This is my third iteration of the 99 series for founders. You can find the first two here and here. The premise for this series was simple. The best, most insightful, unsuspecting lessons are hidden in the deepest, darkest corners of the internet. Hell, many more are hidden in rooms behind closed doors. The goal of this 99 series is to unveil those. Advice you’ve likely never thought about, and most likely have never heard of.
While you don’t need to read all the below at once, it’s helpful to keep the below at your fingertips for when you do need them. As always, unless the advice is not cited, all advice has been backlinked to its source, in case you want the longer, sometimes more nuanced version.
To make it easier for you, I’ve also pooled the advice in categories, depending on your needs:
- Fundraising (22)
- Governance (5)
- Hiring/Team/Culture (44)
- Product/Customers (23)
- Competition (1)
- Legal (2)
- Expenses (1)
- Secondaries (1)
P.S. Have I started the next one in the 99 series for founders? Yes, I have. Stay tuned!
Fundraising
1/ “Once you take venture capital, the venture capitalist’s business model is your business model. You’ve got to get liquid at a number that makes sense for them. High valuations are good because you take less dilution. Et Cetera. But the reality is that when you have a high valuation, that starts to eliminate your options. ” — Chris Douvos
2/ The employee option pool is easier to negotiate than asking an investor to take less ownership. The pool at the time of term sheet comes out of founder/team’s equity. If the pool becomes completely allocated post-investment, you need to go back to the board and ask for a larger pool, and everyone (you and VCs) gets diluted then.
3/ Beware of the “senior pari-passu,” which means that that investor gets paid paid back before everyone else on the preference stack AND they get equal footing with all the other investors. The thing to watch out for isn’t necessarily for the mechanics of the term itself, but the fact that if you let one investor have that in this round, every subsequent round, investors then will ask for that as well.
4/ Repeat founders often ask for co-sale right immunity (usually 15%) when putting together term sheets. Co-sale rights are usually provisions investors add in to prevent you, the founder, from liquidating before a liquidity event. The rights dictate the when you want to sell your equity, the investor has first dibs to buy your equity AND if not, they can also sell their equity alongside you. Because there are additional provisions, most buyers may not want to put in all the work to diligence just to have an existing investor buy your equity. And also, if your existing investors are also selling, it sends a negative signal to potential buyers.
5/ If any corporates own more than 19.5% of a company, they have to write you off as a subsidiary of the corporate and report your losses as their losses. So they’re less valuation sensitive and care less for ownership.
6/ You’re likely not the only one in market with your solution. If a competitor raises a massive round, that’s market validation. And not a reason to change your pitch. You should only change your pitch if your customers are opting for your competitor, but not if VCs are talking about your competitor. If VCs ask about your well-funded competitor, say “My customers don’t bring this up with me. But rather they bring up incumbents and this is why we’re tackling this space in full force.”
7/ “Once you have $500k+ raised, spend 2/3 of your time on funds, 1/3 on small checks.” — Ash Rust
8/ Beware of SAFE overhangs. You probably don’t want to raise more than 25% on SAFEs in comparison to the next priced round. — Martin Tobias
9/ Don’t say “The market is so large, there are room for many winners.” To a VC, that’s code for “This founder is getting their ass handed to them by competition.” — Harry Stebbings
10/ If a large number of your employee base do not have the experience of being in a startup, “make a choice about how/when/if to be transparent about the things that are happening (good and bad) and the level of startup experience within the group will be a critical factor in whether the decision to be transparent turns out to be a good one.” — Javier Soltero
11/ To fundraise, even if your last X number of months sucked, you need to show just three months of great growth prior to the fundraise. — Jason Lemkin
12/ Rough benchmarks for enterprise revenue growth for things to be interesting to VCs (— Jason Lemkin):
- Before $1M ARR, growing 10%-15% a month
- Around $1M ARR, growing 8%-10% a month or so
- Around $10M ARR, ideally doubling
13/ “An investor is an employee you can’t fire.” — Vinod Khosla
14/ “Things that break the rules have a bigger threshold to overcome to grab the reader’s attention, but once they do, they tend to have a stronger, and more dedicated following. Blandness tends to get fewer dedicated followers.” — Brandon Sanderson on creative writing, but applies just as well to pitches
15/ “Great worldbuilding with bad characters and a bad plot is an encyclopedia. Great characters and a great plot with bad worldbuilding is still often an excellent book. […] The fact that time turners break the entire universe of Harry Potter wide open does not prevent that from being the strongest book in the entire series.” — Brandon Sanderson on story plots, but also applies to markets and founding teams. Replace worldbuilding with market. Replace characters with team, and plot with product-market fit or founder-market fit.
