Posted by: Dr Pano Kroko | August 28, 2015

Beijing Blues

Beijing’s aggressive quality and sudden, sharp currency devaluation by China that roiled the world’s financial markets and turned the stock exchanges around the globe on their head this past week itself framed the move as a mere adaptation to the wishes of others, specifically, the International Monetary Fund and the Obama administration, which have long urged China’s central bank to use more market-based criteria in setting its exchange rate.

It just so happens, however, that doing so at this moment cheapened the yuan//renminbi, against the dollar; which boosts the competitiveness of Chinese exports and hurts the sale of U.S. goods in China.

Predictably populist and easily erring politicians ranging from Donald Trump to Senator Charlie Schumer, are crying “currency war is coming and the sky is fallng.”

Yet what that faulty interpretation overlooks is that China’s currency has gradually but steadily appreciated over the past 10 years, rising 25 percent versus the U.S. dollar, and the latest move reverses only about a sixth of that. It would not seem to be in China’s interest to let the bottom fall out of the yuan//renminbi, because that would trigger ruinous capital flight from the country.

Something that at any rate has already begun… Capital is free flowing and no amount of government control can stem the flow; except the iron laws of Beneficial IRR. The law of Returns. And the law of Compound Interest…

Tweaking the currency, like previous expedients the government has tried (stimulating a short-lived stock-market bubble and bailing out the losers, for example) may indeed boost exports, thus enabling Beijing to paper over this fundamental contradiction for a while. It won’t solve it. To the contrary, Beijing’s action reinforces the impression that the regime is improvising in the face of a growth slowdown that’s actually worse than official statistics suggest.

It’s no coincidence that, in addition to a troublesome economy, President Xi Jinping is also presiding over what Human Rights Watch’s most recent annual world report called “the harshest campaign of politically motivated investigations, detentions, and sentencing in the past decade, marking a sharp turn toward intolerance of criticism.” The most recent wave of arrests targeted more than 100 human rights lawyers in July.
Beijing’s formula for social peace is economic growth plus political homogeneity. As long as the Dollars keep coming in and are shared amongst the new Middle Classes — all is well in the Sino-landscape of thousands of differing constituencies…

However when the economic landscape become a rough terrain to navigate and the less wealth and prosperity the Chinese Leaders can deliver — the more Autocracy they must impose. Because what the Communist Party absolutely refuses to permit, is intellectual freedom, democratic participation, governmental transparency and a reliable rule of law, which are indispensable ingredients for a truly prosperous market economy.

Freedom of Thought and Expression is also the key ingredient for Innovation and that is now lacking seriously depriving the Chinese Economy from Market and Technological Innovation further weakening the new economic growth prospects of the country; relegating it’s best entrepreneurs to simple Imitation and Copying of others’ successes. The leaders understand that and that is why your intellectual property is worth jackshit in China — no matter how man patents you’ve got or special dispensations.

Naturally the elliptical moves of the historical pendalum, towards permissiveness, human rights, and market reforms, is not an easy one to predict — but it is a forthcoming harbinger of change. And nowhere is change more welcome than n China’s Entrepreneurial class. The market makers fully understand and embrace that…

So we need a bot more loosening uop of the controls and more freedom. and unless the Party bosses understand that and until they change, China’s people and the rest of the world, including the US, and EUrope’s producers, consumers and investors very much included — we will all be vulnerable to the vagaries of secret politburo decision-making.

Yours,

Dr Kroko

PS:

Dr Fu Manchu once famously said: “Watch my nails growing”

That about captures the glacial speed of China’s change.

So don’t expect anything changing speedily.

But the wheels are already in motion…

The convenient economic picture is that the Chinese are in deep economic trouble, and the small coterie of Communist Party officials who run the country are somewhat at a loss for what to do about it.

Macro Economic Growth has been flagging, yet the ruling elite is hesitant to turn from the state-led investment-dominated policies that worked in the past, because putting the private sector and consumers in charge would imply a loss of political control.

All the more reason for President Obama to press the cause of democracy and human rights with Mr. Xi when he arrives in Washington for a state visit next month.

 

 

Posted by: Dr Pano Kroko | August 27, 2015

China Fever

Making Money has been easy in China for the last 30 years — yet now it has gotten easier…

Recent economic events in China have created turmoil in the global markets. Many economists believe that China is experiencing a financial and economic meltdown.

Yet in the eyes of experienced and long term China investors who are deeply vested in China — this apparent meltdown is nothing more than a popular narrative, perpetuated by the scare mongers.

After last week’s fever we are here again to report that China’s economy is still holding up reasonably well.

First, China’s economy is on pace to grow at 7 percent this year. Wage growth has continued to grow at a rapid pace, and more nonagricultural jobs have been created this year than ever before.  These are strong growth indicators and thus I do not believe that these data points are consistent with an economy heading for a hard landing.

Second, many economists believe that the economic decline in China’s industrial sector is a sign of a slowing economy. This is a far too simplistic explanation because for the past three years, China’s economy has been moving away from the industrial sector, with the services sector driving the economy forward.

Third, economists believe that the debt burden incurred by China in recent years has thrown the country into a financial crisis. This couldn’t be further from the Truth because, after China’s modest depreciation of its currency earlier this month, there has been no substantial change in the exchange rate between the US dollar and the renminbi.

Lastly I see that the yuan/renminbi is holding strong against the US dollar…

And this is a clear sign that the country is not in the midst of a financial crisis.

Shaking off the fluff and fleecing the birdies is not a meltdown — it’s just course correction work.

Live with it or get out of margin.

Aren’t emerging markets fun?

Yours,

Dr Kroko

PS:

As for the fear sellers, the margin holders, and the chicken-littles crying that “The Sky Is Falling in China” we deeply regret their precarious psychological condition; but they must see their crying out loud need for strong Freudian Therapy.

After many many years of couchsurfing while speaking to stern men wearing hipster glasses, beards, and pipes — they can rejoin the fray.

But until then — please take your Meds gentlemen and shut the Fvck up; cause you know nothing about China.

Posted by: Dr Pano Kroko | August 27, 2015

My Seattle Girls

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Posted by: Dr Pano Kroko | August 27, 2015

My Seattle Girls

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Posted by: Dr Pano Kroko | August 27, 2015

My Seattle Girls

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Posted by: Dr Pano Kroko | August 27, 2015

My Seattle Girls

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The reality of the Startup Silicon Valley model is very different than the Media might have presented to You.

Sounds romantic to play around but how often do you have an insight that might lead to a Business?

How often do you happen to have deep domain expertise and the innovation prerogative to create a different mousetrap?

And how often does it happen that all of these conditions apply at a time that You are able and willing to go out and launch a StartUp?

Because the Reality is, that there exists a very normal attrition rate of 99.6% of those who start out to fly…

That is 99.6% of the StartUp companies that go the route of start, launch, and pounce… die off.

Many hatch yet very few succeed.

Everyone knows that starting companies–and investing in startups–is a risky way to earn a living.

But few people appreciate just how risky it is…

To spell it out for you who are not good in Maths and Arithmetic: Less than One [1] out of every Two Hundred [200] companies applying to Y Combinator succeed, and that makes for a 0.04% percent success rate for startups… And success rate is nothing spectacular but simply to have a company being worth $40 Million after four to five years of existence.

Thus even if the Y-Combinator system has even a modest ability to pick winners — the odds that a company applying to Y Combinator will be a success are significantly lower than the odds of success of the companies accepted into the program and even lower for companies that don’t even apply to the program because of it’s perceived high competitiveness.

And if only 37 of the more than 10,000 companies that have applied to Y Combinator over the years have somehow “succeeded” this is a staggeringly low 0.4% success rate. And then some of those 37 startups that have survived or “succeeded” by taking on more capital than they are now worth… they are not quite the success story for the investors. So the threshold of success for the Y-Combinator is a rather low expectation setting since they set the benchmark of success at $40M.

To put it differently:  Only 1 in every 200 companies that applies to Y Combinator will succeed. And some of those are sinking have taken more investors capital than they are worth today.

Not Good. No Same person would do that. So who takes that kind of risk?

Me.

The odds of this game are so risky that No Vegas gambler would have taken them — no matter how lubricated through cocktails freely offered by the vixen Casino queens.

Crazy eh?

In case any entrepreneur or angel investor is deluding themselves into thinking that startups are an easy way to cash in, they might want to rethink that proposition.

Think and think again.

So to somehow improve the Odds of this Life game — we are choosing to play better by improving upon the StartUps we choose to work with.

To make things even better — we choose very carefully those we want to play with.

Therefore we are running a feeder mechanism every month via a pitch & demo and then we run monthly clinics with our StartUps, in Seattle and across America, in order to enable them to carry on before we speed them off to the Markets — and we start by prepping them for the Capital Markets because growth capital is the lifeblood of every young and growing company.

We do all this because even if all things remain the same, and the ProductFit, and MarketFit are somehow taken care off, and the team is highly functional — still….

No Capital — No Life.

That is it. No StartUp Life…

No Innovation…

No Wealth Creation…

No New Jobs…

No Prosperity…

Scary Stuff.

Now we wouldn’t want that.

Would we?

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So because we are always fixing startups, and because we know how to work under the hood and start them up — we have accumulated a treasure trove of collective wisdom over the years, that we share with all of our Startups and with all of You as part of the American Angels Growth Capital Network.

We share this wisdom in places like here, and in our American Angels sites: http://www.meetup.com/AmericanAngels/ where you can also find these gems of StartUp Company tools, along with all the documents that CEOs need and the opportunity to raise abundant capital. American Angels share  the basic idea that you have pretty much one chance to get it right as a StartUp CEO with the Rocket fuel you’ve got to burn, and this is only a few months time… So its crucial to bring it on fast and furious, when presenting your StartUp company to Investors.

And when you interface with Angels, it’s best to present your company’s team, starting first with the Business opportunity, and the solution to the problem you are solving, before you launch into the Financial Metrics that support your Vision, your Company, and Your Market Attack.

Aside form that — just make sure to inject passion and intelligence as you tell your story, no matter how mundane it might be…

But before you do that it’s best to know WHY you are hanging out there hoping to catch the attention of Investors…

Ask yourself these questions:

Do you really need to raise money now?

And if so — are you ready, REALLY READY, to do this now?

And if all else is Yes — is there a Greenfield opportunity for us to harvest together?

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Angels and VCs are busy folk and rather ornery, so they are not usually the easiest people in the world to get hold off, and they certainly don’t make good friendly companions, to go down to the Local for a few pints…

Everybody hits us for money. And that’s just tiresome. So if you get lucky and happen to find us lounging around knocking back a few — talk to us, about what’s on your mind; but don’t oversell it and try to be succinct. Be succinct because all Investors are people and people need down time too. And there is no better down time than being in the pub with your mates silently reviewing your day.

Keep in mind that our time is the most valuable resource we have, and so you should not waste it. You should not waste our time in wasteful words or thoughts. Every second of our time is as valuable as a diamond — and if we want to waste it we can do it perfectly well on our own…

But if you manage to get our attention — then make it brisk. Make it count for something. Show us your dream, and tell us your story, but also nudge us in the right direction to see clearly the business You are building.

Show us quickly the measurements we need to see when we initially evaluate your business. And this evaluation starts the moment we meet you. Don’t worry that we don’t pay much attention to you — it’s the business we care to hear about.

Old school Angels and VCs often look at GMV, revenue, and bookings first, because they’re an indicator of the size of the business. Yet once investors have a sense of the size of the business, we’ll want to understand growth, scale, and income, to see how well the company is performing. If these basic metrics are compelling — then and only then, the savvy investors might want to look further.

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I meet with many entrepreneurs every year, and in the course of those endless meetings am presented with all kinds of words and numbers. And of course always the talks revolve around numbers, measures, and metrics, that illustrate the size of the market, the promise of their business, and the health of their particular company.

Yet, the various metrics may not be the best gauge of what’s actually happening in the business.

Or the people may use different definitions of the same metric in a way that makes it hard to understand the health of the business.

And, while some of these Metrics may be obvious to the StartUppers and the CEO, who live and breathe these metrics all day long in their company —  we are usually clueless about them since every company is different.

So I compiled a list of the most common confusing metrics, and where appropriate, I’ve tried to add some notes on why the VC and sophisticated Angel investors focus on those metrics.

Just remember though that good metrics aren’t about raising money from VCs — they’re about running the business in a way where founders know how and why certain things are working (or not) … and can address these or adjust their trajectory accordingly.

But the most important Metric for Founders is to be able to realize IF and WHEN its the proper timing to go out and attempt to raise CAPITAL to scale your business.

Fundraising is very much like vivid and lush LIFE and in that it is exactly like the moment everyone screams “I’m coming” both in the comedic and in the dramatic colour of it. Timing in Life is everything. Because of that make sure the Timing of your fundraising must be justified and proper, because for most companies, it isn’t.

And you know how embarrassing it could be if you start screaming “I’m coming” before you are fully cocked. It is downright cannibalistic to scream before you are ready to ejaculate…  So fundraising is exactly like that. Timing is everything. Because it isn’t about the newspaper stories of $100-million rounds and “unicorns” running wild. It’s more about the act of mutual coupling that involves a relationship between the ones who want to build a company and the ones who want to provide the tools to do that. VCs are like Librarians that led you the books at the local library, but they need to have some assurance that the books will be returned at some point back to the Library for other people to use.

