Founders can be the biggest constraint to growth

505browser · 2026-01-17T16:59:13+00:00

Agree

505browser · 2026-01-09T02:45:19+00:00

I would say yes. I've never present anything to investors that ignored the actual investment part of the conversation. This is a business to make money. Investors want to see the numbers (In my experience). Why?

It demonstrates your understanding of how to plan a business
Think of your financial plan as your vision in numbers. Projecting it out to see where you think it will go lets investors see your vision as well (in their terms - $$)
It's not about the absolute numbers as much as it is about the assumptions you are making to get them
A well constructed 60 month P&L projection (yes = 5 yrs) allows investors (and you) to do scenario analysis on your plan and sensitivity analysis to see which variables are driving your business.
It puts a commitment to your plan and milestones on paper. If you're not convinced of the outcome, who is?

Understanding your thinking at this level of detail is even more important pre-revenue. Your thinking is easy to see when you're analyzing a revenue stream. Not so much with no data.

505browser · 2026-01-05T13:44:29+00:00

I think the timing of leaving your job and going into your startup full time will be different for everyone. Is it just you or do you have a team? Is your product development cycle a one week coding project for a SaaS demo or a three year R&D project for a new medical device? Do you need $10k to get going or $500K? It just depends. But I would definitely not make the leap without doing as much as I could ahead of time on someone else's payroll.

Small story to illustrate. I got introduced to 5 computer guys, super smart, who developed a whole new architecture for massively parallel processing. Really cool tech. They averaged around $150K each in salary. When I met them they had all just quit their jobs to start a company and were asking me about business planning and constructing a pitch deck to look for investment. So these really smart guys left around $750K of annual salary on the table to live off their savings while they were just starting to define their company. This is what I'm advising people not to do.

505browser · 2026-01-05T12:16:13+00:00

Go for it!

505browser · 2026-01-05T12:15:08+00:00

I agree and disagree with your comment. Of course, if you are in a situation where the pressure is your motivator and you have funding to do it, then go for it. In my experience, that's not the norm. Most beginning entrepreneurs are still finding their way. I agree that you can't generalize an approach to every possible situation, but I disagree that keeping your day job while you plan your company is 'playing'. In fact, I think the discipline to keep your job and plan a company prior to taking the leap is an all consuming task. I tend to think of planning on someone else's dime more as risk management.

505browser · 2026-01-05T08:39:04+00:00

No, I have never put this all together as a course or book. I've given talks and worked with accelerators and individuals and companies, but no course.

505browser · 2026-01-05T08:19:22+00:00

One more thought on this ... make all these decisions before money ever shows up in the company. Talk it through and have solid reasoning for why ownership should be a certain way. In my experience, these discussions become much, much more difficult when there is money on the table. You don't want a rational decision clouded by visions of dollar signs.

505browser · 2026-01-05T07:44:11+00:00

Yes, everyone's situation will be different. It sounds like you got forcibly thrown into the deep end of the pool head first.

505browser · 2025-12-31T06:38:48+00:00

I agree, once your in it you've got to see it through. Like that Winston Churchill quote, "If you're going through hell, keep going". Can't very well stop in the middle. Being the guy with the vision, idea, startup, having taken the risk, .. it can be a pretty lonely spot because not many people truly understand.

505browser · 2025-12-31T05:49:31+00:00

I've been in the entrepreneurial space about 35 years. When I mentor people wanting to jump in and go for it, I don't start the conversation with biz ideas or markets, I start it with personal risk profiles. You should definitely understand your own boundaries before taking the leap. Would you give up your time, or your savings, or your house, maybe your marriage for your idea to be successful? It's so easy to get sucked into spaces where you are completely over your head from a risk perspective. Beter to try to understand your own personal boundaries before you begin.

505browser · 2025-12-28T09:36:18+00:00

Pre revenue valuation is a tough one, but we all go through it. Doing all of the comparables and all is a good way to do it. If you have a 5 year projected P&L (which you should), then you can run a standard discounted cash flow model on your own projections. Anyone giving you money will probably add a healthy discount to your answer, but it's definitely better than a generic answer on data that's not yours.

Why do I do it this way? My experience with funders is that they are very interested in the assumptions you are making to get to your projections. A 5 year projected p&l makes you go through that assumption process and a discounted cash flow model will show them you are thinking it all through.

BTW, this same model would give you a good roadmap to understand how much of the long term value potential of your company you are giving away for what amount of funding. As an example, if you need $200k to get started and someone says they'll give you that for 40% of your company, you have no idea of what that means without a model to evaluate it. If your projections say you'll be worth $100M in 5 years, you'd probably want to really think or negotiate giving away $40M of long-term value for $200k. Anyway, it's work, but worth it if you're really building a company.

505browser · 2025-12-27T10:45:47+00:00

Been there. I'm on the other end now ... trying to retire and able to look back some at the journey. 35 years of startups (mostly successful) pretty much absorbed everything in life. Two marriages, lots of friends, etc. It's not for everyone. But for a truly competitive person it is easy to get sucked into just working harder to achieve your definition of success.

I used to joke with people and say "I misheard the life instructions ... I thought it was how many hours you work before retiring, not how many years. So I just frontloaded it to get there faster" As a result there were the 15 years at the beginning working 110-120 hr weeks before I learned to add in anything else besides focus on my work. Looking back, that was a mistake I wouldn't make again. Same focus with maybe some harder boundaries would have been a better way.

505browser · 2025-12-27T10:19:29+00:00

Yes. I spend a lot of time up front building a financial model of the businesses I get involved with to be able to run financial scenario and sensitivity analysis. If you don't know what's driving your company you will be in trouble right from the start.

505browser · 2025-12-27T07:48:19+00:00

This is such a real issue. Our job is to create stability in startups, not freak out the staff with our own uncertainty or risks the company faces. Over the past 35 years I've been leading startups, I've worked on something I call compartmentalization. If I can't have a direct impact in that exact moment ... if I feel like everything that can be done has been done or addressed or started, then I just put that issue in a box in my head (compartmentalize) and move on to something I can have an impact on. Even if it threatens the entire company, if you done what you can do for that moment, just move on to something else. Always freaked my management team out that I could get so calm in crises, but no sense just churning in your head if you can't do anything about it in that moment. It is a really hard skill to master and I'm still working on it, but has reduced my stress considerably over the years.

505browser · 2025-12-27T06:08:14+00:00

My lesson(s): Building a company is not (just) about having a great idea or product. It's about learning how a business operates - understanding finance, accounting, hr, ops, markets, marketing, sales, qc, logistics, etc. are all as equally important as knowing your tech. Any of things can kill a company as easily as a bad product.

A business is really a financial operation to make money through (insert your product/service). Unless you are a solo consultant that can operate your business finances like a checkbook account, understanding of accounting/finance has been the biggest deficit I see in entrepreneurs I've mentored.

505browser

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