16/ In all great stories, the protagonist (in the case of a pitch, you) is proactive, capable, and relatable. Your pitch needs to show all three, but at the minimum two out of the three. — Brandon Sanderson
17/ “Data rooms are where fund-raising processes go to die.” Prioritize in-person and live conversations. When your investor asks you for documents, ask for 15 minutes on their calendar so you can “best prepare” the information they want. If they aren’t willing to give you that 15 minutes, you’ve lost the deal already. — Mark Suster
18/ “Second conversation with a serious investor is usually around what are you trying to prove and who are you trying to prove that to.” — Fund III GP
19/ “Set your own agenda or someone else will.” — Melinda Gates
20/ “The ‘raise very little’ strategy only works if you’re in a market that most people believe (incorrectly) is tiny or unimportant. If other people are paying attention, you have to beat the next guy.” — Parker Conrad
21/ Beware of stacking SAFEs. And be sure to model out that you as the founder(s), won’t dip below 50% ownership before the Series A. This is a more common problem than most founders think. Inspired by Itamar Novick.
22/ “Before you send a single email or take your first call, you should have a fully-researched pipeline CRM with a minimum number of qualified target investors.” — Chris Neumann
- Pre-Seed: 100 – 150 qualified target investors (a mix of angel investors and VCs)
- Seed: 80 – 100 qualified target investors (mostly VCs)
- Series A: 60 – 80 qualified target investors (all VCs)
- Series B: 40 – 60 qualified target investors (all VCs)
Governance
23/ Find your independent board member before shit hits the fan (usually when your investor representation and you the founders disagree). Because by the time you find an independent board member when things go south, your investor will recommend someone who’ll most likely take their side. Board members recommended by VCs usually have long standing relationships with investors and are likely to sit or have sat on other boards with that investor previously. And because they have a longer standing relationship with that VC, they will likely side with the VC when there’s a disagreement.
24/ “Board members can’t make companies but they can destroy companies.” — Brian Chesky
25/ Ask your prospective investors how long they plan to be at their firm. The worst thing that can happen is you bring on a board member and they switch firms after a year, then you’re left with a someone you didn’t pick. It’s probably also a good idea to let the investor have their board seat, contingent on them working at that firm. — Joseph Floyd
26/ Consider incorporating the company in Nevada or Texas, as Delaware courts are becoming more judiciously activist. Especially consider this if you are either politically exposed or you want more leeway and protection as a founder. — Elad Gil
27/ “When you build with other people’s money, you don’t just owe them outcomes—you owe them truth. And selling your cash to a zombie isn’t a strategy. It’s a story you tell yourself to avoid facing the music.” — Lloyed Lobo
Hiring/Team/Culture
28/ “If you raise a lot of money, do a hiring freeze and don’t hire anybody for 90 days. Money’s not going to solve your problems. You are going to solve them.” — Ryan Petersen
29/ “If you had to hire everyone based only on you knowing how good they are at a certain video game, what video game would you pick?” — Patrick O’Shaughnessy. People’s choices can be quite revealing. You can likely ask the same question for any activity/sport/topic of choice.
30/ “I hate surprises. Can you tell me something that might go wrong now so that I’m not surprised when it happens?” — Simon Sinek. A great question on how to ask weaknesses without candidates giving you a non-answer.
31/ Beware of candidates who can’t stick to a job for at least 18 months. — Jason Lemkin.
32/ Beware of candidates who love what’s on their resume. You want to be sure you’d hire them even if they didn’t have those logos/titles. — Jason Lemkin.
33/ Beware of candidates who don’t have good reasons to leave their last job. Or any job for that matter. Also watch out for candidates that leave because of salary. — Jason Lemkin.
34/ As soon as you raise capital, you should move out of a coworking space. Because as long as you are there, you cannot shape your company’s culture when the culture of the rest of the coworking space is more prevalent. — A VC who was the first institutional check into 5+ unicorns
35/ “First time founders brag about how many employees they have. Second time founders brag about how few employees they have.” — Dan Siroker.
36/ 20 years of experience is more impressive than 20 one-year experiences for deeply technical problems.
37/ 20 one-year experiences is more impressive than 20 years of experience for cultural (consumer) problems.