And this coupling is often an anxiety-ridden, lonely, frustrating process filled with fear, uncertainty, and doubt. Multiply these feelings and emotions and see where this is taking you. And despite all the stories out there, raising venture capital isn’t easy for Founders, Funders, and Startup Teams either…

So make up your mind carefully before you go out there seeking funding — because each Angel is like a bridge. And each bridge you “meet” and you don’t manage to cross it to get across to the FUNDED-COMPANY-LAND; consider it burned. Burning bridges is part and parcel of the course of startup fundraising.

Entrepreneurs are always evaluating tradeoffs, such as team size vs burn rate, valuation vs more capital raising, and structure vs loose coalition. But there’s much more, to the bridges, to the toll booths, and to the obstacles & the gatekeepers — so am sharing the list of questions I hear all the time in order to help shed some light on the realities of timing for raising capital and for burning bridges.

So ask yourself this question; When should we start raising capital and how do we time it right — let alone make it right?

You should only raise capital when you’re “ready” to execute a process, but determining when you’re “ready” is the hard part. You’re never actually ready: There’s always another close milestone that’s going to increase your valuation, there’s never enough time to prepare. At some point you just have to push yourself out there and begin.

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In the best case scenario, raise capital when these three criteria are true:

1) You have sufficient cash runway to provide you flexibility in the fundraising process so your back isn’t up against the wall (yes, that old adage ‘raise money when you don’t need it’ is true!). Runway = negotiating leverage.

2) You’ve achieved the necessary milestones to get the valuation you think you deserve.

3) You’re thoroughly prepared to deliver a knock-out pitch and efficiently respond to diligence requests.

What does a typical company raising a Series A, or an Angel round look like, and what are the right milestones we need to hit in order to ensure a successful raise?

There are so many factors that go into pricing a round of private capital, that it’s almost dangerous to draw specific conclusions from other companies. There is no right answer. Every company is different. Every management team is different. And the market conditions are always changing.

Just remember that regardless of size or what a round is called (seed, Angel, series A, B, C, etc.), it’s all about the alignment of capital to milestones. Use that rule to keep yourself grounded. The more traction and the greater the growth, the better.

Should we ask for a specific valuation?

While it’s certainly true that some companies can name their price, the reality for most startups is about taking the best offer the market delivers. Asking for a specific valuation can sometimes be a risky negotiating strategy. If you ask for a valuation of $x and the investors pass on the opportunity because they don’t think the company is worth $x yet, going back to that same investor with a lower valuation rarely leads to a different outcome.

By the way, even if you don’t ask for a specific valuation you’re probably providing valuation signals without even realizing it. When assessing a “valuation ask” by an entrepreneur, investors also consider implicit signals like the proposed size of the raise, the price of the last round, the total amount of capital raised, and the number of rounds of capital raised.

How much capital should we raise?

Of course you want to be strategic about the amount of capital you raise, not least because of sensitivities about dilution. As such, you want to size the round in a way that gives you sufficient cushion to get to the next set of milestones and valuation inflexion points.

What you do not want is to end up a “tweener” caught between rounds! In investor jargon, “tweener” is a polite way of saying your valuation expectations are too high for the financial or operational traction you’ve achieved so far. To get yourself out of this position, you can (1) lower valuation expectations or (2) improve execution and grow into those valuation expectations. Neither are optimal in the middle of a fundraising process.

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What type of investors should we target?

The most important thing to focus on here is finding investors that are appropriate for the stage of the company: e.g., an early-stage company should focus on early stage investors. And if the startup is still in “company building mode”, then focus on targeting investors that are company builders.

You can always move onto later-stage investors as the company matures, but it’s hard to go back to an early-stage investor after bringing in a later-stage investor.

What are ‘crossover’ investors?

Crossover investors typically invest in the public markets, such as mutual funds and hedge funds, but also invest in private companies.

An increasingly important group of investors, crossover investors can be very valuable partners to a startup — particularly as it approaches the IPO stage. They can help a startup start transitioning to life as a public company and make the IPO process less jarring.

Should we include ‘strategic’ investors in our round?

A simple way to think of strategic investors is as ‘corporations that invest in startups’ — everything from corporations with large, dedicated investing organizations (with significant amounts of capital allocated just to investing in startups) to those who have made only one investment in their history (using cash straight from their balance sheet). Strategic investors can be valuable partners.

The advantages of strategic investors include expanded distribution, implied credibility, and technology sharing. On the flip side, choosing some strategic investors over others could mean closing off potential distribution channels. Understanding how a strategic investor seeks to work with its portfolio companies is an important ‘reverse diligence’ step entrepreneurs need to take before deciding whether to work with one.

How many investors should we approach? Can’t I approach just a select few?

You’re always striking a balance between efficiency and optimizing for probability of success when fundraising. Especially because you just want to successfully raise capital so you can get back to growing the business.

This is why you don’t want to talk to so few investors that you end up running a fundraising process multiples times — i.e., starting from scratch each time. That kind of ‘serial processing’ is exhausting. At the same time, you don’t want to cast such a wide net that you can’t deliver the personal attention required to identify the best partner for your company.

Can’t I just have a conversation with the investors? Do I really need to prepare a full slide deck? Most companies — again, not just focusing on those few big-name stars or ‘unicorns’ — get very few opportunities to make a strong impression with potential investors. So treat each interaction as your last. Make those interactions count.

Don’t leave anything to chance. Take time to prepare a full deck and practice, including creating a script and doing dry-runs.

How long does it take to raise a round? Some companies can get it done in a matter of days. For others it takes many, many months. Either way, be prepared for the process to take longer than you expect. Also give yourself plenty of cushion when assessing your cash runway.

To maximize your probability of success, the most important thing you can do is spend a little extra time upfront preparing for a process; remember, you don’t want to run the process twice in a short amount of time. In fact, the strongest leading indicator of successful financing — flawlessly executing on the businesshappens before you talk to investors. Companies that consistently deliver strong revenue growth and attractive profit margins rarely have problems raising capital.

I’m worried about sharing confidential information. How much information should we share — and when should I provide customer references? The venture capital community is built on trust and reputation. The most important thing for VC firms is their reputations and the easiest way for them to impair those reputations is by not honoring your trust. That’s why high quality venture capital firms will respect the confidentiality of your private information.

One of the potential risks of not sharing sufficient information upfront and waiting until after signing a term sheet is that the investor may change their mind after signing. You want to derisk this scenario by leaving only confirmatory (vs. discovery) diligence to post-term sheet signing. At the same time, don’t be naive: information occasionally leaks out, even unintentionally. So trust, but use common sense.

What kind of financial model should I provide to investors? Every company should be utilizing some sort of financial model or set of financial projections. Even if you’re at a super early stage, you should be managing to some sort of budget in order to understand cash burn and optimally time raising capital.

Understanding cash burn is one of the most important components of a financial model, and a robust model of cash burn includes detailed headcount-driven expenses. Understanding the unit-level drivers of revenue is also critical once a company crosses into the revenue generation stage. Just remember that precision is not necessarily an indicator of accuracy.

Should we raise debt instead of equity? Debt can be a great source of capital when used appropriately. It can dramatically lower the overall cost of capital and provide a lot of financial flexibility.

But, it should be used judiciously because borrowing means you ultimately need to repay that debt … and the consequences of not repaying it are severe (i.e., bankruptcy). Remember: debt is a complement to, not a replacement for, equity.

Should we use an advisor to help us raise the round? Investment banks or other types of advisors can add a lot of value when raising a round of capital, particularly at the later stages. Such advisors can help streamline the process by front-loading a lot of the diligence and preparation, allowing you to focus more closely on running the company. They can also help provide access to a broader set of investors.

That said, not every company needs an advisor, and the decision to use an advisor should be made in the context of the specific situation. For example, companies that receive multiple unsolicited term sheets at compelling valuations have the luxury of choosing their investor without the assistance of an advisor.

Should I sell some secondary stock? Selling stock early in a company’s life can be interpreted by potential new investors as a negative signal from the selling shareholders: What do they know that I don’t know? Is the company already fully valued?

However, selling stock may also alleviate pressures on some employees to make their ends meet and even allow them to remain committed to the company longer. As with everything here, the answer to this question depends on a set of factors unique to every company: How much stock in absolute dollars is being sold; what percentage of total ownership is being sold; what stage is the company at; has a predictable revenue stream been established; and so on.

What happens if I come up empty after running a process, or if the market conditions turn against me? Successfully raising capital is never a certainty, so always have backup plans in place.

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Backup plans can include doing a bridge from insiders, tapping debt lines, and reducing cash burn. In general, having alternatives provide you leverage in the fundraising process.

There’s been a lot of discussion lately (see for example this, this, this, this, and this) about what happens when founders who don’t have “muscle memory” — from having been through a down market — meet a market where capital is so readily available.

We thought it would be worth sharing more of what we tell our founders about how to think more strategically and take a long-term perspective when raising (and budgeting) capital. And while we go into some detail below, our advice to founders is actually very simple: Whenever you’re raising capital, think about constructing the round in such a way that you’re strongly positioned for the future. This means raise enough money to put the company in a strong position to achieve the necessary operational and financial milestones and maximize the probability of raising future capital — even if you don’t think you’ll need to.

Because building a company is hard. To quote serial entrepreneurs on valuations: “If you’re doing something ambitious… where you know you’re going to consume a reasonable amount of capital on the way there, you want to make sure you’ve got access to capital the whole path.” As cliché as it sounds: Raising Capital for a StartUp is a 26K Marathon Run — not a 100 meter Sprint.

And based on weather conditions and storms and lulls, one has to ask this: Why is capital so readily available right now? Besides larger factors at play, some of the reasons capital is so readily available right now is due to the following trends coming together at once:

1. For various reasons, companies are taking longer to transition to the public markets. Most of the growth and subsequent investment returns are also now being realized in the private (vs. the public) markets.

2. As companies stay private longer, the dollars raised per company has sharply risen — see below chart — which has created a perceived if not actual funding gap in the private market.

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[The total private funding raised by companies in the 2000s is in the billions (compared to millions for companies in the 1990s). While the numbers above reflect aggregate funding, single funding rounds have also often exceeded $1 billion. sources: Capital IQ, Pitchbook, company filings]

3. The funding gap is now being filled by new market entrants or existing players assuming a larger role — including corporate investors and sovereign wealth funds — as well as traditional public market investors such as hedge funds, mutual funds, and private equity funds.

But in my mind the Unicorns are set for a major downfall because their valuations not being Public [Since No IPO] they cannot be supported and they will inevitably blow up as the “balloon” comes calling.  Their erroneous choice to not take the road to the Public Markets as a conduit to Liquidity and to the Capital Markets is only a means to a nasty end. Their flat out greedy choice to remain losing vast amounts of money and to not run for an IPO yesterday only compounds the problem. So they now have to face the piper… The Big Liquidity crisis up ahead is that of the UNICORNS.

Old School Economics still apply: “If you are running a business that’s losing money & needs investments to survive, you’re coming up to hard times.” The SILICON VALLEY UNICORN BUBBLE IS THE NEXT ASSET CLASS TO BURST IN A BIG WAY because when a private venture capital (VC) backed start-up successfully raises a round of funding at an implied valuation that equals or exceeds $1 billion – it becomes a “unicorn” company — and as we all know Unicorns do not really exist. They are surely figments of our imagination and Hollywood dreams… so beware when you see large Institutional Investors pouring money into Unicorns because some con-job is in the offing…

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Currently, the largest US unicorn is Uber, which now has an implied valuation of $50 billion. Uber is estimated to have trailing annual revenue of only $415 million. This values Uber at an insanely high multiple of 120X revenue!

The unicorn with the highest valuation/revenue ratio is Snapchat, a company that is currently worth $16 billion, despite estimated annual revenue of only $1 million. Snapchat is being valued at a shockingly high multiple of 16,000X revenue!

America’s 15 largest unicorns are currently worth a combined $189.9 billion, despite these 15 companies having total trailing annual revenue of only $4.54 billion. As a whole, the top 15 largest US unicorns are being valued at an unjustifiably high multiple of 42X revenue!

Separately, it becomes very apparent and undeniable that unicorns have become America’s #1 most overinflated asset bubble! America’s top 15 largest unicorns are now being valued at a dangerously high median multiple of 69X revenue!

The National Inflation Association of professional Money Managers bears me out on this because they are also very concerned that Silicon Valley could soon face a major liquidity crisis that will blow the cover of all of these high priced Unicorns… and reveal them to be what they have always been: Donkeys masquerading for horned white horses…

unicornbubble1Snapchat not only has the highest valuation/revenue ratio of 16,000 – but it also has the highest valuation per employee with an amazing $400 million per person! America’s 15 largest unicorns are currently receiving an unprecedented median valuation per employee of $17.5 million!

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There is now a new record high of 76 unicorns that have their headquarters located within the US. America’s unicorn count has increased during every single month of 2015 – with a total year-to-date net addition of 27 unicorns, up 50%from a net addition of 18 unicorns during the comparable year-ago time period of January-August 2014!

