Operations

We can all agree that first impressions are important. Whether we like it or not, our first interactions with someone, often set the tone for the duration of the relationship. This holds true when it comes to welcoming a new company into your fund’s portfolio as well. This is why it’s important for Venture Capital Platforms to provide new portfolio companies with an organized, well-thought-out, first impression to their post-investment support resources. This will help with company <> Platform engagement and is an opportunity to live up to your fund’s brand promise. If you’re looking to improve your onboarding experience for new companies, check out the resources and templates in this guide to get started. This guide covers the following: 1) Sending your initial welcome email 2) Setting up your first introductory meeting 3) Sending out thoughtful swag 4) Integrating founders into your community 5) Scheduling a follow-up meeting Related Resources: How to Hire Your First VC Platform Role Portfolio Data Collection Tips Visible for Investors is a founder-friendly portfolio monitoring and reporting platform. Schedule time with our team to learn more.

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. Building a startup is difficult. Being a founder can almost feel impossible. There are very few people that have been in the shoes of a startup founder. This means that there are very few people that know the difficulties that come along with building and leading a startup. As a startup founder, you are responsible for hiring and retaining employees, securing capital, developing a product, building culture, and more. Chances are you haven’t lead all of those things in the past. Because of this it is important for you to look to the founders and leaders that have been there before to uncover advice. Related Resource: 7 Essential Business Startup Resources Check out our 15 helpful tips for startup success below: 1) Be Persistent Leading a startup is full of ups and downs. Inevitably, things will not go as planned and will feel like everything is headed in the wrong direction. Paul Graham, Founder of YC, coined the term “trough of sorrow” to explain when your startup loses momentum and feels like things are all headed in the wrong direction. In order to navigate troughs of sorrow and down periods, startup founders need to stay persistent. You’ll need to focus on what truly matters to your business and stay the course. Related Resource: The 23 Best Books for Startup Founders at Any Stage 2) Always Be Solution Focused As we’ve alluded to earlier, founders are pulled in a hundred different directions. — whether it be with hiring, fundraising, or developing a product. It is easy to get distracted and spend your time (and your team’s time) working on projects or initiatives that are not core to your business. As a startup founder, it is important to stay focused on your solution and the problem you are solving. As Kyle Wong, the CEO of Pixlee, puts it, “Having a product that does a lot of things but doesn’t do anything well is useless. Your goal should be to definitively say that your product is the best at doing X for market Y. You should ask yourself, “Which customers do I care most about, and what can I do to make their experience better?” Determine what your company is uniquely good at and stay focused on that solution. 3) Invest in Yourself When managing a team, it can be difficult to put yourself aside and continue to invest in the team members around you. As a startup founder, it is important that you take the time and resources necessary to invest in yourself. This will differ from founder to founder depending on they do this. For some it might be setting time off from work to hone other skills, attending leadership conferences, etc. 4) Execution, Execution, Execution Forecasting growth and building a product roadmap is a task in itself. Executing those plans and roadmaps is vital, and difficult. In order for a startup to succeed, the leadership team needs to be focused on execution from day to day to make sure everyone is headed in the same direction. As the team at Basis Set Ventures puts it, “Execution is the only aspect that is consistently correlated with startup success. Across all archetypes, day-to-day effectiveness and whether the founder learns and adapts quickly are most correlated with success.” Check out the image from their Founder Superpowers report below: 5) Focus on Results Going hand in hand with execution is the ability to focus on results. It can be easy to get consumed by the inputs, but if the results are not there it is important to quickly pivot and try inputs and strategies that show real results. Because most startups have a limited runway (cash) it is important to move quickly and stay rallied behind results. If you find a marketing or acquisition channel is not moving the needle, it is important to quickly cut that channel and focus on what is driving results. 6) Build a Reliable Network The startup world is a tight-knit community. Different VC funds and corporations have made it incredibly easy for founders and startup employees to network and help one another. Having a reliable network is a great way to help in all aspects of business building. Connections will be able to make introductions to potential investors, ideal customers, and job candidates. It is important to be thoughtful about the relationships you are building and focus on building trust before pursuing business interests. As the team at Hustle Fund wrote, “Networking wasn’t about going to a bunch of conferences and exchanging business cards. Networking is simply about making friends.” 