38/ Great founders don’t delegate understanding. Senior execs aren’t hired until founders themselves prove out the playbook.
39/ Inspired by Marc Randolph. Set boundaries around your work. Ask yourself, do you want to be starting your 7th startup and their 7th wife/husband? If not, be uncompromising with boundaries around work and life. Usually, I see most founders not have that versus most tech employees, who set boundaries almost in the opposite direction.
40/ “My two rules of thumb for CEOs (and all leaders) are:
- ‘if you feel like a broken record, you’re probably doing something right’ and
- ‘always craft your comms for the person who just started this week.'” — Molly Graham
41/ At Starbucks, no matter what seniority you are, every employee has lowercase titles. And it isn’t a typo.
42/ If you don’t know how to hire a 10/10 CTO looks like, find a world-class CTO then have them help you interview CTO candidates. It’s important to nail this right in the beginning no matter how long that takes. — Jason Lemkin
43/ “People duck as a natural reflex when something is hurled at them. Similarly, the excellence reflex is a natural reaction to fix something that isn’t right, or to improve something that could be better. The excellence reflex is rooted in instinct and upbringing, and then constantly honed through awareness, caring, and practice. The overarching concern to do the right thing well is something we can’t train for. Either it’s there or it isn’t. So we need to train how to hire for it.” — Danny Meyer
44/ Prioritize references over interviewing when hiring. “Executives have more experience bullshitting you than you have experience detecting their bullshit. So it’s like an asymmetric game where you’re a white belt fighting a black belt and they’re just going to punch you in the face repeatedly.” — Brian Chesky
45/ At the end of a candidate interview process, try to convince them out of joining the company. If you only paint them the rosy picture of joining, even if they join, they’ll joined disillusioned and with expectations that this job will be a country club, which it shouldn’t be.
46/ One of the best job ads out there by Ernest Shackleton, a 19th/20th century Antarctic explorer: “Men wanted for hazardous journey, small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful, honor and recognition in case of success.”
47/ “The health of an organization is the relationship between engineering and marketing. Or in enterprise, the relationship between engineering and sales.” — Brian Chesky
48/ “Great leadership is presence, not absence.” — Brian Chesky
49/ “I want the guy who understands his limitations instead of the guy who doesn’t. On the other hand, I’ve learned something terribly important in life. I learned that from Howard Owens. And you know what he used to say? Never underestimate the man who overestimates himself.” — Charlie Munger
50/ “If you pay great people internally, you can push back on the external fees. If you don’t pay great people internally, then you’re a price taker.” — Ashby Monk
51/ “Expect 60% of your VPs to work out — and that’s if you do it right.” — Dev Ittycheria
52/ Be generous with startup equity for your first 10 employees, “as much as leaving 30% of the pool to non-founders.” Be willing to give your early engineers 3-5% of equity, as opposed to only 50-100 basis points. — Vinod Khosla
53/ “A company becomes the people it hires. […] Experience has shown me that successful startups seldom follow their original plans. The early team not only determines how the usual risks are handled but also evolves the plans to better utilize their opportunities and to address and redefine their risks continuously.” — Vinod Khosla
54/ “I often tell pensions you should pay people at the 49th percentile. So, just a bit less than average. So that the people going and working there also share the mission. They love the mission ‘cause that actually is, in my experience, the magic of the culture in these organizations that you don’t want to lose.” — Ashby Monk
55/ “Innovation everywhere, but especially in the land of pensions, endowments, and foundations, is a function of courage and crisis.” — Ashby Monk
56/ “You stay obstinate about your vision; you stay really flexible about your tactics. […] Nobody ever got to Mount Everest by charting a straight path to the peak.” — Vinod Khosla
57/ Questions to ask a candidate by Graham Duncan:
- What criteria would you use to hire someone to do this job if you were in my seat?
- How would your spouse or sibling describe you with ten adjectives?
- I think we’re aligned in wanting this to be a good fit, you don’t want us to counsel you out in six months and neither do we. Let’s take the perspective of ourselves in six months and it didn’t work. What’s your best guess of what was going on that made it not work?
- What are the names of your last five managers, and how would they each rate your overall performance on a 1-100?
- What are you most torn about right now in your professional life?
- How did you prepare for this interview?
- How do you feel this interview is going?