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US based unicorns are currently receiving a total implied valuation of $285.5 billion! This is up an amazing 102.63% on a year-over-year basis from their total implied valuation of $140.9 billion at the end of August 2014! The average unicorn is now worth $3.76 billion, for a year-over-year increase of 25.33% from from an average valuation of $3 billion at the end of August 2014!

unicornbubble6It will be interesting to see just how badly unicorn valuations are negatively affected by the recent dramatic decline in publicly traded US stock valuations. Although VC funded start-ups are remaining private longer than ever before – as a result of their easy access to venture capital – most unicorn shareholders still plan to eventually exit through IPOs!

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On average, VC backed companies sell 20% of their total shares outstanding in IPOs. Therefore, the 76 US based unicorns that are worth a combined $285.5 billion, will need to attract $57.1 billion in IPO investment capital from Wall Street.Over the trailing twelve month period, VC backed IPOs raised a total of only $11.91 billion!

It will take approximately 4.79 years for VC investors in America’s 76 unicorn companies – to exit their investmentsthrough IPOs. The estimated time needed for all US unicorn firms to exit through IPOs is now 3.71X longer than in January 2014!

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The recent NASDAQ downturn will certainly make matters worse. The National Inflation Association of professional Money Managers is very concerned that Silicon Valley could soon face a major liquidity crisis that will blow all of these high priced banana boats out of the water!

The coming Unicorn Market Carnage will not only destroy these new Economy Unicorns but it will wipe out many Venture Capital firms that felt as though they were invincible.

Gone with the Wind will be the likes of those Unicorn lovers that we know and respect today.

Alas … those are the vagaries of history.

Who remembers King Midas today?

But for now that the music has stopped playing — with the rest of the fallout of the Nasdaq — methinks the Unicorn party must come to an end and the “Cleaners” must be summoned to clean up the mess.

I can hear the buzz of the vacuum cleaners already…

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Unicorns have been the darlings of the large scale VCs in the valley and beyond but as the party has ended — the rest of us the sane folks out there — we still have to think rationally about our Investments.

So we need to prioritize and teach our StartUps how to think about valuation and deal structure correctly…

So the easiest way to think about valuation is the tradeoff it provides relative to dilution:

As valuation goes up, dilution goes down.

This is obviously a good thing for founders and other existing investors.

But don’t take it to an extreme.

Because same as with all other things — the Middle Path is the Golden path.

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However, for some startups there’s an added wrinkle; they may face an additional tradeoff, of valuation versus “structure” which reminds us of the old adage of the CEO entrepreneurial position negotiations over Capital infusion with the Angel Investors and VCs, that goes something like this:

You set the price, I’ll set the terms

or

“You set the offer and I get to choose”…

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But what is structure?

Think of it as terms and conditions that appear in a term sheet below the headline valuation number.

All venture capital deals have some sort of structure. The question is what happens when those terms get more complicated, and what implications those terms have in the future in both good times and bad times for the markets and for the company.

In some situations, the goal of additional structure is to preserve or achieve a high valuation by altering the traditional risk/reward profile for both the investors and early shareholders. Some examples of more structural terms include:

Multiple liquidation preferences, where preferred investors can realize a return of multiple times of their investment (i.e. 1.5x or 2.0x) upon liquidation (rather than the traditional 1.0x) prior to common stock receiving any consideration;

Senior liquidation preferences, where new preferred investors receive a return of their capital prior to earlier preferred investors (rather than “pari passu” with earlier investors);

Participating preferred, where preferred investors can realize both a return of their capital while also participating in the upside after their capital is returned as part of the preference;

Full or partial ratchet, where preferred investors will reset the price of their shares (by receiving more shares) if any subsequent financing round is completed at any price below their investment valuation; and

Redemption provision, where preferred investors have the right to force the company to buyback their investment on demand.

There are multiple flavors of each of the above, and other forms of structure as well. (The opposite of structure, by the way, is a “clean” term sheet where investors take on more equity risk and have less protection if the company fails, but get to fully participate in the returns — along with the founder and startup employees — if the company does well.)

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What are the areas the StartUp CEO needs to optimize for, when raising capital?

Besides valuation and structure, there are many other things to consider when raising capital. As our founders evaluate the tradeoffs, a simple framework breaks the decision down into two primary categories: deal and source.

Deal includes all of the key components and terms of the proposed deal. Some of these you can quantify — such as valuation, dollars raised, and option pool refresh. Other components may include items that are difficult to quantify because they depend on an uncertain future, such as the structural terms discussed above.

Source includes the key components related to the provider of the capital. For example, firm resources, reputation, and precedents; partner experience, chemistry; available reserves in the fund, and so on.

So what should founders optimize for when raising capital?

Because each company and every stage is different, different founders face a different set of circumstances and challenges. They should therefore choose to optimize for different things. The challenge is that not all the available criteria are quantifiable or objective. In fact, some of the most important criteria, such as boardroom chemistry, may be very subjective.

Some founders may feel tempted to aim for the highest short-term valuation, and that may be the optimal strategy in some situations. However, in other situations, founders may have to prioritize other considerations — such as choosing a partner with a very specific and highly relevant skill set that can help the company execute on their strategy.

Ultimately, the key is to optimize for the full relationship over time by focusing on partners whose goals are aligned with the founder’s and whose investment will enable the startup to realize — not hinder — its potential.

This decision is especially important for younger companies still in the formative stages. Why? Because having a high valuation hurdle too early, restrictive terms imposed by investors, or a problematic deal structure can inhibit the ability to raise more money just when you need it the most.

Furthermore, terms agreed to in an earlier financing round tend to become the starting point for the terms negotiation in the next financing round; subsequent investors will naturally want at least the same terms. Disregarding deal structure at the early stages (Series A, B, and even C rounds) also creates complexity in the cap table or “who owns what”.

If everything goes well, then the downside of more structure is limited: The company grows into a successful behemoth and everyone, from the founder to startup employees to investors, wins.

The question is what happens when things don’t go according to plan or take much longer than expected: Someone else releases a competitive product, an incumbent decides to enter the space, launch is delayed, key hires leave the company, etc. Things can also change course for very good reasons: We want to GO BIG; growth was faster than expected; early customer traction was great; we have the opportunity to hire some really awesome folks that will position us well for the long term; etc. (In that sense, spending capital isn’t a bad thing; as we’ve argued before, today’s startups have a chance to be a lot bigger due to potentially larger end-user markets.)

Regardless of whether it’s for unexpected or planned, good reasons, the company will need to raise more money regardless of market conditions. This is where getting the right valuation, with the right set of terms, and with the right capital provider really matters.

How should founders go about all this?

The key is to run an organized fundraising process that’s aimed at creating competition.

If investors compete, founders are more likely to get the best set of terms and have a better set of alternatives from which to choose: They have all the leverage in the negotiation. The tradeoff that founders need to balance is that time spent away from the business while fundraising can have significant negative impacts on that business. Founders therefore need to strike a balance of targeting a broad enough group of capital providers to create competition while focusing on a group of capital providers that are highly likely to transact, so time isn’t wasted.

Founders should foster competition amongst potential investors to ensure the best terms — not just the best valuation — because potential investors will compete against each other to win a deal by offering either a higher valuation, or more company-favorable terms … or both. (By the way, savvy investors also want to avoid competition, and will price and structure deals competitively from the outset to avoid founders having to seek better offers).

Note, once the company signs a term sheet and all other potential investors fall away, the leverage flips from the company to the investor. Not completing or renegotiating the deal at this point could put the entrepreneur at a disadvantage: Those who were previously interested may assume the deal wasn’t done because something negative was discovered during due diligence.

Some Financial Metrics presented to VCs and Angel Investors 

Bookings vs. Revenue, is a common mistake when people use bookings and revenue interchangeably, because they don’t know that these two are not the same thing.

Bookings is the value of a contract between the company and the customer. It reflects a contractual obligation on the part of the customer to pay the company.

Revenue is recognized when the service is actually provided or ratably over the life of the subscription agreement. How and when revenue is recognized is governed by GAAP.

Letters of intent and verbal agreements are neither revenue nor bookings.

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Recurring Revenue vs. Total Revenue is a good example:

Investors more highly value companies where the majority of total revenue comes from product revenue (vs. from services). Why? Services revenue is non-recurring, has much lower margins, and is less scalable. Product revenue is the what you generate from the sale of the software or product itself.

ARR (annual recurring revenue) is a measure of revenue components that are recurring in nature. It should exclude one-time (non-recurring) fees and professional service fees.

ARR per customer: Is this flat or growing? If you are upselling or cross-selling your customers, then it should be growing, which is a positive indicator for a healthy business.

MRR (monthly recurring revenue): Often, people will multiply one month’s all-in bookings by 12 to get to ARR. Common mistakes with this method include: (1) counting non-recurring fees such as hardware, setup, installation, professional services/ consulting agreements; (2) counting bookings (see #1).

Gross Profit

While top-line bookings growth is super important, investors want to understand how profitable that revenue stream is. Gross profit provides that measure.

What’s included in gross profit may vary by company, but in general all costs associated with the manufacturing, delivery, and support of a product/service should be included.

So be prepared to break down what’s included in — and excluded — from that gross profit figure.

Total Contract Value (TCV) vs. Annual Contract Value (ACV)

TCV (total contract value) is the total value of the contract, and can be shorter or longer in duration. Make sure TCV also includes the value from one-time charges, professional service fees, and recurring charges.

ACV (annual contract value), on the other hand, measures the value of the contract over a 12-month period. Questions to ask about ACV:

What is the size? Are you getting a few hundred dollars per month from your customers, or are you able to close large deals? Of course, this depends on the market you are targeting (SMB vs. mid-market vs. enterprise).

Is it growing (and especially not shrinking)? If it’s growing, it means customers are paying you more on average for your product over time. That implies either your product is fundamentally doing more (adding features and capabilities) to warrant that increase, or is delivering so much value customers (improved functionality over alternatives) that they are willing to pay more for it.

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LTV = Life Time Value not Library Time Value…  Lifetime value is the present value of the future net profit from the customer over the duration of the relationship. It helps determine the long-term value of the customer and how much net value you generate per customer after accounting for customer acquisition costs (CAC).

A common mistake is to estimate the LTV as a present value of revenue or even gross margin of the customer instead of calculating it as net profit of the customer over the life of the relationship.

Reminder, here’s a way to calculate LTV: Revenue per customer (per month) = average order value multiplied by the number of orders.

Contribution margin per customer (per month) = revenue from customer minus variable costs associated with a customer. Variable costs include selling, administrative and any operational costs associated with serving the customer.

Avg. life span of customer (in months) = 1 / by your monthly churn.

LTV = Contribution margin from customer multiplied by the average lifespan of customer.

Note, if you have only few months of data, the conservative way to measure LTV is to look at historical value to date. Rather than predicting average life span and estimating how the retention curves might look, we prefer to measure 12 month and 24 month LTV.

Another important calculation here is LTV as it contributes to margin. This is important because a revenue or gross margin LTV suggests a higher upper limit on what you can spend on customer acquisition. Contribution Margin LTV to CAC ratio is also a good measure to determine CAC payback and manage your advertising and marketing spend accordingly.

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Gross Merchandise Value (GMV) vs. Revenue in marketplace businesses, these are frequently used interchangeably. But GMV does not equal revenue!

GMV (gross merchandise volume) is the total sales dollar volume of merchandise transacting through the marketplace in a specific period. It’s the real top line, what the consumer side of the marketplace is spending. It is a useful measure of the size of the marketplace and can be useful as a “current run rate” measure based on annualizing the most recent month or quarter.

Revenue is the portion of GMV that the marketplace “takes”. Revenue consists of the various fees that the marketplace gets for providing its services; most typically these are transaction fees based on GMV successfully transacted on the marketplace, but can also include ad revenue, sponsorships, etc. These fees are usually a fraction of GMV.

Unearned or Deferred Revenue … and Billings, in a SaaS business, this is the cash you collect at the time of the booking in advance of when the revenues will actually be realized.

As we’ve shared previously, SaaS companies only get to recognize revenue over the term of the deal as the service is delivered — even if a customer signs a huge up-front deal. So in most cases, that “booking” goes onto the balance sheet in a liability line item called deferred revenue. (Because the balance sheet has to “balance,” the corresponding entry on the assets side of the balance sheet is “cash” if the customer pre-paid for the service or “accounts receivable” if the company expects to bill for and receive it in the future). As the company starts to recognize revenue from the software as service, it reduces its deferred revenue balance and increases revenue: for a 24-month deal, as each month goes by deferred revenue drops by 1/24th and revenue increases by 1/24th.

A good proxy to measure the growth — and ultimately the health — of a SaaS company is to look at billings, which is calculated by taking the revenue in one quarter and adding the change in deferred revenue from the prior quarter to the current quarter. If a SaaS company is growing its bookings (whether through new business or upsells/renewals to existing customers), billings will increase.

Billings is a much better forward-looking indicator of the health of a SaaS company than simply looking at revenue because revenue understates the true value of the customer, which gets recognized ratably. But it’s also tricky because of the very nature of recurring revenue itself: A SaaS company could show stable revenue for a long time — just by working off its billings backlog — which would make the business seem healthier than it truly is. This is something we therefore watch out for when evaluating the unit economics of such businesses.