7) Protect Your Equity Equity is the most expensive asset a startup founder has. It is important to protect and manage your equity accordingly. At Visible, we believe that startup leaders should have dedicated tools for managing their equity — just as sales and marketing teams have dedicated tools to manage their day-to-day. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. 8) Become a Storyteller Storytelling is a crucial part of building a successful startup. Sure there are more important aspects of business building but being a great storyteller will help immensely with fundraising, hiring, and messaging. As Steve Jobs puts it, “The most powerful person in the world is the storyteller. The storyteller sets the vision, values, and agenda of an entire generation to come.” Kristian Andersen of High Alpha joined us to discuss how founders can leverage storytelling to craft their pitch deck for successful fundraise. Learn more here or check out a snippet below: 9) Embrace the Journey Building a startup is a journey. As we mentioned previously, there are many ups and downs when it comes to building a startup. While it can be easy to stay focused on the day-to-day it is important to take a step back and look at the journey. It is easy to focus on the lows but is rewarding to allow yourself and your team to celebrate the wins. 10) Don’t Let Yourself Get Burned Out Building a successful startup requires solving a lot of difficult problems. At times it might feel like you are banging your head against the wall. It is easy to get consumed by a problem and put everything you have into solving it day after day. However, this can lead to burnout and cost you, and your team, in the long run. In order to avoid burnout, it is important to make yourself, especially your physical and mental health, a priority. Learn more below. 11) Make Physical and Mental Health a Priority Launching a startup is an exhausting job and can take a toll on a founder’s physical and mental health. As the team at Starting Line VC puts it, “Building a startup is an exhausting process. It is terrifying, stressful, and confusing. It can also be exhilarating. The highs are higher than any other feeling; the lows depress similarly. As a founder remarked to us recently, “my mood is dictated daily by the performance of our Shopify revenue. If not managed and balanced, these volatile emotions can become unhealthy. Worse, they can affect performance.” Learn more about managing your physical and mental health with Ezra Galston of Starting Line Ventures here. 12) Strategically Plan Out Every Work Day If you’ve been following along, you have probably noticed that focus is a core aspect of startup success. Focus in everything from product development to your daily routine can help a company succeed. By having a strategic plan for each workday, you’ll be able to maintain that focus on the big problems you are solving. Of course, there is no one size fits all strategy to planning out a work day. Find what works best for you and stick to it. 13) Make Different Mistakes Things never go as planned when building a startup. Mistakes are inevitable. The only thing you can do is learn from your previous mistakes and do your best to make them again. Mistakes are a great way to learn, especially as an early stage startup. You can’t let the mistakes weigh you down and have to be viewed as a learning opportunity that won’t happen again. 14) Progress Not Perfection Many times it can be intimidating to put a product, pitch deck, email, blog post, etc. out before it is perfect. However, most startups are strapped for cash and need to balance speed with perfection. Of course, it would be ideal to have every aspect of your product be perfect, but that is not realistic. One of the differentiators of a startup is the ability to move quickly. In order to do so, you need to focus on the progress. Finding the right balance of progress and perfection is key to moving efficiently. 15) Know Your Customers Without customers, a business fails to exist. Having a voice of your customers and a true understanding of their needs is a surefire way to make sure you are building the right product, sending the right message, and hiring the right team members. In order to know your customers, you need to take the time to understand their needs and build relationships with individuals. Building relationships with customers will also reduce the likelihood of churn. Chances are your customers are working through the same things as you and will understand what you are going through. Scott Dorsey of High Alpha stresses that founders should be close to their customers than ever before when working through tough times. From our post, 4 Takeaways From Our Webinar with Scott Dorsey, “During uncertain times, it is more important than ever to be close to your customers. Your customers are going through the same things that you are going through. Establish and preserve your relationship so you can grow together on the other side of the downturn.” Learn Everything You Need to Know About Funding With Visible Boiling down what it takes to build a successful startup into 15 tips is unrealistic. Some things may work for one company and not the other. The only way to truly understand what works for you and your business is by getting out there and doing it. At Visible, we want to be there along the way to help you with all things related to fundraising, investor relations, and metric tracking. Learn more about how we can help with your fundraising efforts here. Related resource: Strategic Pivots in Startups: Deciding When, Understanding Why, and Executing How

