Derek Pilling
The Power of a Blank Page
This week was jam packed with Board meetings. During one of them, I experienced a presentation tactic I had not seen before. Before sharing the tactic, a brief word on board meetings and presentations. Board meetings are necessary, frequently productive, but all too often miss the mark in terms of their focus. Many Board meetings I attend […]
Adapting to the Great Reset
You would have to be hiding under a rock to have missed the shift in private tech investor sentiment that has become apparent over the past several weeks. Truth is, this shift has been underway for some time. The final stage – when the change in psychology fully reveals itself in the popular tech media – always arrives […]
Unicorpse and The Moral Hazard of Making Unicorns
I’m sure that many more thoughtful than me has written about the moral hazard of venture capital. In economics, moral hazard occurs when one person takes an unreasonable risk because someone else will bear the burden of the negative consequences. In the age of unicorns, the moral hazard in venture capital has never been greater. Moral hazard […]
Negative Churn
In a board meeting yesterday, we had a brief discussion around “negative churn”. Negative churn is a catchy phrase and apparently a hot-topic in some SaaS circles. I like some of the concepts and disciplines that an understanding of negative churn implies, but I also think it is an unnecessary concept that actually makes it […]
Kindred Disciplines: Growth Equity and Growth Hacking
Growth hacking is now a mainstream term in tech circles, particularly those that are consumer-focused. Growth hackingdefinitions abound, but generally emphasize a data driven, creative and flexibly opportunistic approach to customer acquisition. Many would argue that growth hacking is simply a new term for an old concept – marketing. While the functions, tools and skills […]
Throw Out Your 2015 Strategy and Budget Right Now
The arrival of a new year (and the beginning of a new one) brings a flurry of cognitive churning. As individuals, we 1/ reflect on the year passed, 2/ ritualistically write and read predictions for the next year, and 3/ make resolutions and set goals that are intended to inspire us to greatness during the […]
We Sell the Ultimate Commodity – Money
Last month I participated in a panel discussion at Denver University organized by Maclyn (Mac) Clouse. Mac is a long-time educator and supporter Denver’s entrepreneurial community. I was joined by Peter Adams, Executive Director of the Rockies Venture Club. Mac’s setup for the discussion was “dangerous” because he offered both Peter and I the opportunity […]
Improv at the Office: Yes, and…
When I get really busy, I communicate less effectively. Truth is, I don’t listen as well, I get short in my responses and I cut off conversation prematurely, because I’m so focused on getting onto the next thing. I’m not proud of it, but it happens. The First Rule of Improv When I was in […]
Founder Liquidity and Growth Equity
I’m seeing more and more growth equity financings come to market with an over-sized component of the financing allocated to existing shareholder liquidity. I’ve seen enough of these transactions to consider it as a trend and to wonder what is motivating it. Founder Liquidity in Context Whereas liquidity isn’t typically a feature of venture financings, it is […]
Finding harmony between advice and self-interest
I just wrapped one of those calls where I had the opportunity to give advice to an entrepreneur that runs counter to my short-term interests. In this case, it is a story of a first-time entrepreneur who has built a $7 million revenue business and is wrestling with the decision whether to take growth capital […]
What is an entrepreneur to do when restrictive covenants become restrictive
Restrictive covenants are standard features of venture capital, growth equity and private equity transactions although each investor type has its own standards. Restrictive covenants are the actions a company cannot take without investor approval. A short list of typical restrictive covenants includes: A sale of a Company or sale of a majority of the Company’s […]
What Entrepreneurs Can Learn From Peyton Manning
I’m not a huge football fan. But I do marvel at the drama of professional football. In particular, I admire what Peyton Manning has done for the Broncos the past two years. His individual contributions are well documented. But what I’ve been most impressed by is the positive impact he seems to have had on the […]
The fallacy of averages
A discussion with a portfolio company CFO reminded me that statistics are a dangerous thing and averages are misleading. “There are three types of lies — lies, damn lies, and statistics.” Most businesses analyze their performance using overly simplistic tools. For an extreme example, imagine a scenario where the average customer produces monthly recurring revenue […]
Basics of Unit Economics Analysis
When an investment passes our first-screen at Meritage Funds, the first deep-dive we typically do is on the unit economics of the business. Unit economics are the fundamental financial building blocks of a business. If you can pin down the unit economics, you can determine contribution margins, break-even points and perform ROI calculations all of which […]
Growth Equity Investors are Hedgehogs; VCs are Foxes
Growth equity is increasingly being recognized as an investing discipline that is separate and distinct from venture capital. That being the case, how does one distinguish between a venture capitalist and a growth equity investor. In my mind, growth equity investors are hedgehogs; venture capitalists are foxes. Allow me to explain. Ever since I read […]