CAC (Customer Acquisition Cost) … Blended vs. Paid, Organic vs. Inorganic

Customer acquisition cost or CAC should be the full cost of acquiring users, stated on a per user basis. Unfortunately, CAC metrics come in all shapes and sizes.

One common problem with CAC metrics is failing to include all the costs incurred in user acquisition such as referral fees, credits, or discounts. Another common problem is to calculate CAC as a “blended” cost (including users acquired organically) rather than isolating users acquired through “paid” marketing. While blended CAC [total acquisition cost / total new customers acquired across all channels] isn’t wrong, it doesn’t inform how well your paid campaigns are working and whether they’re profitable.

This is why investors consider paid CAC [total acquisition cost/ new customers acquired through paid marketing] to be more important than blended CAC in evaluating the viability of a business — it informs whether a company can scale up its user acquisition budget profitably. While an argument can be made in some cases that paid acquisition contributes to organic acquisition, one would need to demonstrate proof of that effect to put weight on blended CAC.

Many investors do like seeing both, however: the blended number as well as the CAC, broken out by paid/unpaid. We also like seeing the breakdown by dollars of paid customer acquisition channels: for example, how much does a paying customer cost if they were acquired via Facebook?

Counterintuitively, it turns out that costs typically go up as you try and reach a larger audience. So it might cost you $1 to acquire your first 1,000 users, $2 to acquire your next 10,000, and $5 to $10 to acquire your next 100,000. That’s why you can’t afford to ignore the metrics about volume of users acquired via each channel.

Active Users: Different companies have almost unlimited definitions for what “active” means. Some charts don’t even define what that activity is, while others include inadvertent activity — such as having a high proportion of first-time users or accidental one-time users.

Be clear on how you define “active.”

Month-on-month (MoM) growth: Often this measured as the simple average of monthly growth rates. But investors often prefer to measure it as CMGR (Compounded Monthly Growth Rate) since CMGR measures the periodic growth, especially for a marketplace.

Using CMGR [CMGR = (Latest Month/ First Month)^(1/# of Months) -1] also helps you benchmark growth rates with other companies. This would otherwise be difficult to compare due to volatility and other factors. The CMGR will be smaller than the simple average in a growing business.

Churn: There’s all kinds of churn — dollar churn, customer churn, net dollar churn — and there are varying definitions for how churn is measured. For example, some companies measure it on a revenue basis annually, which blends upsells with churn.

Investors look at it the following way:

Monthly unit churn = lost customers/prior month total

Retention by cohort…

Month 1 = 100% of installed base

Latest Month = % of original installed base that are still transacting

It is also important to differentiate between gross churn and net revenue churn —

Gross churn: MRR lost in a given month/MRR at the beginning of the month.

Net churn: MRR lost minus MRR from upsells in a given month/MRR at the beginning of the month.

The difference between the two is significant. Gross churn estimates the actual loss to the business, while net revenue churn understates the losses as it blends upsells with absolute churn.

Cashflow and Capital vs Burn rate is key here.

And that’s the bridge over the cleavage one has to cross… to get to the promised land.

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Burn rate refers to the rate at which a company uses up its supply of cash over time. It’s the rate of negative cash flow, usually quoted as a monthly rate, but in some crisis situations, it might be measured in weeks or even days.

Analysis of cash consumption tells investors whether a company is self sustaining, and signals the need for future financing. Be careful around companies with high cash burn rates. These investments can turn to ashes real fast. And all of today’s Unicorns have huge Burn rates.

It is easy to get burned by the runaway Burn Rate so be ware of the early signs: If a company’s cash burn continues over an extended period of time, then the company is operating on stockholder equity funds and borrowed capital. When a business like this seeks additional investment capital, investors need to pay close attention to the rate at which it’s burning cash.

Burn rate is mainly an issue for newer, unprofitable companies in exciting growth industries. As it takes a while for many young firms to generate cash from operations, their survival depends on having an adequate supply of cash on hand to meet expenses. Many IT and biotech companies face years of living on their bank balances.

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But burn rates are important also for mature companies that are struggling and burdened with excessive debt. Think of airline stocks. In 2001-2002, escalating competition combined with major crises placed the largest air carriers in a cash crunch that threatened industry collapse. United Airlines, for instance, suffered a daily cash burn of more than $7 million before seeking bankruptcy protection.

Cash burn is a worry. If companies burn cash too fast, they run the risk of going out of business. That said, if they burn cash too slowly, they risk falling behind in the competition to innovate, expand and gain market share. Good management manages cash well.

Burn Rate is key because I fund my early stage startups through monthly allocations that allow them to control their spend and their burn without requiring any management time or executive and adult supervision from me — besides my banker releasing a set amount each month to cover their burn rate.

Burn rate is the rate at which cash is decreasing. Especially in early stage startups, it’s important to know and monitor burn rate as companies fail when they are running out of cash and don’t have enough time left to raise funds or reduce expenses. As a reminder, here’s a simple calculation:

Monthly cash burn = cash balance at the beginning of the year minus cash balance end of the year / 12

It’s also important to measure net burn vs. gross burn:

Net burn [revenues (including all incoming cash you have a high probability of receiving) – gross burn] is the true measure of amount of cash your company is burning every month.

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Gross burn on the other hand only looks at your monthly expenses + any other cash outlays.

Investors tend to focus on net burn to understand how long the money you have left in the bank will last for you to run the company. They will also take into account the rate at which your revenues and expenses grow as monthly burn may not be a constant number.

Burn rate in case you don’t know is the amount of money a company is either spending (gross) or losing (net) per month. Burn Rate is important to get a sense of perspective on the reality warp that is startup world and the Timing that dictates our Life and Times especially during a frothy market like it is now and getting similar to such crazy times as 1997-1999, 2005-2007 or 2012-2014, and giving us a new perspective setting of just how crazy times are again.

Gross burn is the total amount of money you are spending per month. Net burn is the amount of money you are losing per month. So if your costs are $500,000 per month and you have $350,000 per month in revenue then your net burn (500-350) is equal to $150,000. The reason that most investors quickly zero in on net burn is that if you have $3 million in your bank account and have a net burn of $150,000 per month you have more than 18 months of cash left provided your net burn stays constant. Conversely if you’re burning $600,000 per month (yes, some companies do) then you only have 5 months of cash left.

It’s what signals to existing investors how quickly their teams need to be fund raising and the level of risk the company is facing and also it signals to potentially new investors both how quickly you need to raise (ie you have less leverage if you’re in a rush) as well as how much cash you’ll need if they fund you.

I often see companies burning $100,000 per month (net) looking to raise $6-8 million. My first question is, “If you’re only burning $100k / month why on Earth would you raise so much money now?” Whatever answers they have manufactured the only thing I hear is, “Because we can.”

By the way, “because we can” doesn’t always mean you should. There are many times when being overly capitalized before you’re ready is a negative.

At a minimum I encourage you to spend some time preparing for that question, which phrased another way is, “What do you plan to do with $6-8 million when you raise it.” The following are not really acceptable answers to potential investors (all of which I hear often):

  • We’re going to ramp up the team (with no detailed explanation of how and whom)
  • We’re going to start aggressively spend money on marketing our product
  • We want a strong balance sheet (um, ok. but that’s our firm’s money on your balance sheet. if you have a good use for it and we’re excited about your company – fine. otherwise I prefer to invest less and risk less)
  • We want money to make some acquisitions (investors would prefer to fund M&A if they know specific deals – not to encourage bad behavior. Plus, most early-stage M&A fails so this isn’t likely a good use of capital for a young company)

But while Net Burn is the more critical figure at first blush and what most investors will focus on, Gross Burn is not irrelevant.

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In a world where the economy only heads in one direction (read: 2009-2014) most investors & entrepreneurs forget to pay attention to gross burn. But those of us with longer memories remember that the revenue line can move south very quickly when the market overall turns south. You are particularly vulnerable if:

  • You have revenue concentration (few customers each providing a large total of percentage of your revenue)
  • You have a large number of startup customers (because when markets crash they have a funny way of going bankrupt quickly or cutting burn precipitously)
  • You are reliant upon ad revenue (this is a variable spend which corrects quickly during a market correction)
  • You are discretionary spend (aspirin) versus necessary spend (prescription medicine)

This is why investors really like SaaS software companies where you have recurring revenue and your largest customer accounts for < 5% of your revenue and your renewals rates are > 90%. That is why these businesses are often valued more highly than other types of businesses.

So it always comes down to Growth vs. Profitability…

The answer is more complex than just Gross vs. Net Burn. I have long tried to raise awareness of the trade-off between growth & profits as outlined in this much read blog post on the topic (and please forward to your favorite journalist who often simply report that companies that aren’t profitable are bad).

In that article I linked to I outline the difference between gross margin & net margin. Gross margin (GM) is the amount of profit you make per sale of your product or service taking into account your total costs of selling that product or service. If you have a very low gross margin (10-30%) it can be very hard to build a large, scalable business because you need to make a lot of sales to cover your operating costs. Some industries work well with players who have low gross margins but these tend to be industries with very large, well established players and hard for new entrants to compete. In startup world low GM almost always equals death which is why many Internet retailers have failed or are failing (many operated at 35% gross margins).

Many software companies have > 80% gross margins which is why they are more valuable than say traditional retailers or consumer product companies. But software companies often take longer to scale top-line revenue than retailers so it takes a while to cover your nut. It’s why some journalists enthusiastically declare, “Company X is doing $20 million in revenue” (when said company might be just selling somebody else’s physical product) and think that is necessarily good while in fact that might be much worse than a company doing $5 million in sales (but who might be selling software whose sales are extremely profitable).

But the biggest thing to know is this: Companies who are scaling quickly in revenue and with a high gross margin often should invest as much capital in growth as they can manage responsibly because when you find a product / market fit and your company is growing at a very fast scale you want to capture market share before competition sets in. Think DropBox, Airbnb, Uber, Maker Studios. Your goal is to invest in engineering (to maintain your product lead), new offices / locations (to capture markets before others), marketing (to capture consumer attention before others do) … all of these activities consume cash often in advance of the revenue they generate.

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Growing > 100% / year compounded is a good thing and worth the salt. Bellow that — not so much. But this strategy greatly depends on the availability of Capital.

What about Availability of Capital?  The simple truth is that there is no one answer to the question “how much should a startup burn” which is very valuable if you’re at the proper stage and have raised capital in they way that works for you and not against You. The answer is another question that is really “how much should a startup without a strong VC lead, and without a strong balance sheet, and without a lot of cash in the bank, burn?

In these kinds of businesses I’m imply advising “Ring the Freakin Cash Register.” Stay lean and only raise a big round if you do find product / market fit at which point you want to loosen the belt quickly, increase the burn rate, and raise the capital neccessary to be able to do so.

Yet if you have strong VC support now and a lot of cash in the bank, you may be willing to accept a higher burn rate (say $300k or $400k per month) than a company with angel money and less cash in the bank. If you’re growing very, very fast and you’ve raised $40 million it is not crazy to think you might burn net $1 million / month (> 3 years of cash remaining) providing you are growing fast enough to justify burning $12 million / year.

Your value creation must be at least 3x the amount of cash your burning or you’re wasting investor value. Think: If you raise $10 million at a $30 million pre ($40 million post) that investor needs you to exist for at least $120 million (3x) to hit his or her MINIMUM return target his or her investor’s are expecting. So money spent should add equity value or create IP that eventually will.

If you have a strong relationship with your investors, if you have a strong balance sheet (lots of cash), if you have a business that is growing nicely and if your performance is super strong and you therefore believe you can raise more capital quite easily then you simply can tolerate a higher burn rate than somebody who can’t tick off all of these boxes. Of course a lot of this also comes down to investor trust. The more you burn the higher your investor’s leverage relative to you is if you start to run out of money and don’t have options.

What about Valuation? I wanted to call out special attention to valuation in this debate. I have long advised startup companies to raise capital at the top end of normal and by that I mean it’s ok for founders to want to raise at a high price (and thus minimize dilution) but if your valuation is completely out of whack with your underlying performance and if you ever need to raise more capital it becomes VERY difficult to raise more cash. Simply put – down rounds are very hard to achieve psychologically because insiders fight against them (rightly or wrongly) and outsiders have a mental gap that if your valuation is going down your company is forked up and they often just pass.

So a large part of your personal assessment on how much you can afford to burn also has to be your current valuation. If you were able to raise at a $50 million post-money valuation and have $2 million in the bank and the markets turn you better be sure that your valuation warrants raising at at least $50 million even in a tough market or I’d be more cautious about a higher burn. If you’re raised at $250 million+ valuation even more cautious.

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Here is a Framework to Guide You: Putting it all together, you should always be mindful of your personal circumstances and market conditions. There is no “right” amount of burn. Just make sure to pay close attention to your runway. Be careful about ever dipping below 6 months of cash in the bank. Take cash balance plus the net of your receivables & payables to get “net cash.” Divide net cash by your monthly net burn rate as an approximation of how many months of cash you have. You really need to subtract the final month. It’s like when the red light comes on in your car. You technically have more gas left but you never know if some unexpected circumstance causes you to run out of gas. And you risk “trading while insolvent” which has legal implications.