Kingsley Advani is a British investor who started investing in 2013 and turned $34k in savings into ~$100m in private investments. Since then he’s co-founded an angel group with 1,000+ investors and founded a private markets platform, Allocations. Kingsley is joining Visible.vc to discuss the benefits of creating a hybrid SPV + fund strategy. Kingsley Advani, Founder and CEO of Allocations joined us to discuss trends in SPV investing and the benefits of raising SPV’s for VC fund managers. In this webinar recording, you can expect to learn: SPV Overview (what are they, how did they become popular) Kingsley’s perspective on the ‘Why Now’ for SPV’s 5 Benefits of Creating a Hybrid SPV + Fund Strategy Demo of Creating an SPV in Allocations Using Visible for SPV + Fund Reporting

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. The way startups build and innovate changes every year. If you look back at just 20 years, 10 years, or 5 even years ago – the way startups work and innovate has dramatically changed. As the way startups innovate changes so do the tools and resources available to startups. Over the last 2 or 3 decades, SaaS (software as a service) products have continued to grow and take over the technology landscape. Related Resource: The SaaS Business Model: How and Why it Works Learn more about SaaS products and how they can build your business below: What are SaaS products? SaaS is short for software as a service. Salesforce, oftentimes considered one of the original SaaS companies, explains it as, “Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management. SaaS applications are sometimes called Web-based software, on-demand software, or hosted software. Whatever the name, SaaS applications run on a SaaS provider’s servers. The provider manages access to the application, including security, availability, and performance.” Before SaaS products, it required companies to buy expensive hardware and have a physical location for employees to access their software. With SaaS products, any employee with internet can access their software from anywhere in the world. Related Resource: 20 Best SaaS Tools for Startups Learn more about the benefits and types of SaaS products below: Why should startups use SaaS products? At this point, it is assumed that most, if not all, startups are leveraging SaaS products to build their company. SaaS products enable employees to access their software and tools from anywhere across the globe. Because of this it enables remote work and allows startups to hire the best talent anywhere on the planet. Additionally, SaaS products are robust and can be tailored to just about any business. This allows teams to build, communicate, and automate quicker than ever before. It also allows for teams to get set up and use a new tool quickly — in the past, this would be a long process that could take months but now can be solved in a quick onboarding or upload. Learn more about the specific benefits of leveraging SaaS products for your business below: Benefits of SaaS products We’ve alluded to the benefits of SaaS products throughout this post but there are a few key benefits that are especially worth mentioning: Save time with automation One of the biggest benefits of SaaS products is pure time save. Software products can take manual tasks and turn them into an automated process that can save countless hours. Cost efficiency Another major benefit of SaaS products is cost efficiency. Most SaaS products offer tiered pricing and annual discounts that can lead to huge cost savings for startups. As more startups implement SaaS tools the pricing and plans have evolved to help scale with companies as they grow. Easy integration Another benefit of the explosion in SaaS products is the integrations and the ease to set them up. Most companies will have a somewhat similar tech stack so there are natural integrations that have evolved that will help startups connect existing tools and automate even more processes. You can also check out tools like Zapier that help connect SaaS products. Remote work SaaS products only require access to the internet. Because of this, employees can work from anywhere. This might help enable a remote or hybrid work environment and allow employees to work from home or on the fly. Top SaaS Products for Startups As we’ve continued to mention, SaaS products and companies have exploded over the last few decades. Because of this, there are thousands of SaaS solutions to help common business problems. Learn more about some of the top and most popular SaaS products below: Team collaboration As more tools move to the internet, being able to collaborate with colleagues is a must. Team members need a place where they can comment, plan, and collaborate on ongoing projects. Team collaboration tools can be fully dedicated or built into existing tools (e.g. leaving comments on a Google Doc). Learn more about some of the popular team collaboration tools and resources below: Google Drive Notion Slack Project Management Going hand in hand with team collaboration tools are project management tools. Project management tools stay on top of any ongoing projects within your team. These tools are incredibly valuable in every aspect of the business building but especially when it comes to marketing and product teams. Marketing teams can use project management tools to stay on top of their marketing campaigns and efforts — for example, tracking everything from initial copy and inspiration to performance and tweaks. For product teams, project management is extremely important because it keeps the team on the same page throughout the development process. Learn more about some of the most popular project management tools below: Basecamp Notion Asana Marketing and social media A marketing and social media tool is table stakes for most startups. Email marketing, blogs, videos, social media, etc. make up most modern-day marketing tools. Having a place to manage and publish your different marketing efforts is a must. There are some tools that cover every aspect of marketing. On the other hand, there are dedicated tools that will help in specific areas of marketing (e.g. Buffer for social media posting). Learn more about popular marketing and social media tools below: HubSpot Sprout Social Buffer Hoot Suite Accounting Accounting and bookkeeping is another area that has been improved by software products. Accounting tools allow individuals that might not be an expert in accounting to get a good understanding of their financials. On the other hand, accounting tools can also be built out and robust enough for finance professionals. Learn more about popular accounting software below: Xero Quickbooks Online FreshBooks Customer Service As your company grows staying on top of your customer service is a must. Luckily there are hundreds of software tools dedicated to helping with customer service. Like marketing tools, there are some that will cover every aspect of customer service. There are also dedicated tools that will help with different aspects of your customer success efforts — e.g. knowledge base, email support, etc. Learn more about popular customer service tools below: Intercom HubSpot Front Customer relationship management Customer relationship management (or CRM) has turned into a must for most startups. CRMs are the hubs for managing communication and progress with current and potential investors. Customer relationship management tools generally offer add-ons and additional features that will help with other areas of your business. This can be helpful when it comes to cutting costs and finding a simple solution for your employees. Related Resource: 7 Essential Business Startup Resources Learn more about popular CRMs below: Salesforce HubSpot Pipedrive Content management system As software and tools have moved to the internet so have most businesses in general. Even if a business does not sell to customers directly via the internet, chances are they have a website. Having a place to manage your website and the content you are producing is a must. Content management systems (CMS) have become table stakes for any business that has a website and produces any level of content. Learn more about popular content management systems below: WordPress Webflow Contentful Human resources management As a startup founder, it is vital to stay on top of your employees and team members. Startups are in constant competition for both capital and talent. It is crucial to have a human resources management system in place to keep employees happy and supportive. Learn more about popular HR resources below: Gusto Zenefits Lattice Payroll and benefits As we mentioned above, startups need a system to engage with their employees. One of the aspects of successful employee onboarding is having tools in place to help with payroll and managing benefits. As SaaS payroll and benefits tools have become increasingly common, the options are countless. Learn more about popular payroll and benefits tools below: Gusto Zenefits Onpay Investor relationship management Startups are in constant competition for 2 resources — capital and talent. Having a game plan in place to attract both is vital. If you’re a startup that has taken on outside funding it is important to have a game plan in place to report and communicate with your investors. This will not only improve your odds of raising follow-on funding but will allow you to lean on investors for help with hiring, strategy, and more. Investor relationships and communication are our bread and butter at Visible. Related Resources: The Understandable Guide to Startup Funding Stages Valuing Startups: 10 Popular Methods 23 Top VC Investors Actively Funding SaaS Startups Boost your startup’s investor relations with Visible Adopting SaaS tools for your startup is a surefire way to build efficiency around every aspect of your business. In order to best tap into your investors, you need a tool in place to communicate and report to your investors. Give Visible a try to up your investor relations. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

About Trey Trey Closson is the CEO and Founder of Amplio — a platform for proactively identifying the risks of tomorrow’s supply chain. Prior to starting Amplio, Trey spent time at Flexport and Georgia Pacific. Trey joins us to break down his first year as a founder and what he has learned from transitioning from operator to founder. Episode Takeaways A couple of key topics we hit on: The current state of the global supply chain issues How Amplio found their first customers How Amplio is using pilot programs to scale their customer base The importance of relentless focus Why founders should invest in community Why building a startup is a marathon, not a sprint Watch the Episode Give episode 6 a listen below (or give it a listen on Spotify, Apple Podcasts, or wherever you normally consume podcasts)