58/ Empower your entire team to be owners in the success of your company. “Take ownership and don’t give your project a chance to fail. Dumping your bottleneck on someone and then just walking away until it’s done is lazy and it gives room for error and I want you to have a mindset that God himself couldn’t stop you from making this video on time. Check. In. Daily. Leave. No. Room. For. Error.” — Jimmy Donaldson “Mr. Beast”
59/ “CEOs are pinch hitters. We should be working on the things that nobody else can or nobody else is.” — Jensen Huang
60/ It’s only after you’ve seen excellence first hand do you no longer need to outsource the recognition of excellence to others (brands, titles, other references).
61/ “When you’re speaking with backchannel references, you know that some of these are also mentors to the candidate, and accordingly will have influence. They’ll likely call the candidate right after your call anyway to tell them how you’re thinking about them. So ask the pointed questions you need to, but then take 10 mins at the end to also tell this person what you’re building, why it could be a special company, the momentum you have in the market and why you’re particularly excited about the candidate for this role. Get the reference excited about this opportunity for the candidate.” — Nakul Mandan
62/ “Every meeting with a great candidate is a buy-and-sell meeting, and you want to build their excitement about you to its peak right before you make the offer. Making the offer too early—before they’re fully sold—can be just as bad as losing momentum by moving too slow on someone you know you want.” — Samantha Price
63/ On co-founders being in the same boat with no Plan B… “We actually wrote this in the shareholder’s agreement and it lived there all the way until the IPO. If one of us took another job or a side hustle or took any income from any other source, we should have to give up our shares. We wanted to be fully committed. If we’re going to fail, we’re not going to fail for lack of effort.” — Olivier Bernhard
64/ “You have made a mis-hire if your Customer Success leader doesn’t understand the pains, needs, and desires of your customers as well as you do within 90 days.” — John Gleeson
65/ Ask a candidate to explain a technical challenge and to talk through how they’d approach it. Then ask them to think through how they’d do it again – but in half the time.” — Keller Rinaudo Cliffton / Sarah Guo
66/ “Your org chart either accelerates or impedes your velocity. Conway’s Law inevitably shapes output—teams structured for pace will produce systems designed for pace.” — Sarah Guo
67/ “Just look at ARR per Employee. It’s the canary in the unicorn coal mine.” — Lloyed Lobo
68/ While your co-founders should excel in areas you lack and love growing further on that wavelength, they must also at some point in their career want to grow in the area you excel in. Otherwise, they’ll never truly appreciate the work you do. And unspoken expectations lead to quiet resentments.
69/ “I find most meetings are best scheduled for 15-20 minutes, or 2 hours. The default of 1 hour is usually wrong, and leads to a lot of wasted time.” — Sam Altman
70/ “Strategy is choosing what not to do.” — Peter Rahal
71/ When hiring talent, ask yourself: Are this candidate’s best days ahead of her or behind her?
Product/Customers
72/ The best way to slow a project down is to add more people to it.
73/ “Never delegate understanding.” — Charles and Ray Eames
74/ There’s this great line in a book I was recently gifted by a founder. “There is only one boss — the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.”
75/ A community or 1000 true fans built without big brands and logos is far more impressive than a community built by leveraging someone else’s brands.
76/ If your value prop is unique, you should be a price setter not a price taker, meaning your gross margins should be really good.