Understand how venture debt might shorten your projections: If you have raised venture debt you might have even less time. Many venture debt lines have “covenants” that restrict you from going below a certain amount of cash in the bank (in normal times they are more common – in better times they are less common). Obviously if you have venture debt your runway would be longer provided you haven’t called it yet while if you have spent the venture debt you have a much bigger obligation as cash winds down.

Please also note that many VCs will feel very uncomfortable with you spending venture debt towards the end of your cash balance unless they have already decided they would be willing to bridge you. The reason is that no VC wants to see the venture debt provider get burned if you become bankrupt. So while the VC might not have a financial obligation to cover the debt lost they would feel a moral obligation and/or recognize that if they do allow the less then their next company might not be able to raise venture debt.

In short – it’s complicated and make sure you talk openly with your investors about how they feel. I have been relatively supportive of the companies I invested in taking venture debt (on a case-by-case basis) while other people feel less comfortable. Best to make sure you’re aligned closely with your investor on this topic.

If Pre-VC be mindful that in tough times capital can take longer to raise:  If you have raised a limited amount of money from angels, accelerators or seed funds be very careful about having a high burn rate. I am not suggesting these are bad sources of capital – they are not. I am simply saying that these sources of capital often have a harder time bridging you quickly or writing larger checks if / when you run out of cash and especially in hard times. They tend to have many more investments than a concentrated VC and thus can’t cover all their bets as easily. On the other hand, exits at lower prices are easier with these providers of capital.

If you have raised VC make sure you have open communications on funding & plan with your VC the right level of burn & runway: If you have raised venture capital and you feel your runway (number of months cash left) is looking low have a conversation with your VC.  Would they be willing to put a bridge loan in place if need be? Do they think you ought to be cutting back on expenses to give you a longer runway to raise cash? Ask other portfolio companies how your VC acted when / if they got in a cash pinch. Better that you know early.

If you truly are a “growth company” & well positioned then go for it. Just make sure you’re still able to pull the rip cord if need be: If you have a large amount of cash in the bank + an untapped credit line + a rapidly growing revenue line + large, supportive VCs + a reasonable valuation then you may consider keeping burn rate slightly higher than you might normally as a way of expanding your business while your competitors can’t due to cash limitations. I call this “using your balance sheet as a strategic weapon.”

Just know the game you’re playing. Know that if market conditions change you may have to scale back quickly, too. If your costs are mostly variable (ie can be lowered quickly) then you can assume more risks. If your costs are largely fixed (equipment, offices, inventory) then be extra careful because High fixed costs + high debt rates have killed many great StartUp companies in Dot Com 1.0 and in the remaining New Economy years…

Here comes the Burn Rate again to burn you up…

Even whole countries got killed following this recipe for certain and absolute Failure.  High fixed costs + high debt rates killed many great countries in the past and more recently Ireland, Spain, and Greece, all went belly-up, when they assumed that somehow the New Economy Rules applied to them, and forgot prudence and productivity. Greece is a prime example of that method of Failure where everything went pear-shaped, when in addition to the High fixed costs + high debt rates for the Economy, the general economic system was run like a corrupt StartUp team made up of drunken sailors. Add to that the simple fact that all of their financial metrics were skewed and corrupt too.

Should anyone be surprised by the results?

One must avoid these false StartUp Metrics at any cost….

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Another false metric is the number of Downloads (or number of apps delivered by distribution deals) that are really nothing but just a vanity metric because savvy investors want to see engagement, ideally expressed as cohort retention on metrics that matter for that business — for example, DAU (daily active users), MAU (monthly active users), photos shared, photos viewed, and so on.

Cumulative charts by definition always go up and to the right for any business that is showing any kind of activity. But they are not a valid measure of growth — they can go up-and-to-the-right even when a business is shrinking. Thus, the metric is not a useful indicator of a company’s health.

Investors like to look at monthly GMV, monthly revenue, or new users/customers per month to assess the growth in early stage businesses. Quarterly charts can be used for later-stage businesses or businesses with a lot of month-to-month volatility in metrics.

There a number of such tricks, but a few common ones include not labeling the Y-axis; shrinking scale to exaggerate growth; and only presenting percentage gains without presenting the absolute numbers. (This last one is misleading since percentages can sound impressive off a small base, but are not an indicator of the future trajectory.)

When initially evaluating businesses, investors often look at GMV, revenue, and bookings first because they’re an indicator of the size of the business. Once investors have a sense of the the size of the business, they’ll want to understand growth to see how well the company is performing. And if these basic metrics are interesting, then they will compel new potential investors to look even further… and consider betting on this puppy, or not.

Along with all of the above this is what I need to see before I make an investment of capital, time, and energy:

1. Intelligence
Often it seems like there is a fine line between a madman and a startup founder, but we first looks to see that founders not only have an ambitious idea but that they thoroughly understand their product and industry, because this has nothing to do with an entrepreneur’s age or experience, it’s how deep is their understanding of what they’re about to do — so intelligence is key.

2. Energy
Being a founder is brutally difficult and scaling a company requires years’ worth of tireless devotion and an ability to endure and overcome massive difficulties. In the long run, people who succeed are just the ones who persevere.

We look to see if entrepreneurs have any hesitation about their plans, if they’re unsure of themselves and constantly looking for feedback, or if they’re easily upset by a setback, since these are all warning signs that these founders aren’t ready for the long haul.

3. Integrity is important because if you have a very intelligent and energetic founder with questionable morals, what you’ve got is a hardworking, smart crook. This is the hardest thing to judge and typically requires getting to know someone beyond just an introduction, but ultimately looking for a core set of values that rises above and beyond financial incentives.

With time, we’ve learned what to look for. So, for example, if I’m talking to a founder and they offer to do something that is slightly unfair to a shareholder or employee or founder in exchange for making me happy, that’s a red flag.

4. Charisma is not being liked by everybody, and it isn’t required for success, per se, but anytime we consider investments we need to genuinely like the founders.

There’s a chance with any startup that it will fail or that the relationship with the founders will fall apart, but we need to go into every deal with the assumption that the founders will be part of our life for the next 3-7 years.

If meetings and phone calls with a founder are exhausting or difficult, then no amount of money is worth it.

We seek out relationships with founders who will in turn make us also better Entrepreneurs and smarter Angels or more savvy Investors along the way…

My favorite founders are actually the ones who I learn from, so every time they call me up because they need help with something I jump on it because I know after walking around the block with them for an hour I’m gonna be much smarter and much more able to handle the next one…

And the best CEOs out there are serial entrepreneurs that know how to hack a StartUp and how to hack problems to bring our original solutions. These guys and gals are golden because they know that major problems are goldmines of opportunity.

The world’s biggest problems are the world’s biggest business opportunities…

Businesses that are built around those opportunities are great. But still we should curb our enthusiasm. So take the plunge but make sure to always check the vital signs of the company, and then compare to previous estimates of milestones, to make sure things look healthy before you go any deeper. And stay with the process because in the long run we are Problem Solvers and Equity Strategists.

Don’t jump in the bandwagon. Always be Contrarian. Stay well away from the masses…

And in the fringes you will see many worthy CEOs. And you are bound to meet some crazy ones, because the Founders run the gamut of space from the extreme logical sanity to unstable insanity, and everything in between.

So stay with Logic and add some Maths to solve the big problems…

And you shall find many Geniuses, many crackpots and many smart & interesting people along the way…

Avoid the self described geniuses like the plague, because if the mental health of the Founders is uncertain — then it’s best to run. Run far and run fast. Run away…

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These folks need an all white place with soft padded walls to call home, and no matter how smart they might appear their wacked-out convoluted minds never quite manage to built anything that resembles functioning business.

To give you a taste of this; there was the CEO of a groovy Mobile App company who after presenting her company to me, she gave me the heads up that if I didn’t like this startup — she had a bunch of more startup ideas that she could run by me. And she proceeded to awe me with her creative mind’s output. And that was that… That’s a real No. An absolute No-No. Don’t do that. And then we had this CEO who came in to describe his Internet company and then He was telling me unprompted that he had actually invented the pet-rock and someone had stolen the idea from him and that he wanted to take our money and seek justice from the ones who actually brought the Pet-Rock to market… Please don’t do that and don’t be “that.”

Or take the example of the CEO and young girl co-founder who was working on an Alzheimers drug that she herself probably needs to be taking, because after interviewing and talking with my pharmaceutical examiner she got into a real fist cuffs fight with him and I had to physically separate them… And all that because my Examiner challenged her on the possibility that her intention of running  un-opposed drug trials would not result in the same values as if she were running the classic double blind trials. She exploded at the mere mention that she might be wrong… and a fight ensued. This is the type of CEO that beats up on the employees first thing in the morning, in order to get the old Morale boost the people need in her world. Apparently this “Management” technique worked well in the old Pirate times, and it still works in the minds of the disturbed managers, and maybe in the Amazon slave camps, but it doesn’t work well anywhere else today. Yet for now am blaming all the Hollywood Pirate movies that have brought it back in fashion…

And however romantic it seems, this pirate boss dressed in startup executive threads, has got to be avoided at all costs. Better send your money straight to Disney, or even to Nigeria to get in on the bottom floor of the latest scam — rather than funding this nut bag.

Between crazies, bitches, pirates, lunatics, and So you get the idea of the kinds of people we see daily.

Or the other jerks that tried to woo me for months, and after the preliminary lunch and the second round of meetings — we made an agreement for Myself and my People to lead their First Round. Mutual celebrations ensued… And then they turned around and asked me for my references.

They are still waiting… for my call back.

I’ll probably catch them on their next StartUp.

That is if heaven wants to have me next to St Peters…

Yours,

Pano

PS:
Even the highly Innovative and seasoned Angel and VC investors are always fearful of Change even if it is a subconscious and basic fear of change that exists within all human beings…

That alone You have to overcome especially if You are making a dramatic move towards a “Future” that nobody has seen before…

And although we fully get it that we need and thrive because of Innovation, something that promises to create a Ne Industry and not just a New Way of Doing Things in a settled industry — we are skeptical. We are skeptical because of a primal fear of dramatic change being able to overcome the existing order of things. Because at the core, change means something is going away… Yet it does not portend that which goes away is going to be replaced by something better…

However the “Present” in it’s current form is reassuring even though we know deep in our minds that the current state, will cease to exist and be transformed as our body’s cellular structure does change every twenty-four hours.

Even the best of scientists still adhor the “going away” side of change because it causes distress.

Additionally, the fact that this particular CHANGE has not arrived yet, is scary because the “not yet” aspect of change disquiets the minds of all concerned. Nature doesn’t like emptiness and vacuums, and as it turns out — Change always creates a vacuum until the new elephants replace the old ones.

But it’s still not here — and the combination of  “going away” and “not yet” here is a powerful deterrent for Change and a massive incentive to stay the course and maintain the status quo.

Since the average age of the Angels and the VCs is more mature than that of the Founders and the young teams of StartUppers — one has to think hard and reason carefully about the philosophical nature of other people’s “Acceptance of Change” and “Suspension of Disbelief.”

So try to always think of these things ahead of Investor meetings, and thus attempt to figure out how You are you going to convince the engineering and analytical nature of the savvy Investors mind to suspend their disbelief about what you clearly promise to create; and also how to convince this “generation of Investors” that the Innovation and the Change you are promising to bring about is Good for the People, acceptable to the Marketplace, and suitable for the Investors, for their firms, and for their profit potential.

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Thankfully we have a few ways to do just that:
1) Respect that people must convince themselves to change. Pressure invites resistance.
2) Explore the value of not changing. Why is it important not to change?
3) Create reasons to change and also find people’s reasons for embracing change.
4) Find out why, and explain why the present path is unacceptable?
5) Make the reasons for Change meaningful to the Investors and the People.
6) Always remember that people change for their reasons, not yours.
7) Don’t demonize the Status Quo and the Present course of Life.
8) Keep in mind that the previous generation gave themselves to build the present.
9) Don’t insult them, and don’t insult their intelligence because you can’t antagonize and influence at the same time.
10) Appeal to their values. Take their perspective before pushing yours.
11) Change in small yet significant ways that don’t “bet the farm” can be a fun way to start and run a pilot program, to get everyone onboard.
12) Ask the previous generation for advice. Make them feel heard. Include them in your decision making tree.
13) Speak to the heart, use facts and figures to validate but not to convince.
14) Don’t ask the previous generation to change. Instead ask them to support you as you lead for dramatic change.
15) Lastly you must temper your enthusiasm, your passion, and your vivid & outspoken lush nature that you might have… Keep your inner “bitch” under control cause if she escapes and she comes out bitching and moaning — You are toast.

Be aware that your passion about your new business may be justified because you eat your own dog food, and drink all of your Cool Aid, but it still is alien and overwhelming to all other people.

And perhaps most important of all this,make sure to not get Mad at the skeptics and the examiners who work for us, and who try to investigate the nuts and bolts of the business, in order to brief us — before we get to decide if we are going to spend our quality time with the likes of You. ;-)

And even if you get upset right about now, and you start losing control and begin looking at them cross-eyed, with full on madness in your mind, and blood in your heart — shut it down and keep it under control. It serves no one to start a fight with our people or with us, when you feel that we don’t “get-it” or that we “don’t-believe” in your business — because that’s the kiss of death in our relationship.