Startups and founders are faced with countless challenges and decisions on a daily basis. Many might be small challenges that can be solved personally but there are always larger decisions and challenges looming that require the help of a lawyer or law firm. In order to better help you choose the right law firm for your startup, we put together some tips, advice, and a few actual firms dedicated to helping startups below. As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm. Why It’s Important to Be Selective About Your Law Firm Unfortunately, there is more to building startups than building a product and taking it to market. Along the way, there are events, situations, and decisions filled with legalese that requires the help of a lawyer or law firm. While it might be tempting to get going with the first law firm you speak with, they ultimately will be a partner to your business and should require some selectivity. So what areas will you likely need a hand with from your future law firm? As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm. 1. Incorporation Incorporating your startup is an early step in the startup journey. As put at the team at Startup Savant, “Incorporating your startup means establishing your business as a formal legal entity, separate from its founders or owners.” To help with this legal process, you’ll want to make sure you have legal representation to help throughout the process. As written by the team at Contracts Counsel, “A partnership agreement lawyer assists members of a partnership to decide on a business structure through drafting a legal document. Partnership agreement lawyers essentially help businesses craft partnership agreements that reflect the relationship.” 2. Partnership agreements Another early technicality of building a startup is the partnerships and agreements that come with it. 3. Employment Issues Inevitably throughout the life of building a business, employment issues will arise. In order to make sure everyone involved is covered it might make sense to bring in legal help. 4. Protecting your Idea Law firms are also a great way to protect any original ideas or products. This can include trademarks, patents, copyright protection, and more. 5. Protecting your Brand’s Identity Going hand in hand with protecting ideas is protecting your brand’s identity. As the team at HG.org puts it, “Another manner of protecting the ideas of the creator is through a trademark. These may be but are not required to be registered through the United States Patent and Trademark Office. There are benefits when this is completed, but the trademark itself protects the image or brand of a company or owner.” 6. Generating Website Documents and Dealing with Data Privacy Issues As internet regulation continues to change and mature so do the documents and data that deal with privacy issues. As companies have been impacted by GDPR, legal documentation and privacy issues are a standard. Lawyers are a great source to help here. 7. Issuing Stock to Co-Founders When working with cap tables and issuing stock and stock options to co-founders and employees, seeking a lawyer’s help is inevitable. Related Resource: Employee Stock Options Guide for Startups 8. Complying with SEC Regulations When working in the US, startups, and companies are subject to regulations from the SEC. Working with a law firm can be a great source to make sure you are compliant. Related Resource: 6 Components of a VC Startup Term Sheet (Template Included) 9. Financing your Business There is a growing interest amongst law firms to invest in their clients. This has the chance to help fuel growth for your business but can also change the relationship with your law firm. What to Look for In A Startup Law Firm When it comes down to looking for your specific law firm there are certainly questions and thoughts to keep in mind. Before even taking a meeting with a potential law firm, ask yourself the following questions. While you might not be able to answer them fully before speaking with them, you should have a strong understanding and can spend your time meeting with them to focus on the fine details. As always, we recommend speaking with your peers, mentors, board members, general counsel, and others when making the decision to bring on a contractor, partner, or law firm. Do they have startup experience? There are countless types of law firms that all specialize in different areas. Even within business, there are law firms that will hone in on different aspects. Make sure you are communicating and working with law firms that understand the mechanics of startups and have done it before. What does their scope of work look like? Working with a law firm is another relationship and partner for you and your business to take on. Be sure you understand how they communicate, their standards, and more before hiring a firm. Talking to current and past clients of theirs is a great way to verify their scope of work. Do they have valuable startup connections? If you are hiring a law firm that specializes in the startup world, chances are they have connections to other startups and partners in the space. Determine their willingness to make connections and consider if that is something you are looking for in a law firm. Is the cost in-line with your budget? Simply put, are they affordable? Law firms come in all shapes and sizes. It can be a considerable expense for your business so make sure they align with your budget and goals. Do you share similar values and/or culture? As we’ve alluded to previously, adding a law firm is adding a partner to your business. Making sure there is a chemistry and match in your values/culture is a great way to ensure a strong relationship. Related Resource: A User-Friendly Guide to Startup Accounting Great Startup Law Firms to Consider As always, we recommend speaking with your peers, mentors, board members, and others when making the decision to bring on a contractor, partner, or law firm. However, we have laid out a few law firms below that specialize in working with startups: Cooley Cooley is a startup-focused law firm based out of Palo Alto. As the team at Firsthand puts it, “The go-to firm for startups and early-stage companies, Cooley is ideal for those seeking cutting-edge work with innovative clients. The firm has a highly social culture that will no doubt appeal to affable personalities and boasts a strong commitment to diversity and inclusion. With more than 1,200 lawyers practicing across the U.S., Europe, and Asia, Cooley is synonymous with tech and venture capital work. The firm is also well regarded for its cleantech, cyber/data/privacy, IP, M&A, private equity, and securities practices.” Learn more here. Related Resource: Private Equity vs Venture Capital: Critical Differences Fenwick Fenwick has offices across the United States and has built a name for itself by working with high-profile technology companies and startups. Fenwick features a startup resources section on their website and takes a founder’s first approach. Learn more here. Gunderson Dettmer As put by the team at NYC Founder Guide, “Six years in a row, Pitchbook has ranked this firm #1 for high-growth technology and life sciences companies and investors globally. With a singular focus on startups and emerging companies, they are recognized as one of the most active law firms in the VC market, and in 2019, they closed $18+ billion of venture capital private financings. Startups they’ve worked with include Harry’s, Vimeo, Skillshare, and Oscar.” Learn more here. Goodwin From their website, “We are a global law firm with a history of working on groundbreaking matters, and an increasingly focused approach to working with clients in the financial, private equity, real estate, technology and life sciences industries. Our more than 1,800 corporate and litigation lawyers leverage their specific experience and assemble full-service teams to advise clients in these and adjacent industries.” Learn more here. Keep Investors Up-To-Date with Visible Getting in the habit of sending monthly investor updates is a surefire way to help with fundraising, hiring, and growing. To get started, pick a template from our library and tailor it to your business. Just remember that at the end of the day, sending anything is better than sending nothing at all. Visible allows founders to update investors, track key metrics, and raise capital all from one platform. Try Visible for free to send your next investor update.