A compelling value prop is a comment on high operating margins. You shouldn’t need to spend a lot on sales and marketing. So the metrics to highlight would be good new ARR/S&M, LTV:CAC ratios, payback periods, or percent of organic to paid growth. — Pat Grady
77/ “If we don’t create the thing that kills Facebook, someone else will.” — Mark Zuckerberg, via a red book titled Facebook Was Not Originally Created to Be a Company, given to every employee pre-IPO
78/ The best sales people are often those who communicate the most with the engineers and product team. They tend to understand the product the best. Rule of thumb should be 80% inside, 20% outside. — Former founder with a 9-figure exit
79/ “Concentration of force is the first principal strategy. Spreading yourself too thin means not concentrating resources on the sales you could win because you are spreading time on lower quality prospects. Doing 90% of what it takes to win doesn’t result in 90% of the revenue, it results in zero. You must pick the battles you can win and win the battles you pick.” — Rick Page
80/ “One of our clients said this about a large defense contractor with multiple subsidiaries: ‘having business at one business unit not only doesn’t help me at the next one, it actually hurt me. They hate each other so much that if one business unit is for me, the other ones are against me. But they are all united in one value: they hate corporate. So the potential for working my way to the corporate offices and coming down as their worldwide standard is impossible in an account like this.” — Rick Page
81/ “Pain doesn’t come from the business problem, it comes from the political embarrassment of the business problem. If the pain or lost opportunity is not visible, then it’s not embarrassing and it will not drive business buying activity to a close.” — Rick Page
82/ “Mr. Prospect, we’ve announced a 6% price increase. We’d hate to see you buy the same proposal later at a higher price, so we really need to get this business in by the end of the quarter to secure this price. — Not only is this technique predictable, but after months of building value for your solution, you have now commoditized yourself. You have turned it from value to price on order to close business at the end of the quarter. Once you have offered a discount, you have announced what kind of vendor you are and the only question now is the price. Let the games begin.” — Rick Page
83/ “You must refocus off the imagined political benefit of a lower price, and on the longer term benefits of the overall project. ‘Mr. Prospect, how are you measured and what you will be remembered for three years from now won’t be the price, it will be the success of the project. If this goes well, the cost will be a detail. If the project goes poorly, no one will say ‘well at least we got a bargain.”” — Rick Page
84/ “Try not to take no from a person who can’t say yes.” — Rick Page
85/ Stacking the bricks, a Steve Jobs’ concept. If you have a pile of bricks and lay them on the ground, then no one will notice the ground. If you stack them up vertically, you create a tower; and everyone will notice the tower. Consider this when you have product features, launches and fixes.
86/ As of Q4 2024, it takes about 70 days to close a $100K contract for enterprise customers. Use that as your benchmark. If you’re faster, brag about it. If you’re slower than that, figure out how to close faster. — Gong State of Revenue Growth 2025 report
87/ Beware of “annual curiosity revenue.” “AI companies with quick early ARR growth can lead to false positives as many are seeing massive churn rates.” — Samir Kaji
88/ Your job is to get to innovation retention before your incumbents get to innovation.
89/ If you didn’t help create the proposal with your customer, you’ve already lost.
90/ People don’t change when they’ve made a mistake. People change when there’s a public embarrassment of them making a mistake.
91/ Know your customers intimately. Go visit your customers as often as you can. In fact, get as many passes / office keys to their offices as possible, and spend time with them.
92/ “Every other week, we have a customer join for the first 30 minutes of our management team meeting: they share their candid feedback, and ~40 leaders from across Stripe listen. Even though we already have a lot of customer feedback mechanisms, it somehow always spurs new thoughts and investigations.” — Patrick Collison
93/ “I see a lot of b2b startups moving to multiyear pricing from monthly or annual. I think this is usually a bad idea. It hides customer delight issues. It lengthens sales cycles. Overall, it just reduces the signal startups need.” — Brian Halligan
94/ Customers will still highly rate your customer service even if they didn’t get what they wanted if you show you care. That you care for their plight, and you really try to help them get what they want. — Simon Sinek
Competition
95/ “When you get outreach from multiple VC associates out of nowhere, your competitor is out raising and they’re just doing their homework.” — Siqi Chen
Legal
96/ “If you’re selling the business, tell as few people as possible and do everything you can to make sure past employees or former business associates do not find out.” Beware of moths who can start lawsuits. — Sammy Abdullah
97/ When you’re working with boutique investment banks, to protect yourself in case the banker sues when you choose to go with a different buyer… “Make sure the banker contract says they only get paid on intros they make directly and have a 6 month tail. Terminate any banker agreement as soon as they’re no longer working and the process is over; do not let these agreements linger.” — Sammy Abdullah
Expenses
98/ “Never buy a SaaS product owned by private equity unless you have to. Main exception: if founder is still CEO. Why: Impossible to cancel, Price increases out of the blue, Lose any real customer success, Innovation slows down or even ends, Support usually terrible” — Jason Lemkin
Secondaries
99/ If you’re planning to sell founder secondaries, beware of signaling risk. Sometimes, you do have a major life event that needs capital (i.e. buying a home, having a baby, hospital bills, etc.). If you are to sell, don’t sell until the Series B. “And even then I’d suggest titrating up… 2% at A, 5% at B, 10% at >=C.” — Hari Raghavan
Photo by Jonny Gios on Unsplash
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The views expressed on this blogpost are for informational purposes only. None of the views expressed herein constitute legal, investment, business, or tax advice. Any allusions or references to funds or companies are for illustrative purposes only, and should not be relied upon as investment recommendations. Consult a professional investment advisor prior to making any investment decisions.
