule 23: Always be frugal.
Rule 24: To get where you are going, you need to know where you are going.
Rule 25: Measurement comes with pitfalls.
Rule 26: Operational setbacks require swift and deep cutbacks.
Rule 27: Save surprises for birthdays, not for your stakeholders.
Rule 28: Strategic pivots offer silver linings.
Part 2: Selecting the Right Investors
Rule 29: Don’t accept money from strangers.
Rule 30: Incubators are good for finding investors, not for developing businesses.
Rule 31: Avoid venture capital unless you absolutely need it.
Rule 32: If you choose venture capital, pick the right type of investor.
Rule 33: Conduct detailed due diligence on your investors.
Rule 34: Personal wealth ≠ good investing.
Rule 35: Choose investors who think like operators.
Rule 36: Deal directly with the decision makers.
Rule 37: Find stable investors.
Rule 38: Select investors who can help future financings.
Rule 39: Investor syndicates need to be managed.
Rule 40: Capital-intensive ventures require deep financial pockets.
Rule 41: Strategic investors pose unique challenges.
Part 3: The Ideal Fundraise
Rule 42: Raise capital in stages as you remove risk.
Rule 43: Minimizing dilution is not your fundraising objective.
Rule 44: Don’t let a temporary fix become a permanent mistake.
Rule 45: Pursue the lowest-cost capital in light of your circumstances.
Rule 46: Escape the traps of venture debt.
Rule 47: Choose one of four approaches to determine how much money to raise.
Rule 48: Always have your aspirational plan ready.
Rule 49: More ventures fail from indigestion than from starvation.
Rule 50: Never stop fundraising.
Rule 51: Venture capital moves in cycles.
Rule 52: Fundraising takes more time than you think.
Rule 53: The pitch must answer the fundamental questions about your venture.
Rule 54: Make it personal.
Rule 55: When pitching, carefully read the room.
Rule 56: Use white papers for deep-dive follow-ups.
Rule 57: Prepare your financing documents ahead of time.
Rule 58: Obsessively drive to the close.
Rule 59: Consistent communication is important in convincing investors.
Rule 60: Milestones can solve irreconcilable valuation differences.
Rule 61: Liquidation preferences will change your outcome.
Rule 62: Do not take rejection personally.
Part 4: Building and Managing Effective Boards
Rule 63: Boards are deliberative bodies, not collections of individuals.
Rule 64: Conflicts of interest and conflicting interests are elephants in the room.
Rule 65: Your board should be operational rather than administrative.
Rule 66: Small boards are better than big ones.
Rule 67: Lead investors ask for board seats; qualify them first.
Rule 68: You need a lead director.
Rule 69: Add independent board members for expertise and objectivity.
Rule 70: True board diversity is a competitive advantage.
Rule 71: Each director must commit to spending meaningful time.
Rule 72: Review director performance regularly.
Rule 73: Your chief financial officer has a special relationship with your board.
Rule 74: The founder should choose the best CEO available.
Rule 75: Find a coach.
Rule 76: It is the CEO’s job to run efficient, productive meetings.
Rule 77: Don’t “oversell” your board.
Rule 78: Board agendas should look like this.
Rule 79: Prepare thoroughly for board meetings.
Rule 80: Use your daily management materials for board meetings.
Rule 81: Too many unanimous board decisions is a sign of trouble.
Rule 82: Use working sessions and committees to reinforce your priorities.
Rule 83: Your board should spend time with your team.
Part 5: Achieving Liquidity
Rule 84: Build companies to last, providing liquidity along the way.
Rule 85: Liquidity is not limited to initial public offerings and acquisitions.
Rule 86: If you go public, don’t slip and fall.
Rule 87: Investors’ and management’s interests in liquidity often conflict.
Rule 88: Individuals need liquidity, too.
Rule 89: Your valuation will have a local maximum.
Rule 90: Ventures aren’t just bought; they can also be sold.
Rule 91: Choose an acquirer; don’t wait to be chosen.
Rule 92: If you want to sell your business, you need to know the decision makers.
Rule 93: Determine whether you are a good fit for an acquirer before contacting them.
Rule 94: Know your acquirer’s acquisition history in detail.
Rule 95: Make yourself visible.
Rule 96: Build a relationship with potential acquirers; don’t cold-call.
Rule 97: Be ready when they are.
Rule 98: Success is not linear.
Rule 99: Prepare for your lucky break.
Rule 100: Learn the rules by heart so you know when to break them.
Epilogue: The Cardinal Rule
Acknowledgments
About the Authors
Copyright
About the Publisher
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