About Matt & Zach Matt Achariam and Zach Hamed are the Co-founders of Clay. Clay is a beautiful and private home for all your relationships. Populated from the ground up using your calendar and social history, Clay is the most stunning, powerful way to remember who you’ve met—and what matters to them. Episode Takeaways Matt and Zach joined us for season 3 of the Founders Forward Podcast to share their stories. Clay has scaled rapidly and has raised capital from the likes of Forerunner Ventures and General Catalyst. They join us to break down: How they acquired their first customers Why they manually onboarded their first users Why they focus on the problem to better build product Why founders should stop overthinking outreach The importance of empathy in the startup world Why you should compliment more people A relationship-based approach to fundraising Related Resource: Investor Outreach Strategy: 9 Step Guide Watch the Episode Give episode 3 a listen below (or give it a listen on Spotify, Apple Podcasts, or wherever you normally consume podcasts)

About Yaw Yaw Aning is the CEO and Founder of Malomo. Malomo is a shipment tracking platform that helps eCommerce brands turn order tracking from a cost center into a profitable marketing channel. Episode Takeaways Yaw joined us for season 3, episode 2 of our Founders Forward Podcast to dive into his career as a founder. He started his career in consulting which eventually led him to founding Malomo. Since founding Malomo, the team has rapidly grown and they’ve raised $8M+. Before ever thinking about funding, Yaw and the team had to determine what problems they were going to solve and did everything in their power to find their first customers. Yaw joins us to break down: How Malomo found their first customers The importance of finding a co-founder How and why you need to solve customer’s problems How Yaw found his co-founder The importance of being able to shut down How to prioritize time Watch the Episode Give episode 2 with Yaw Aning a listen below (or give it a listen on Spotify, Apple Podcasts, or wherever you normally consume podcasts) The Founders Forward is Produced by Visible Our platforms helps thousands of founders update investors, track key metrics, and raise capital. Try Visible free for 14 days.

Hiring and attracting top talent is a major responsibility of any startup founder. In order to compete with large corporations, startups oftentimes have to get creative to attract top talent. One of the top benefits a startup can offer is employee stock options. This gives an employee potential upside and ultimately aligns both parties. There are two major forms of stock options — NSOs (non-qualified stock options) and ISOs (qualified incentive stock options). How do you know what type of stock options to use for your company? Check out our breakdown of both ISOs and NSOs below: Note: We always recommend seeking advice from lawyers or councils when working with your equity. What Are Qualified Incentive Stock Options or ISOs? As put by the team at Investopedia, “An incentive stock option (ISO) is a corporate benefit that gives an employee the right to buy shares of company stock at a discounted price with the added benefit of possible tax breaks on the profit. The profit on qualified ISOs is usually taxed at the capital gains rate, not the higher rate for ordinary income. Non-qualified stock options (NSOs) are taxed as ordinary income.” The main difference between ISOs and NSOs are the tax structure and possible benefits. Traditionally, ISOs are awarded to high-value employees. How Are ISOs Taxed? As mentioned above, ISOs are taxed at the capital gains rate. This means that ISO holders are subject to tax benefits as the capital gains rate is generally lower than the ordinary income rate. It is worth noting that ISOs are taxed at the time of selling the stock (not when vesting or exercising). When an employee (or person) is granted sock options there is a strike price (which is the value at the time of granting). Once an employee decides to exercise their options, they have the ability to sell their stock or hold on to the stock. If the same person sells their stock at (the fair market value) at a later date the difference between the strike price and fair market value is the profit — or what the employee is taxed on. Check out the long-term capital gains tax rates in 2022 (for the US) below: Learn more about other tax implications and the alternative minimum tax (AMT) in our next section. The Impact AMT Has on ISOs According to the IRS, “The alternative minimum tax (AMT) applies to taxpayers with high economic income by setting a limit on those benefits. It helps to ensure that those taxpayers pay at least a minimum amount of tax.” So what does this mean for ISOs? While very rare and generally reserved for high-earning individuals, the AMT can be triggered if the profile from selling ISOs is large enough. This means that the stock seller will be subject to more taxes and negate some of the benefits of an ISO. What Are Non-Qualified Stock Options or NSOs On the flip side are non-qualified stock options (NSOs). As put by the team at Investopedia, “A non-qualified stock option (NSO) is a type of employee stock option wherein you pay ordinary income tax on the difference between the grant price and the price at which you exercise the option.” NSOs are generally more common than ISOs. While they might not have the tax benefits of ISOs, NSOs are generally more common than ISOs and offer their own benefits. It is worth noting that NSOs can be granted to non-employees as well (board members, advisors, mentors, customers, etc.) Learn more about NSOs and their tax structure below: How Are NSOs Taxed? The main difference between NSOs and ISOs comes down to how they are taxed. If you recall, ISOs are only taxed at the capital gains tax when they are sold. NSOs can potentially be taxed on two occasions. To start, NSOs are taxed when the stock options are initially exercised. If/when someone decides to exercise their NSOs they will pay a tax on the difference between the fair market value and the strike price. Next, NSOs are taxed when someone sells the actual stock — similar to ISOs. Depending on how long someone holds their stock between the time they exercise it and sell it, will determine if they pay short term or long term capital gains tax. The Impact AMT has on NSOs As we mentioned earlier, an alternative tax minimum (AMT) is a potential downside of ISOs. Unlike their counterpart, NSOs are not subject to AMT. ISO vs NSO Which One is Right For You? Now that we understand the difference between qualified incentive stock options (ISOs) and non-qualified incentive stock options (NSOs) it is time to understand how and when you should be using both. Both have expected use cases and their own set of pros and cons depending on the use. Related Reading: How to Fairly Split Startup Equity with Founders When to Choose an ISO Of course, most employees will likely want an ISO plan as it offers tax benefits. However, it is lesser used and should be reserved for high-value employees. As the team at Investopedia writes, “This type of employee stock purchase plan is intended to retain key employees or managers.” A few times for when you should choose a qualified incentive stock option for your employees: When offering stock options for an employee (ISOs are not eligible with individuals who are not employees) When trying to incentivize and retain a high-value employee — this might be a manager or executive that is closely aligned with your companies success. When your company is in a financial position to offer ISOs instead of NSOs When to Choose an NSO While they do not necessarily have the tax benefits of ISOs, NSOs are widely used and are more common than ISOs. Below are a few examples and pros of choosing an NSO instead of an ISO: When issuing stock options to non-employees. This could be consultants, board members, mentors, and more. From the team at Pasquesi Partners, “With NSO, companies are able to take tax deductions when the employee chooses to exercise their option in the stock. Because of the way they are structured, NSO earnings are viewed as income for the employee, hence the tax deductions.” When looking for a more simple option and straightforward stock option to offer employees Share Stock Option Information With Your Investors with Visible No matter how you structure your cap table and share equity with investors, employees, and more, it is important to be straightforward and transparent the entire time. Want to improve your investor reporting and communication? Let us help. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