And acting like that you only prove that you are a twat not worth investing our time on Your Sorry Ass. And you can privately remind me of the yoga-bitch who svcked my cok the first time we met in one of my talks [like fans often do] and then when I failed to call her back — she started bitching like a stuck pig that I should be a no good Investor to begin with… because I don’t give a damn about her StartUp.

Go Figure.

All that because I was not — according to her — “responsible-enough” to always be asking, tracking, and supporting her startup rental dream.

How Fvcked is that…

How Crazy.

How much bat-shit madness is flying around in this woman’s old belfry.

What’s cooking up in this woman’s head is anyone’s guess.

As for me I don’t wanna know…

And there are plenty more of where this craziness comes from. Please don’t ever do that. It’s down right ugly. Not cute, Not pretty. Ugly as an unshaved girlfriend who doesn’t believe in French parfumerie and English hygiene — wearing nothing…

Before you start objecting to the use of profane language — please look up in the beginning of this post that I say “We are all Human” and “our Nature” needs to be entertained, loved, sexed up, and rested too.

Simple eh?

We have needs too, and this soft need to relax and hoot the breeze, like mature man in the pub, is just as important as going to the bathroom and taking a crap.

Simple biological need.

Biology trumps everything. Got it?

Now if you are a prude or a puritan left over from the 1600s in the Jonestown settlement of the Pilgrims …  well I don’t know what the fvck you are doing here. Please go back immediately and chase some witches or something — unless your time machine or your mind is broken.

There are better ways to get my attention in order to spend “time” with You than getting mad, and complaining, or shooting from the hip, and offering me proud parent of girls talk, or nasty telephone texts, or passive aggressive invitations that look more like booty calls in the middle of the night — than anything else.

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Capice?

If you don’t get it — I recommend that you come back to my crib and I’ll show you how it’s done…

It’s a Lost Art, and we are here to declare that we need to revive it.

Only the really good professional concubines know how to perform well in that category. And it is a genuine great skill to have for anything you want in Life.

And besides if you learn how to and people know that You know how to give professional grade fellatio, and you also happen to be a comely lass — You’ll go far in Life without much further ado.

I at least, would be falling all over myself to help your “Startup” singing Hallelujah…

Amen to that.

Bill Clinton is a Beaut — Right?

Billie should be the King Felat of “Saudi Arabia”… of Arkansas. Murica still loves him. Incest, moonshine, and all … the Southern Comfort is still here.

In short like everything else in Life getting FUNDED is a Sales job.

And if it rimes with anything that sounds like a B…job, maybe it’s not just an accident.

In California’s La-La land aptly named Holly-Wood they always have this to say: “Give some Head to get A-head”

If you are prudish about this, or afraid to engage in dog sniffing behaviour — Am So Sorry… Hollywood is not place for you. And the same goes for high flying TartUps – StartUps.

But to forestall your objections I’ll apologise in advance for offending you and I’ll also send an email to Charles Darwin to ask him to amend his taxonomy of the Species that has classified human as communal breeders and has set us in the midst of all the other mammalian species as animals.

Pure Animals with a great deal of intelligence. Aspiring to higher things…

The old Charlie must surely change that Classification in the Taxonomy of Species, because the last time I checked — the study of Humans was still called Zoology and we were right there in the Taxonomy of species called Animals… with capital “A” to begin with.

Am not counting on it though because He is retired and resting on his throne in the Museum of Natural History looking down at us poor sods fighting over definitions and forgetting the substance of BEING.

So listen to Darwin because even if you have exalted ideas about yourself — I bet you enjoy the old fellatio when you get it, as he so thoroughly described in the animal observations he wrote about.

Got It?

Or better yet…

Have you gotten any lately?

Posted by: Dr Pano Kroko | August 22, 2015

The Gita

“Bhagavad Gita” is my companion as I start another journey of Life.

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For “Bhagavad Gita” is the only book that I travel with…

The “Bhagavad Gita” in Sanskrit: भगवद्गीता, means “Song of the Lord” often referred to as simply the Gita, is a 700-verse Hindu scripture in Sanskrit that is part of the Hindu epic Mahabharata.

The epic Mahabharata is traditionally ascribed to the Sage Ved Vyasa; the Bhagavad Gita, being a part of the Mahabharata’s Bhisma Parva, is also ascribed to him…

Yet the Gita is relevant to us because it is set in a narrative framework of a dialogue between Pandava prince Arjuna and his guide and charioteer Lord Krishna.

Facing the duty as a warrior to live the “Way,” to fight the Dharma Yudhha or righteous war, between the Princes Pandavas and the Kings Kauravas — Arjuna is counselled by Krishna to “fulfill his Kshatriya (warrior) duty as a warrior by establishing Dharma.”

Inserted in this appeal to “kshatriya dharma” or Chivalry and Honour is “a dialogue … between diverging attitudes concerning and methods toward the attainment of liberation “moksha.”

The Bhagavad Gita was exposed to the world many years ago through Sanjaya. Sanjaya was Dhritarashtra’s advisor and also his charioteer….

The Bhagavad Gita presents a synthesis of the Brahmanical concept of Dharma, theistic bhakti, the yogic ideals of moksha through jnana, bhakti, karma, and Raja Yoga, and Samkhya philosophy.

Yours,
Pano

PS:
Numerous commentaries have been written on the Bhagavad Gita with widely differing views on the essentials.

Vedanta commentators read varying relations between Self and Brahman in the text: Advaita Vedanta sees the non-dualism of Atman (soul) and Brahman as its essence, whereas Bhedabheda and Vishishtadvaita see Atman and Brahman as both different and non-different, and Dvaita sees them as different.

The setting of the Gita in a battlefield has been interpreted as an allegory for the ethical and moral struggles of the human life.

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The Bhagavad Gita‍’​s call for selfless action inspired many leaders of the Indian independence movement including Bal Gangadhar Tilak and Mohandas Karamchand Gandhi.

Mahatma Gandhi referred to “the Gita” as his “spiritual dictionary”.

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Posted by: Dr Pano Kroko | August 20, 2015

INVICTUS = Living Supreme

Today you are in the beginning…

Every day is the beginning.

All of life is a series of moments that make up the thread of beginnings that coallesce into the Lifeline of ours.

And in this Life there are those who lead, and those who follow, and then there are those that are the True Trend creators and the Natural Winners…

Love is the secret motivator that moves all things, and love for self is a huge reason of the success of some people and of the loss of others.

Winners are people that think selfishness is a virtue, while average people think selfishness is a vice. You don’t get rich if you demonize wealth and Your right to prosperity and abundance through hard work and innovative problem solving.

The winners go out there and try to make themselves happy. They don’t try to pretend to save the world in order to mask their desire to be successful behind a facade of Goodwill. If you are rich enough and powerful enough — then you can put your resources in action and solve the World’s problems too. But if you’re not taking care of yourself, you’re not in a position to help anyone else either. You can’t give what you don’t have.

In this selfish quest to make ourselves happy, we have an active mindset, and we go after what we want and problem solve until we achieve it. Each and every moment. Each and every day…

You’re not going to become a Winner, or get saved, or made rich, or be discovered as a genius by an outside force. If you want a lot of money, and a lot of power — go out and build your own ship because no one is coming to your rescue.

The winners not only actively pursue their ambitious life and financial goals until they’re met, but they expect to make money always in quantities that are going to serve them well. Because we know that money is just a measuring stick and you can’t eat money, live with money, or go to bed at night with it. Yet money surely buys a lot of what we need to be functionally free to pursue what really maters to us.

Don’t ask “Why not me?”

Don’t consider that there is some kind of a Supreme Court that serves Justice in Life whenever it sees that if You are as good as anyone else — then you deserve to be winning and then automatically it makes you rich. Sorry… that fantasy only exists in New Age books like those that say the Universe is conspiring to do something or other…

Best to think smart and simple that If I serve others by solving problems, why shouldn’t I be rewarded with a fortune and power in this needful society?

That’s the question to ask and the path to follow. And that’s how you get your rewards. And since we have this belief, our behaviour moves us rather fast, towards Victory, and the manifestation of whatever dreams we hold dear.

Only Love of Self motivates a person to put the endless moments of effort, the hours or passion, the days of rigor, the weeks of endless work, the months of effort, and the years of hardship that make Life a truly brilliant Success.

What appears as a Natural Win is always “Seven Years in the Making” and it has always taken an enormous amount of Energy to get there.

So be patient…

And be grateful, because being Grateful for Everything that comes down the pike is a sure sign that You know how to live Life and win Big.

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But to be a Winner and to live Supreme, you ought to be Grateful for the smallest of things. Be Grateful for being able to breathe and to live. Be grateful, because you are able to work and have a Life. Be grateful because True Success is not about being an egomaniac but rather about being an Ergomaniac.

Ergomaniacs are those of us who love to work since what we do is our passion and our calling; being fully steeped in the meaning of Life, without having constant questions propping up. Questions that bedeviled other simpler folks, like “What the fvck our purpose is being here?” and all that new age purpose BS asked of those stoners smoking all their dope and losing their purpose of being. Our Raison D’Etre is clear to us and it is based on our need to live well, to reproduce successfully, to work effectively, and to win massively. We know that. And we also know that being an Ergomaniac is golden, because everyday is a celebration, and You live the way You like it, instead of waiting for some distant happy end to come your way…

No successful person ever wants to retire…

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As an Ergomaniac, I can attest that we live joyfully through the challenges, just as we would through the Good Times, whenever they appear. And we don’t take anything personal. Mind You we don’t get used to things either, because they will surely change soonest.

You can live like an Ergomaniac too. The only thing You need is to open your eyes to the wonder of life, to see the humour and the magic in each moment and to live in that moment. Work hard and be happy in your work. And know your purpose without waiting for some televangelist or a hippy-stoner to tell you what your purpose in this Life is. Happy or not, ready or not, dressed-up or not — here we go. This is our gig: The Moment. And then we go LIVE. We live each and every moment like Kings and Queens of our world.

Do this and you’ll see how You’ll win all the time and be successful on whatever you do and how You shall stay delighted in the way things turn out for You. And then the only thing remaining is to keep being Grateful and observing with amazement the beauty of it all.

Yet always, but always You should remain GRATEFUL for whatever…

Good or Not So Good…

As for me — love me or hate me, one thing is for sure — You can learn from Me. That’s why You are reading this in the first place. Because You want to learn how to be a Leader from a real Leader. And maybe along the way You shall learn how to live decently and how to work hard too…

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Yet You must learn not only by reading this but by applying these principles in your Life today, because all of You Leaders & Entrepreneurs out there, can learn a few new things about success and leadership. You can gain from my example setting Life and Business acumen, same as you can follow my path carving leadership experience. But pay attention to learn from my mistakes too; so you can go out and make some new ones, purely Your own. And then share your stories so we can all learn some more and avoid the new traps that spring on our road to success every day.

And while I continue to make headlines for my aggressive campaigns to save the Hearts of the American people, and even all the folks around the world; You can enjoy the benefit of my heart saving Medicine. Or even if you disagree with my position on the warming planet and on our advancing Climate Change and incoming Climate Chaos — you can’t but admire my tireless efforts and investment to help keep our Commons as the Environment, the Atmosphere, the Lands and the Oceans — healthy and viable, for all the People. And the thing is that You’ll enjoy the benefits of my work regardless… of whether you value my contribution or not.

Because I always Open Source my contributions to Humanity same as I did with the Wi-Fi code that became the industry standard for wireless internet that now exists in all of your devices. And I did the same with the Environmental Policy so that it now exists in front of all Legislators and Parliaments around the World, thus creating an open Source Standard for Environmental Policy and a Darwinian playing field where the best and the brightest builders of the Green Economy can compete freely and win the future for all of us.

And even if you feel that through my work with the Environmental Parliament, we ought to tone it down and submit to the rules of politesse and political correctness in order to support the Un-negotiations and all other such babe-in-the-woods innocent, ineffective, and largely doomed to fail efforts — You’ve got to hand it to us for running the Marathon of the gauntlets and staying TRUE BLUE, unlike the others that were killed or altered and shaped like old polite ladies. Organizations like Greenpeace, like WWF, and like the Rainforest Coalition RAN, they have all become the apologists of industry and corporate greenwashers in order to get money to survive and to mount high profile “comedies” and “Drama”. They have managed to become the Avon-ladies of the Environment, and thus largely and completely ineffective.

And even if you are an Englishman, or a Britisher, or a Greek, or even a German, or an irrelevant observer of the European Union Project — You must admit that my involvement as the Founder of the European Democratic Party makes the whole thing more viable as an alternative to the warring states of “A Thousand Years” for all of the Old Continent, to survive in peace.

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As you might have guessed by now — I am not afraid of making headlines.

I don’t shy away from conflict and have never been a wallflower. So if you are reading this and you consider yourself an American fellow patriot, then you must appreciate the Leadership candor of my views and policy implementations offered to our Representatives in Washington through the work of the Environmental Parliament. Some day we’ll get the Green Economy policies right in these United States but until then we’ll be chipping away at the old block…

And even if you are Chinese and disagree with my harsh criticism of the party’s restrictions on Liberty and Democracy — you can still learn by how I go about treating the Hearts of the wealthy developed nations, and how I choose to treat the poor People’s hearts, and the poor nation’s hearts for free. So follow in my footsteps and see how we can cure heart disease in the billion and a half people living in China and remove the corruption from the Body Politic too.

