Rob Hayes (a prominent VC at First Round Capital) has some excellent, practical advice for first-time founders in a recent post. The most important three things for Founders and CEOs to focus on is simply:
“Hiring the right people”;
“Don’t’ run out of money”;
“Always have a North Star.”
We believe that a good CFO needs to be a true business partner to the Founder / CEO in order to focus the startup on these three things. A good CFO is able to bring strategic insight, analysis, and process improvement in order to help the organization scale more efficiently as it grows. This is particularly important here in the San Francisco Bay Area where there is increasing competition for scarce talent and resources.
Here are some more tidbits:
“If you're not spending at least 50% of your time hiring — and that's the minimum — you're already on the road to failure.”
“Hiring people sucks. You spend a ton of time on it that you then can't spend doing the things that you think need to happen ‘right now.”
“When you hire amazing people who are better than you at what they do, you look like a genius.”
“Hire before you need to.
Don't just hire the best; hire the best people for you.
“If you don't think you can convince amazing people to work for your company, you've got a much bigger problem.”
“Find your lieutenants first.”
“If you hate hiring, hire all your top people right away and then let them do the rest.”
“Only think in terms of cash.”
“Founders should be worried about cash on-hand all the time. Even if employees love you, they won't stay if you can't pay them.”
“Form a strong cash management plan. Right after a round closes, the champagne's flowing and everyone's excited — the last thing you want to do is sit down and chart out how to spend that money over the next 18 months. You certainly don't want to think about fundraising all over again. But you need to. “
“Be smart about raising follow-on financing. “
“Everybody ends up waiting until the last possible minute to raise money. They want to achieve as much as they can so that they can get as much as they can out of a round. They assume if they go out and raise six months before they absolutely need to, they'll end up leaving money on the table. Who knows? Maybe they'll do great things in those months and they would have gotten a much higher valuation. This is how startups end up with really short runways.”
“The thing is, funding cycles in Silicon Valley don't care about what's going on inside your company.”
“Don't waste time. If the money's there, take it. Every founder will tell you that the only thing they hate more than hiring is fundraising. It's terrible. It's a long series of no's followed by an eventual yes, maybe. Don't underestimate how hard this will be. When you're getting no after no, you'll feel like the worst person on earth. You're horrible. Your company's horrible. People hate you. That's how bad it feels. So if there's any way for you to kickstart or shorten the process, do it.”