We surveyed founders in our community and asked, “How likely are you to refer your current lead investor(s) to fellow founders?” (AKA — NPS score). The results were shocking with an NPS score of 23. An NPS score of 23 falls below the average for the airline industry. Not a great industry to be compared to in terms of customer satisfaction scores. As the venture space continues to grow and mature, the importance of investor’s adding value and opportunities is higher than ever. In order to better help investors support their portfolio (and hopefully move that NPS score up) we’ve put together 3 tips below: Systemize your data collection As Peter Drucker put it, “if you can’t measure it, you can’t improve it.” In order to best help the founders in your portfolio, you need to have a system in place to collect data, quantitative and qualitative, so you can jump in and help when needed. Setting up a system requires a fine balance between being beneficial for your fund and being efficient and easy on the founder. With that said, it is important you only collect what is absolutely necessary (for founders who are already taking the time to send investor updates you want to make sure they are not duplicating efforts). What we suggest requesting from a founder to start: With Visible for Investors, founders can fill out simple Update Requests from their investors (like the example above) and use their data to fuel future investor Updates. Learn more about Visible for Investors here. Take action on the data Collecting portfolio company data is only half the battle. Once you have the data in hand (qualitative or quantitative) you need to make sure you are closing the loop. Keep an eye on qualitative data As we displayed in our example request above, best-in-class investors are specifically requesting a “Where can we help/problems” section. Being sure you can track and manage this data over time will improve your ability to take action. By setting up a view in Visible or exporting answered requests, you can keep your eye on where your companies stand and where your help is needed. Metric alerts and benchmarking When collecting metrics and data from your companies on a recurring basis, you’ll be able to uncover trends for individual companies and your portfolio as a whole. If you notice a core metric for a specific company is slipping month over month, it might be a good time to intervene and see if they need a hand to tackle a problem. Fundraising and Introductions Startups are in constant competition for 2 resources — capital and talent. As an investor, you will oftentimes see founders need help with 1 (or both) of those 2 areas. Being able to make an introduction to a potential investor or new hire can have a huge impact on a startup’s growth. Being able to open up your rolodex will be a huge win in the eyes of your founders. On the flip side, you can use the data from your portfolio as a whole to help benchmark and uncover new trends to the rest of your portfolio. For example, if you see a go-to-market strategy picking up steam with a few companies, it can be a good time to introduce the ideas to other companies that might benefit from the strategy. Learn more about how you can use Visible for Investors to better support your portfolio companies here. Make the most of it Setting up a system to collect data from your portfolio companies is no easy feat so you’ll want to make sure you are getting the most value out of the data as possible. Outside of helping your portfolio companies, you do have your own set of investors you need to report to. Having a strong system to collect portfolio data is a natural backbone to power your next LP report. Building strong rapport with your LPs is a surefire way to make sure your next fundraise goes smoothly. Using Visible, you can roll up your data and use Updates to report to your LPs. No exporting or additional data needed. Simply take the data from your portfolio, add in any necessary fund/investment data, and keep your LPs in the loop. Check out an example report here. Check out more LP update templates here. Learn more about using Visible for Investors to report with your LPs here. Stay engaged with your founders right from your pocket. Monitor your portfolio and be the value-add investor you want to be with Visible for Investors. Schedule a demo to learn more here.