Because if we choose to offer the same techniques and the same Medicine for the wealthy people, and for the poor people — politics aside — we will set a pattern of Change that only Democracy can handle, and People around the world can easily see that. Then it might become easier to see why my services working for the HEART HEALTH of all the people is indispensable.

And because I am a natural leader, with the Leadership education to be able to manage to do my Good Will and Help People while making a huge business success too — this is a repeatable experience.

And let’s not forget that I am an unrepentant philanthropist too. And a Philosopher too where Economics, Business, and Politics intersect, and need my services…

Since most all of my thought processes, attitudes, and no-holds-barred pugilistic style, are all about winning, while always learning and passing on the lessons for everyone else participating in the business of this game called Life.

Another great way to distinguish world-class fighters and winners from the average people out there is confidence. If You are the epitome of believing in oneself, so much so that it’s almost a fault — then you can tone it down. But I believe that You have way to go before that moment in time, especially if you are not n the map yet.

So to ask you a question: “Do you think you could really tell me, that something is impossible or that I won’t succeed?”

Never.

Believe in yourself…

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Believe in yourself because most entrepreneurs sell themselves far too short, and they don’t reach their full potential because they lack the belief in themselves and their abilities. But above all else they lack the Self Love that makes everything possible.

Yet this love of self is the basis of making yourself more appealing to Victory. It’s a process, that requires a major shift in thinking, and that shift has the potential to catapult you to a new level of success. You can suddenly grow in exponential ways by keeping track of the words you say to yourself and the Love you exhibit to you. Never underestimate the power of thoughts, Thoughts formulated in spoken words, become real as soon as they hit the Ether. And then your positivity or negativity as the case might be, will show up clearly as a mirror image of your Life. You can do this is all you want if that’s what it takes to believe — but make it real in your Life if you want to succeed in getting to whatever might be your Dream . Keep track and see how you’ll be surprised by the frequency of how many times in one day you say things like “I can’t” and “That’s impossible” and then consider how many times this stops you in your tracks. I see this all around me with naysayers that I soon enough fire off the company and send them to the world to learn this lesson and if they change — then I have a place for them to come back to, that it will be far more important and demanding than their position before.

So cut out the negativity. Now and forever. Make a breakthrough to positivity. Do this and then you can become infectious with Optimism. Choose optimism because it hardwires your brain for success. Stop being a walking judge of failure, and instead replace the negative thoughts and words with Self-Love and with positive outcomes, like “I can do this” and “This is Easy” and “We are all Winners but I am the Leader of the Team” and thus become responsible for your Success and Victory and the Team’s Winnings will be credited to You.

Be a Champion… always. Always and in all of your endeavours.

Let people badmouth You and even bet against you. Let the fools and the losers take sizable bets in deals going against You…

You just keep steady. Steady same and Stay Strong. Keep fighting and don’t worry. Because if you’ve done your homework you need not be afraid of anything, as there’s an old saying among world class Champions and Leaders: “A bet against a champion is a bad bet.” And it holds true all of the time, because most people quickly become demoralized by the normal setbacks and defeats existent in all games, and quickly sink back into their comfort zones. But the Champions never do. They practice through defeats to get to the Victory by saving their energies to fight another day…

Getting out of the comfort zone and stretching the envelope of happiness and discomfort is what makes you unique. That is the Champion’s secret sauce. Same as the greatest entrepreneurs who know that large-scale success is based on a series of mistakes, setbacks, loses, and eventual huge comebacks. All great Champions start out as the underdogs beaten defeated and dropped for dead. And then they rise up like the phoenix rising up from the ashes.

Instead look at the amateurs who before jumping into the fray of the Fight — they always hedge their bets. They pray to their Gods for Victory and leave it at that. Then they always make the mistake of counting the pros and the cons, and weighing out the merits of going on, or falling back, and stopping trying & fighting, and of course they give up the game when things get tough. So they go home crying to Momma, while the tough ones keep on trekking. The Champions keep going until the end. It is not because the champions are made tough and don’t understand what giving up is — but it is because the mindset of the Champion is hardwired to continue fighting without giving up.

Proof of that is that the true champions continue to fail… and they fail again and again, yet keep coming back for more. Until the day that they win…

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Failing Forward is what we call it. And after some hundreds of companies I’ve invested into, taught, or started up, as an Entrepreneur, and a Co-Founder, or the main Founder; I’ve got some experience into having failed; and I’ve got the scars and the bling of some great SUCCESSES to show for that too.

Cause sometimes by losing a battle you find a new way to win the war. And making sure to live to fight another day is the important differentiator here.

So take nothing personal. Not the Victories, and not the Successes either. But personalize the lessons of each and every failure so that You do not repeat them ever again. And that’s how failure can be your greatest ally. Failure teaches you things about yourself and about the world around you — that nobody else will…

But please don’t take failure, negative-praise, or even tragedy, personally. It is neither personal nor permanent. Things always CHANGE…

Consider that every backwash is nothing more but another step in the right direction.
People’s negative-praise, is just that: Praise.

People are projecting onto You their own unrealized hopes and dreams, as they see you fighting in Life. And negative-praise is not bad because it gets your name out there and the Conversation gets started. From then on as the perennial scrappy underdog that I am — I always see the path to Victory and to my eventual blockbuster “NIKE” the Big WIN.

But there are always massive Contests that You are pitted against opponents and odds that are massively stacked against you, be it Institutional and Big Corporate stupidity and inability to Change, or the Political Status Quo — and for those you need the skills of Napoleon to defeat them.

Your partners and all others might run scared because they are not able to judge or even come close to estimating the reality of the battle or of your Dynamic Life. So they may abandon you and trash talk you when they switch sides. Don’t mind their weakness. It’s all human.
After all you cannot take personal anything they might say. For me all of my Enemies are nothing but misguided Friends. And that keeps me REAL.

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I don’t care if people like me or not, because wanting People to Like you is as valuable as receiving Likes on Facebook. Totally worthless. Maybe it stems from wanting your Mommy to like You, or your mates, or your school friends, or your dates, or your bedmates, or the citizens or whatever… But unless you are not running for “Office” this is daft.  Politicians make a decent effort to be liked because they are like whores begging for your Vote, so they make an effort to be liked by the masses. Of course You have a tacit agreement that after they get into “Office” they promptly forget you. And they in turn vote only for their special interests and for the issues, their gold-plated  lobbyists briefed them on. It’s fair because Money & Power go hand in hand. And if the lobbyists gave them the most greenbucks to get to where they are, and you didn’t — why are you crying foul?

Therefore wanting to be liked by simpletons, unless you are Mother Teresa or Kim Kardashian is utterly foolish. People will never make you a Hero but will most likely make you a Loser. They do this automatically because “small minds” are negative since they cannot hold “Big Ideas” and “Big Thoughts” inside. You see trusting the People tp Like You is hopeless, because they will examine and search and waste their lives to find justifications, to judge you and dislike you, even if it’s just to compensate for their own small mind and incompetence… So that is what they project. So please don’t bother seeking People to LIKE YOU, unless you are one like them. And in that case you fall into the Paris Hilton and the Kim Kardashian category and you have to start making your “amateur” porn tapes to unleash on the Internet in order to become “Famous”

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Of course be aware, and take care, because that might result in your spending zillions of hours in untold misery detailing your Mommy addiction and “telling” this to bearded and sleepy strangers, while laying in the couch of Sigmund Freud. Approval addiction stems from believing, “I won’t be loved or accepted unless others approve of my behavior.” And it starts from your Mommy addiction. Swear, this is what all of Sigmund Freud’s psychoanalysis and the “couchsurfing” is all about. It’s seeking conformity at all costs.

Yet we all know that seeking conformity in life, in business, and in thought — always results in abject & dismal mediocrity. And if this is your idea of Life – go at it. But in my book this sounds like being buried alive.

And you do this yourself. Straight up. You seek Conformity and you censor your thoughts, your words and your deeds– ergo You have your own Negativity ruling your Life. It’s like having your own private-thought-police always running your Life. This is what your negative mind running amok, and your self censoring attitude because You want to be “liked” results into. And of course it will diminish all of your contributions to Family, Business, and Society, and hold you back from making any meaningful contribution.

Careful of this giant self-laid trap because I’ve seen it take over the lives of even the most talented and innovative entrepreneurs and turn them from success to crying failures.

In other contexts it’s called “The Fear of Success” but it’s pure Freudian simile and it goes far deeper than that.

And it’s always been that way, because it’s an outer frame of reference which values the opinions of others above your own.

A winner like the undersigned is the ultimate example of not worrying about what other people think, and this is just one of the many reasons why I am so successful.

Some people will berate your abilities and bitch at You — but let them be, because they are like the broads that have blown you off, and then complain that You don’t call them back… My explanation is simple: If they suck good — I’ll remember them. If not…

Remember, you are still to be honest and forward thinking as a Man and always be responsible to your family, to your people, to your employees, to customers, to clients, to investors, and to all those associated with You. But You don’t have to apologize to anyone for your behaviour when you seemingly fall off the pedestal — in these people’s eyes.

Though to be able to say “Am Sorry” to those you hurt directly [hopefully inadvertently] is divine, and to be truly honest, sincere, and to act with integrity is a sign of being a true leader — it doesn’t mean that you go about Life mumbling excuses every time you step on someone’s foot. Having big shoes to fill means you step on someone’s toes some of the time. It simply goes with the territory. And that act alone always invites the trolls. You win a business deal — the Losers bitch. You lose a big deal — the judges croon. You win and lose some or other big or small deals, and the assorted trolls, haters, & slimmy naysayers’ shrill voices triumph. Bitches hate you. Bitches Love You. But the important thing is that nobody remains indifferent…

So what’s a man to do?

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Ask the President of the United States to see if he cares that more than half of the people are vehemently against him most of the time. Hell No. The Prez doesn’t give a flying fvck, because there are some far bigger worries in his mind and issues of State that demand his unwavering attention. Still there are some Losers out there looking for his birth certificate seven years after he proved himself more than worthy for the job…

Keep that in mind next time somebody trolls you on the internet. Being attacked and written about in the Internet is a true sign of Honour because you are at least doing something. Being famous is also an important litmus test to see how You handle the regular stress of rabid fans, stalkers, trolls, hooligans, extremists, haters, losers, straight up fans, debuttantes, & dilettantes.

And unless You are Kim Kardashian needing to air your personal porn tape in order to become famous — try to abstain from having personal and naked moments on Youtube. But still always be open and try to exercise brutal honesty in all the public facing areas of your life because it saves time and really gives value to all those involved. Honesty cuts down the BS and makes business exchanges a song.

So keep at it. Sing hallelujah in business and do it at a great clip. And as always make the team sing it too. Because business like football is a team game. Make harmonious music with others if you want to win…

But your private life — keep it as private as possible to protect it from the over abundance of fans, stalkers, haters, and trolls.

Stay truly honest even if in the beginning it ruffles the feathers of all those flightless slugs, that you have no business being in league with in the first place… Because doing business with the big flying birds of prey out there is your true calling. Birds of a feather and all… stay with your League, because the “Real Players” have no problem with your abundant bravado and your exercise of Leadership, or with the brutal truth, since they understand the value it brings to all of our lives.

Being nice is not all that’s cracked up to be… Ask any beautiful woman and she will prove the truth in this. Better yet observe. Because even if you don’t know any stunning beauties, or don’t have the balls to ask the famous models such questions — just observe to see what kinds of guys they screw, whom they marry, and what type of men they hang with…

Capice?

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You are not here on earth to be liked.

Don’t fish for compliments. On the Internet or off the Internet. In real life or in Second Life. In Reality or in Virtual Reality. Never seek acceptance and the like…

It’s the kiss of death for a Leader. You can’t lead following the polls… unless your name is Billie Clinton. And You can see where all that got him. Married to a pantsuit and blowing a blue dress… the Elvis Presley impersonator of politics.

Don’t do that.

Just do your job.

This life is not a serial dog and pony, beauty show.

This t is not a popularity contest for Miss Universe either.

Life is not a Beauty Queen show either.

Even if you are interviewing for a Cheerleader position — you have to be able to dance — but You don’t have to be liked.

You are not seeking to be liked by everyone out there; but only by those that You are directly responsible for. Even then it’s best to be respected than to be liked. Random people’s attitudes or behaviours towards you, are their problem.

And don’t ever ever wish for World Peace if you win your Contest – whatever that may be.

Even when President Obama received the Nobel Peace Prize — he didn’t.

So unless you are a beauty pageant contestant — don’t wish for World Peace. Just go out there and do your best to bring it about. But please do so quietly…

And after many years of hard work and fame, hopefully people in general will like you. All those overnight successes are about fifteen to twenty years in the making. Maybe the People that matter will like and respect You. As for the ones who don’t matter — you don’t care about.

For the public out there, even if they don’t like you — trust me — it’s not your problem.

