Last yr, I personally paid more in taxes than what I made (!!).

I was completely shocked - I didn't think it was possible to *owe more* than you make. But it is.

To be clear, this post isn't meant to ask for pity, but I think it can help a lot of ppl out.

More >> 1) First, every VC and many bootstrapped startups are advised to set up LLCs.

E.g. LLC for your funds. An LLC for your management co. An LLC really for any partnership. Etc.

We're told this is tax advantageous.

But like everything else, it depends...

Today HR 2799, a legislative bill, has passed the House of Representatives in the US. This bill will have a huge impact on startups and emerging fund managers if it can become a bill.

Who cares and why is this important?

More >> 1) But first, here’s the original source:

financialservices.house.gov/news/documents…

Today’s tweet thread is about VC audits and how they affect startups.

I know…*such an interesting topic*…but actually it’s *extremely important* with the current market for founders.

More here >> 1) First, what is an VC audit?

Many VC firms hire a 3rd party auditor to analyze their funds annually. This gives their investors (LPs) confidence that fraud is not being committed, capital in the fund is being deployed into legit companies, and performance is not fabricated.

End of the week tweet thread on advisory shares in startups. Who should get them? How much? Why? And pitfalls

More >> 1) First, why have an advisor?

Someone
-Has strong domain knowledge to help you level up?
-Can intro to key ppl?
-Can help with distribution?
-Can help with fundraising?

It's been about a year since the markets crashed for startups and VC funds. In the past year, it's been incredibly hard for both funds & startups to raise $$.

I'm no crystal ball, but here's what is happening from my standpoint & where I think the mkts are going.

More >> 1) First, what am I seeing now?

For startups, there are basically 3 categories of companies who need to raise somewhat soon:

-doing great
-doing fine
-doing meh or not good

If you don't need to raise for another yr or more, then you're in good shape.

I've been really distracted today because of some disturbing news.

I just learned in the news that a founder I previously worked closely w (at my last firm) committed fraud and continued the ruse for over *5 years*...(!)

More >> 1) If founders wonder why investor due diligence is so involved, today's case is a great example of why.

I read that this particcular founder fabricated her financial docs AND customer lists to raise millions from investors.

She used the $$ to buy personal things & property.

Recently a portfolio founder told me that he thinks it's best to shut down his company.

After talking with him about his thoughts, I *encouraged* him to do so even though it means we will take a loss on our investment.

Why?

More >> 1) Taking a step back, more than dealflow & more than picking at pre-seed, I truly believe portfolio construction is the #1 thing that allows you to be successful as a startup investor.

It allows you to not be worried about your investing - even during tough times.

Today's thread is about the macroeconomy and how *I think* it will affect startups in 2023.

tl;dr -- if I were running a product startup now, I would basically bootstrap or raise < $100k.

I think the rest of this year will honestly be brutal.

More >> 1) Caveat: I'm no economist. I'm often wrong. VCs swim in lanes they don't understand. So take everything below w a grain of salt.

That being said, my take also is influenced by the thousands of deals we see every month and also what we see in our own our portfolio.

I might be old fashioned - having started my own startup in the last recession when there was no VC funding available.

But I think there are tons of ways to get $$ for your co even if VCs won't invest (even beyond revenue)!

More >> 1) Before diving into ways to get capital, I would really look at your burn rate. Are you focused on *only* the 1 metric that matters?

Everything else that's a nice-to-have should get cut.

I know this is hard - we constantly have to remind ourselves of this @HustleFundVC too.

For the past 3 yrs or so I've started getting a lot of cold-emails - not only from startups - but also from ppl who want to start their own VC funds.

Ppl ask me "how do you successfully raise money for a fund when you don't know who potential LPs even are?"

More >> 1) This all started because I wrote this post about our experience in raising our fund 1.

elizabethyin.com/2018/12/19/how…

We’ve invested in 400+ companies @HustleFundVC & have worked w/ 1000s of founders.

And a lot of founders tend to get bogged down in the weeds w things that seem impt but don’t actually move the needle on the biz…

Some thoughts >> 1) Once you get beyond a couple of ppl, I see founders struggle all the time with:

-prioritization - you could do tons of things but you should just do 1
-getting leverage on their time (i.e. go from IC -> mgr)
-hire & manage well w ltd cash
-raise money beyond the seed

As someone who has worked for big tech (Google) and startups (like my own & @HustleFundVC), I’ve found that startup employees are often wayyyyy scrappier than those at huge corporations.