On episode 7 of the Founders Forward Podcast, we welcome Kristian Andersen. Kristian is a founder and partner at High Alpha, a venture studio located in Indianapolis. About Kristian Before launching High Alpha, Kristian founded the prolific design agency, Studio Science. During his time at Studio Science, Kristian primarily served software companies which ultimately led to him being a founding partner at High Alpha. Between Kristian’s experience at Studio Science and his time at High Alpha helping launch 30+ companies, it is safe to say he knows a thing or 2 about design and storytelling. Kristian joins us to break down how design can be a competitive advantage, the importance of storytelling in business, the High Alpha Studio model, and much more. Our CEO, Mike Preuss, had the opportunity to sit down and chat with Kristian. You can give the full episode a listen below: What You Can Expect to Learn from Kristian: How the High Alpha Studio models work What kind of co-founders they look for at High Alpha How design can be a competitive advantage Why storytelling is important in business and fundraising Why Coco Chanel, Teddy Roosevelt, and Ralph Lauren are great storytellers What he likes to see in a cold email from a founder Related Resources: Kristian’s Twitter Kristian’s website Apply to become a High Alpha Co-founder High Alpha’s Visible Connect Profile

If you’re working in Venture Capital or are fundraising from VC’s, the odds that you’ve experienced a lack of diversity in race, gender, and as a result ideas, is very high. According to a survey by Richard Kerby at Equal Ventures, the VC industry is comprised of 58% white men, followed by 20% Asian men, 11% white women, 6% Asian women, 2% Black men, and 1% Black women, 1% Latinx men, and nearly 0% are Latinx women. And when you consider “who controls venture capital dollars”, in other words, “who gets the bulk of the carried interest, salary… and ultimate control over which startups get funded”, it’s 93% white males. (Source) Source: James L. Knight Foundation; data extrapolated from Figure 41 based on Preqin’s data set, which defines venture capital as a subset of private equityH VENTURE PARTNERS Meanwhile, a report by McKinsey and Company shows that diverse working environments financially outperform homogenous workforces by as much as 35 percent. The Venture Capital industry is missing out on diversity of people, ideas, ventures, and ultimately higher returns. If you’re interested in helping improve diversity at your VC fund, check out these resources to start taking actionable steps forward. 1) Increase Your Individual Knowledge about Diversity and Inclusion It’s important to remember to take ownership of your diversity and inclusion education process rather than burdening minority groups with the responsibility of teaching you or correcting you. You can start by checking out this curated list of relevant articles on diversity and inclusion for both founders and funders. The list also includes a list of organizations you can work with to help improve diversity and inclusion including Parity.org, NVCA VentureForward, and Project Include. These resources are curated by Founders for Change, a group of inspiring founders who are dedicated to diversity and inclusion within their companies, and desire greater diversity at the highest levels of VC firms. Learn more about Founders for Change here. 2) Encourage Your Fund to Take Part in the Diversity VC Standard Program & Certification The Diversity VC Standard program is a great way to strategically set diversity goals for your fund while also increasing the knowledge of D&I practices for your whole team. It was started in 2020 and pioneered by 15 leading funds across Europe and Canada. The certification sends signals to the rest of the ecosystem that your fund follows the best D&I practices. The program walks VC’s through three stages: Assessment – A guided run through of your fund’s current policies and practices Consultation – Curated advice and recommendations on next steps according to fund targets Certification – To Level 1 (setting a benchmark above industry average) or Level 2 (leading the way on changes to D&I policy) For more information about Diversity VC follow this link. 3) Broaden Sources of Dealflow Beyond Traditional Channels While cold outreach does sometimes work, most deals are funded through a warm introduction from someone in your network. For this reason, it’s a good idea to reflect on who comprises your network and decide if you need to branch out. Some advice from Sarah Millar, Principal at City Light VC and head of Diversity VC’s US Chapter — Be intentional about building relationships with funds that focus on diverse founders and leverage those to grow your own networks. Setting up regular catch-ups, co-investing in their deals, and sharing deals is always what works in VC – so being intentional about who you do it with and what their focus areas are is going to pay dividends. Harlem Capital has put together a thorough database of diverse investors that is a great starting point. You can also broaden your dealflow sources by checking out these resources: Crunchbase’s Diversity Spotlight, the Black Founder List, Latinx Founders Collective, Female Founded Club. 4) Guide Portfolio Companies on How to Build an Inclusive Culture As a VC, you’re oftentimes in a position to influence your portfolio companies as they grow. Get informed about what makes a diverse and inclusive culture so you can guide your portfolio companies as they build their teams. A great place to learn about inclusive cultures is by checking out the resources put together by Project Include. The non-profits mission is to give everyone a fair chance to succeed in tech by using data and advocacy to accelerate diversity and inclusion solutions. Project Include has even curated recommendations on each step in the process of building an inclusive culture, including how to lead as a VC. Leading the change to improve diversity at your VC fund may not be easy but we hope these resources serve as a source of motivation and encouragement. 5) Explore Diverse Networks when Making your next Fund Hire When looking to add talent to your VC firm, start by exploring organizations on a mission to increase diversity in Venture Capital. Vencapital is empowering the next generation of investors by providing training programs catered specifically towards women and minorities looking for entry-level roles in VC. Chicago:Blend is on a mission to advance diversity, equity and inclusion in Chicago’s venture capital and startup community. They publish annual diversity data, help underrepresented and overlooked professionals break into VC, and deploy necessary DEI resources to the community. You may also like How to Hire for your First VC Platform Role. Do you have suggestions for other steps or resources you think we should include? Let us know!

On episode 6, season 2 of the Founders Forward Podcast, we welcome Corinne Riley. Corinne is an investor at the prolific venture capital firm, Greylock, where she primarily invests in B2B companies. About Corinne Over the course of her career, Corinne has built a knack for helping companies build and develop a go-to-market motion. Corinne has extensive knowledge of community-led growth and helping companies grow at the earliest stages of their business. Corinne joins the show to break down community-led companies and the thought process behind her investment decision-making. Our CEO, Mike Preuss, had the opportunity to sit down and chat with Corinne. You can give the full episode a listen below: What You Can Expect to Learn from Corinne What a community-led company is How community-led growth can be a moat What the community commitment curve is What changes between a seed and series A pitch What data she would expect to see in a Series A company What she likes to see in a cold email from a founder Related Resources Corinne’s Twitter Common Room & Uncommon Corinne’s post on Community-Led Growth The Business of Belonging Greylocks’s Visible Connect Profile

You may be interested in better defining your VC Platform approach because you’re thinking about hiring for your first Platform role or you want to strategically determine where to allocate more resources to improve your post-investment support. Whatever the reason, it’s a worthy investment of your time because your VC Platform can help set you apart from other investors in a competitive deal flow environment. Despite the importance of the topic, not very many frameworks exist to help investment teams and Platform teams figure out how to improve the support they’re providing startups. This article highlights the TOPSCAN method and serves as a useful tool to take a wide lens view at the needs and resources that already exist within your portfolio today. What is the TOPSCAN Method for Startup Support? The TOPSCAN method for supporting startups is a hidden gem of a framework first outlined in 2013 in The Journal of Private Equity. It was designed to help investors improve their operational support of startups. The framework includes seven key management techniques as outlined below: Using this framework, and the exercise outlined below, you can strategically determine the areas of support that will deliver the most value to your companies and reap the most return for the investment of your VC Platform’s time and non-capital resources. Using TOPSCAN to Identify your VC Platform Positioning The objectives of VC Platforms are all about formalizing the post-investment support processes and making them repeatable and reliable. Therefore, you want to make sure you’re scaling your most impactful areas of support. To discover which areas of support are going to be the most valuable to scale from both your portfolio’s and your fund’s perspective, you should be thinking about where portfolio needs, available resources, and VC brand strategy align. To do this, consider using this VC Platform Positioning Exercise template as a guide. VC Platform Positioning Exercise Portfolio Needs To get started, navigate to the Portfolio Needs column on the VC Platform Positioning Exercise. Here you’ll begin to answer the question What is the most impactful support you could be providing your companies? The exercise starts with this column because it is absolutely critical to have a finger on the pulse of what is top of mind for your portfolio companies. Just as you would never advise one of your portfolio companies to build a product without first understanding their customer, you need to understand your portfolio companies (read: customers) before you start building out your VC Platform approach. To do this, you could consider: Sending out a survey; Using Visible.vc’s Request feature to streamline the collection of qualitative responses; Or Scheduling a check in call with your founders during which you ask ‘what is the most impactful way we can support you’* *If you don’t have strong relationships with companies already in place, start by setting up informal check in calls to build rapport instead of a survey. Document the trends you see emerging across the portfolio using the TOPSCAN categories of support which are included in the VC Platform Positioning Exercise. You’ll also want to assign a weight to each category according to the level of demand or need. Portfolio Needs Example: Available Resources Next, review and consider which resources for company support already exist at your firm. Your goal should be to answer the question What resources do we have internally and/or how could we source these externally? Start mapping out these resources by the TOPSCAN category they’re related to. Take into account which resources your VC Fund has internally versus where it could make sense to partner with a service provider. Assign a weight related to how available the resources already are within your firm. For example, your portfolio may need help with recruiting but you don’t have resources on staff to support this. In this case, you may consider whether there is a budget to adopt a software or form a partnership to provide this type of support to your companies. Available Resources Example: Brand Strategy And finally, it’s important to keep in mind your fund’s brand positioning to make sure the resources you’re allocating align with your brand. In this section you’re answering What do we want to be known for? As Jay Acunzo from NextView Ventures notes “platform only works when you’re known for something.” Brainstorm within your team until you’ve clarified what it is you want to be known for. Do you want to be known for data-driven decision making? Or maybe you want to be known for identifying and investing in diverse teams. Denote this in the ‘Brand Strategy’ section of the exercise and again assign a weight to each category as you fill them out. Brand Strategy Example: Once you’ve completed the VC Platform Positioning Exercise, begin looking for overlaps in portfolio needs, available resources, and brand strategy. The areas in which you identify the most alignment should form the basis of your VC Platform approach. And as Peter Drucker once said, “You cannot manage what you don’t measure”. Be sure to set up KPI’s for your newly defined VC Platform approach so you can measure, analyze, and iterate as needed to refine your approach overtime. And with building anything new, keep in close communication with your ‘customers’ so you’re confident you’re building something of value. Other VC Platform articles we love: Paths into Venture Capital – Decoding the Platform Role Director of Platform, what does that mean? Why VCs are investing in Platforms to Compete Are Newly Formed Roles In VC Firms Differentiators, Table Stakes Or Total BS?

On episode 5, season 2 of the Founders Forward Podcast, we welcome Ezra Galston. Ezra is the founder and partner at Starting Line, a consumer-focused VC fund located in Chicago. About Ezra As someone who has faced the ups and downs of being a founder (plus the stresses of fundraising), Ezra and the team at Starting Line has made mental health a focus. Every founder in the Starting Line portfolio receives a subsidy for “their first three sessions of therapy, executive coaching, or co-founder counseling (up to $200 each).” Ezra joins the Founders Forward to break down fundraising, founder health, and the consumer market/what excites the team at Starting Line. Our CEO, Mike Preuss, had the opportunity to sit down and chat with Ezra. You can give the full episode a listen below: What You Can Expect to Learn from Ezra How a founder and board’s focus changes from early stages to later stage How venture fundraising differs for the “haves” and “have nots” How Ezra’s experiencing raising capital has impacted how he views fundraising Why Starting Line has a focus on their portfolio founder’s mental health How Starting Line subsidizes mental health sessions Why fundraising is a relationship-based activity Why he likes plenty of context before a meeting with a founder Related Resources Ezra’s Twitter The Starting Line Operating Manual Starting Line’s Visible Connect Profile