But there’s one person who comes to mind who bucks this notion completely.

Any guesses ? >> 1) This woman!

Her name is Deb Liu and she’s the CEO of Ancestry.com.

(She’s also speaking at Camp Hustle in a couple of months. And she’s got an amazing story.)

When I first started angel investing, I didn't really know *how* to get into it.

It was kinda scary (I could lose my $$!) & it was unclear what to do or what to look for. How much $$ did I need to have?

Turns out lots of ppl think the same things I did...

Read on >> 1) Most ppl don't think of themselves as angel investors. I certainly didn't for a long time.

Most ppl also think (and I did too) that you needed LOADS of money to be angel investor.

But, then I met all these ppl running around Silicon Valley investing just $1k into companies

If I were running SVB, this is the email that I would send today that we all want to understand:

1) Thank you for all of the support over the years! My name is Tim and [1 line about background - why qualified to run this]

More >> 2) Here’s what’s happening:

A) We changed our position & intend to run SVB beyond the 45 day transition. We will run it: [until a buyer is solidified / forever / for x months to figure things out?]

We appreciate your patience and there is no reason to move your $$ out today.

Now that I’m 5+ years into my journey in running a VC firm, recently, someone asked me what were some of my learnings were.

What did we do right? Where did we flop? In raising our first fund @HustleFundVC

Some thoughts >> 1) One thing I’m proud of is we sought out a lot of advice from others who started before us to get us on the path to doing at least some things right.

@chudson told us “never run out of leads”. So we asked anyone & everyone for 1-2 recs of ppl who may be interested in our fund

Helena Price Hambrecht's (@helena) startup journey is not for the faint of heart.

And on Mar 14, at our SF event, we will host her for our most raw and real conversation to date. Helena will be interviewed by @HustleFundVC GP @ericbahn who was also her investor! 1) By 2022, Helena’s buzzy startup, Haus, became a drinks industry darling, raised $17M, and was gearing up for series A. But when the lead VC pulled out, Helena saw her company shut down, just as it was about to live out her dreams of being sold in bars, restos and retailers.

One of the things that I work with many of my portfolio companies on is storytelling in their pitch decks.

But it can be a frustrating process - even for people who are great at presentations. And here’s why…

Read on >> 1) If you don’t know an investor, you have just 10-30s to make an impression via your deck or blurb.

Most VCs are seeing hundreds or thousands of decks *per month*. @HustleFundVC our startup funnel looks like this:

1000 decks reviewed -> meet ~50-100 -> invest in 7-10 per mo.

Today's tweet thread is about side letters in startup investing.

And, the dirty little secret: side letters literally don't matter (in many cases). 😲

Read on >> 1) What's a side letter? Say you're an investor & you invest $100k into a startup. If it does well, you want the opportunity to to invest a lot more later.

So, in addition to signing a SAFE, you might ask a startup to sign a letter that asks to invest more later.

Valuation of startups is such a mystifying concept and certainly something I didn't understand as a founder. What makes one startup "more valuable" than another?

Today's tweet thread is about the relationship between valuation and milestones.

Read on >> 1) I've written about startup valuations before:

https://twitter.com/dunkhippo33/status/1170848300615909377?s=20&t=CFKmBufwjPpmum_D26AV-Q

Lately, a number of startups and investors have been asking me about M&A and how it works.

Today's post will be from the perspective of the founder and the strategy of running an M&A process.

Some thoughts here >> 1) First, what is M&A?

M&A (mergers & acquisitions) is essentially a way for a startup to find a better home than continuing on as an independent entity.

In the press, M&A is typically celebrated, but in reality most acquisitions are only ok or not great.

Wow, it’s been a while since I’ve done some tweeting here.

I want to candidly talk about what I’ve been up to during the last few wks as a fund mgr.

A thread >> 1) First, disclaimer & to be clear, I LOVE my job, and this isn’t meant to complain at all. But I think it’s illuminating to share openly what has been happening in the startup ecosystem.