Haters have enough of a problem to deal with in their own lives without having You to heap pity and scorn upon them. Just Ignore them. Haters hate because that’s what they do. First they hate their own lives and then everyone else’s too. Trolls troll because that’s what they do. Troll-bloggers are famous for this. Sitting alone in their Momma’s basement, they unleash their frustration, their incompetence, and their toxic venom, all piled high in their brains from not being laid since childbirth. And they lay it on upon the Better People out there.

News Flash: You don’t have to accept that “gift” because it’s radioactive and because it’s best to let them enjoy the half life of seven thousand years of radiation in their head. That’s what cancers comes from. People who have nothing good to say about anyone else are marking themselves for a swift downfall. But if you have never accomplished anything in your Life — your fall cannot be too dramatic.

Oscar Wilde always said that the haters are actually “working for you” because they perpetuate your name in the media. And that’s a good thing. But then again old Oscar said a lot of things…

Still, Karma is a bitch…

A Fair Bitch — but still a Bitch.

Just observe how it works through your Life.

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As simple as it sounds, many times the only thing that separates winners from losers is minding your own business. Minding your own business means keeping your nose on the grindstone. And that is pure driven determination. Producing copious amounts of Sweat Equity helps. Not getting sidetracked through other people’s neediness, selfish affirmation, or direction, because they have not seen what you’ve seen — is key here. You need to stay the course and allow your evangelists and head cheerleaders to help get the direction across to the teams of subordinates. Delegate – delegate – delegate. Because large teams need to fall in step behind the Leader and for that you need some really good shepherd “dogs” to assist you in herding the flock and putting them in the right direction.

How can anyone who doesn’t see the horizon claim to know what lies beyond?

How can you debate where True North lays unless you are using the magnetic Compass accurately?

How can you score a map chart accurately at night, unless you have the benefit of the Astrolabe Celestial Navigation?

How can you tread new paths over hostile ground without the aid of accurate navigation tools?

And that is what happens when you are lost…

GPS with fresh batteries and a NavSat phone will suffice…

But without it — You can neither plot the course — nor discuss it, nor argue about it.

And certainly You cannot fault the navigator if You don’t understand their chosen path.

Get off the boat if You don’t agree, but should you want to and should you choose to stay — then You have to trust the instincts of the Ones who plot charts for a living.

And do that happily because You’ve got to keep in mind that even a tiny degree of deviation from the True North goal of an Organization, results in hundreds if not thousands of miles of off-course deviance when you fly around the world at high altitude and high speeds. So instead of being a back seat pilot — try to keep quiet and stay productive to the team and to the ultimate goal. That is if you want to arrive to the intended destination unscathed.

And the destination is always Victory.

Once you get there — You celebrate.

And today’s winners are always team players. Because while the winning difference may be slight, the thought process that makes the difference and brings about the “WIN” — that is huge.

And as for choosing appropriate help — the Warriors amongst us — we all know that it is the quality of the Team that matters and not the size of it. Try hundreds of people if need arises, and fire them all swiftly and only keep the Great ones because the other ones are like dead weight and will drag you down.

As proof of that is that amateurs spend a substantial amount of time negotiating with other low quality people to build a numerically large team and then they collectively go out of their way to bicker and negotiate the spoils of victory without prosecuting the war. And then they continue to discuss and negotiate the potential price of victory — ad infinitum. All that at the time that the True Warrior, the Professional, get a small and highly qualified team and just nail it. The real winners, get to the Victory Lap before even the most successful amongst us have even considered, let alone made the decision to pay any price, and bear any burden, in the name of our chosen victory.

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Life is a bridge and you need to keep on moving and growing to cross it. Nobody makes their house on the bridge. You’ve got to keep on crossing and learn that movement is what gets you across, and what keeps you growing on day in and day out. Keep growing by moving and changing constantly. Stasis is death. Change is Growth. Growth is Life…

Winners know that equation rather well. Losers … not so much.

And they keep on asking me Why are you doing this?

Am doing this because much like all the other champions fighting the Good Fight — we are the real Men fighting in the Arena to achieve something we see as important. Sometimes even the prize might not matter, but the Victory always does.

We are the charioteers, the athletes, the gladiators, the champions… because we choose to step out there and that’s how we like it. Whether we learned to like it, or we always liked the Good Fight it doesn’t matter. As of this writing we still seem to like it…

So we are still doing it. We are the true warriors of this world.

Look, Observe, and Learn.

Our outstanding preparation and seven years long practice is what makes us unstoppable and ferocious on any competitive field. To me it’s not about winning that’s everything, but wanting to win is. That sweet victory is based on my principles and on my communnally held values. Victory for me is the True North.

Most people will do almost anything to avoid conflict. It’s safe to say that I do not welcome it either — but if it comes my way — I embrace it fully. I thrive in it and see conflict not as a threat, but as an opportunity to gain a three-dimensional perspective on a problem and fight it out always knowing that in a Darwinian playing field — I will win. My ideas will win. My projections and my Business Acumen will win. My plans will carry the day and my Mental Assumptions and Designs will carry the day over anyone else’s plans. Myself much like all other champions; we see conflict only as an obstacle to be overcome. We focus on the underlying problem and not on any emotions thereof, I use problems and the resultant conflict as a healthy function of checks and balances in Life, in Competition, and in Business, same as they are in Politics and Love. And if all is Fair in War and Love, so be it in Peace and Work. Let’s win this Challenge is my normal cry. And then we rally the Team and we win.

Unfortunately there are a lot of business leaders who suppress conflict, and who are too tightly bound to allow this fantastic opportunity for growth to come within reach… And thus they fail without even trying to fight. They negotiate themselves to a Loss and an Early Grave.

When I am asked — I tell them that you need to welcome and embrace conflict, because only then you are destined to evolve exponentially. Out of the cauldron of Fire is how You get the true Gold. You can’t get Gold out of the gossip mill…

I like thinking laterally and out of the box, same as I like thinking and acting big and I love acting upon the Big Ideas. I like Networking all elements of my Success and that includes people. I always connect because People are my Chief Capital. If I use it well — it multiplies. If not it gets squandered and diminishes. But you’ve got to keep it pure. Remove the losers and care enough to protect it from being polluted or made lazy. Use this exemplary capital to create results and amazing bottom-lines that will not be found anywhere else. Work it like You are working yourself.

I am working hard all the time, and thus I am the personification of an Ergomaniac, because acting Big is nothing — but Winning Big is everything. And the eye on the prize is a good place to start… Win it all. And don’t mind the Bollocks, because winning of course invites all kinds of criticism, naysayers, fear mongers, and scardy cats, to want to love and hate you at the same time. Because what are these hateful attacks but unrequited and misguided love turned toxic. Still, You’ve got to be ready for that. Don’t worry it’s just a test of your mettle. The puss that seeps from these poor people’s wounds into their expression of hateful love towards you is their problem. And unless you are tested continuously — how are people going to know what kind of metal you are made of?

So if you’re going to be Victorious don’t be afraid of fighting, or losing battles, or setbacks, and challenges. They are all designed to make you, not break you. But before each major battle try to always be mentally “undefeated” — right before the battle. Do this … in anything you do in Life.

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Winning is mainly a mental attitude borne out of an Ergomaniacs rigorous and disciplined work habits.

True Ergomaniacs hate fame and like to be respected, if not feared. So they are not ‘available” to hang with You. They don’t respond to your emails, telephone calls and the like…

That is not uncommon in the Venture Capital and the Private Equity world, but in the early stage StartUp Angel investor world, it is incumbent to be unreachable because otherwise you will waste all of your time with the “unfundable” ones, with loser juniors playing the CEO, and with those StartUps that You don’t want to invest into at any cost. So give them the Truth and cut them loose. Don’t waste any time trying to fix anybody. You can’t. And there are professionals for that — You are Not.

I Believe in Good Karma because I have seen good gestures being returned 1000 times fold, if not more.

I believe in Change, because I have seen many entrepreneurs refusing to change. and have seen those who are trying very hard not to change, and they always collapse. So I change often and constantly evolving to a better place, always helped by my team whom I can rely upon to bring me back to earth and reality, from my all too frequent flights of fancy. But having said that, I know that everything around me will keep changing for the better and we will always be more successful than the last time we tried. As long as I can feel my ‘centerdness’ – acutely, deeply and vehemently, I know everything will be fine and we’ll keep on growing.

Take your time and gather experiences, people, and connect with everything in Life. Don’t suffer fools willingly because it’s far better to be a little hated and rich, rather than loved and bleeding money, or famous with losing investments, and with your StartUps dying all over the place.

And that is the hierarchy of Needs and Rewards, in the early stage finance culture of today: The more important you are, the less you need to be liked, and the less you need to be liked, the less you need to be seen.

So stay under the radar my young Grasshoppers. Stay quiet and stay productive. You don’t need to be famous to be the Winner of the heap… At least those who don’t need to know they don’t need to know who you are. Let them guess. Let the perpetual losers always ask “Who Are you?”

No ned to answer… because these folks are like “The Sisters of Perpetual Indulgence” — they always want more flesh to consume just to be satiated. Except your love muscle isn’t reserved for the likes of them, so stay under the radar.

When some errant “friends” are always asking me this silly-girl type of question: “Who Are You?” I always answer with my typical pass: “Just A Tourist”

They immediately think that  am pulling a Mickey and joking with them, but am dead serious.

As “A Tourist” I get to fly in and fly out. And I get to do that all the time without attachments. Do this frequently and you get to see all that matters without getting caught in the weeds. Rolling stones gather No-Moss. So I don’t get tainted with the local false idols, or the peasant beliefs in the local church or perpetual false financial indulgence. I need to profess no allegiance to any local hegemons, nor do I subject myself to the local rules and superstitions, and I need not eat the local dog food. I need not drink the local cool-aid either and I don’t need to get drunk on the local grog with the stupid hommies as they all do.

So my eyesight remains clear and untainted by anyone’s coloured lenses.

As “a Tourist” I get to fly above the very top of the pyramid, seeing everything and not being attached to anything. And like a bird of pray — we fly high solo, up there where the true masters of the StartUp ANgel Capital and of the Venture Capital markets fly, who are famous for not wanting fame, wasting time, or sharing deals. And I manage this way to be at the top of the pyramid in many different City Markets for the Early Stage Company Finance without ruffling the feathers of the local Cains. Our keen desire to stay under the radar of the public is a signal of how really important we are. Our ability to be free from taintment, free from cameras, free from being interviewed, free from news, free from photos, and generally free from publicity — makes free from the earthly tethers that suck us down to earth.

We ride the thermals way up in the sky and never bother with the hoi poloi insecurities and lack of nerve.

Our distaste for fame is the opposite of the Kim Kardashians out there who would do anything to gain fame. Ergo the Sex Tapes…

Still you would think that in our carefree way living large and practicing fame avoidance, we often morph into elusive curmudgeons, living highly private lives hidden into outright secrecy. Nothing could be further from the Truth. And this is always true, especially amongst the leading Angel Capital Funder jet-set. We live the Air to Air lifestyle, and thus we have to enjoy Life and Speed, but we also have to have some peace of mind when we touch down in our preferred cities. It is our privilege after all to enjoy some well earned R&R every once in a while…

So please leave us in Peace…

Not only because we need it, but because we want to reflect, recuperate and collect our Thoughts.

One needs to quietly sit and think alone because the Success we so highly value comes from deep reflection and deep meditation upon the subjects that matter to us.

After all I love to reflect and think deeply in silence my next moves. Always taking a moment to prepare mentally for my battles, ages before they ever happen. And that’s How You WIn.

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And that’s why I sit under the tree alone thinking. Thinking, and quietly reflecting, meditating, as if the world doesn’t exist. You see now why we avoid fame. Because You can’t do this when you are famous. And fame seeking is a sure sign of weakness, for our set of Winners. In the early stage StartUp Investment world, fame seeking is an oxymoron, and the opposite of success. And if secrecy is a sign of success too, then the large PR efforts of some firms and individuals are a sure sign of a giant Fail.

This is succinctly explained when you see that the True masters of the early stage investment markets don’t need anyone else’s help to do their deals. We easily absorb the whole of our StartUps rounds and then we pass the baby on to the institutionals we’ve working with forever. We can divine the secrets behind the frenzy of startups coming up on our screen, by finding the hidden order in the randomness, discerning the Quantum Entanglement and reading the patterns and the true intelligence spots, and then turning that into Alchemist’s quicksilver, and soon enough into gold.

That’s how it’s done. And if you think you have that secret quality of Early stage Success spotting in Science and Technology StartUps — then keep it to yourself, go fund them, and direct them to execute and iterate gaining massive market share in new and ground breaking businesses or in disrupting old and tame industries. Yet try to do this work quietly, because it’s stupid to tell others about your business plans or to open up your kimono — unless you are about to be blown ;-) … Especially avoid opening up your kimono because by telling the world what You are doing — in essence, you are divulging your secret divination rod findings, for free. So shut the fvck up and execute.

Who do you think You are to dispense company investment specific advise or to talk up a round. The first thing is improper and probably in some daft financial religion highly immoral, and the second is straight up — illegal. And at any rate people don’t respect Free Advise. So keep it to yourself and if you are going to share with some people — then make sure they also know the code and keep it secret because if you want to share — you can charge some huge fees for that. Fees that only folks like “The Institutionals” can afford to pay, and they are more than willing to spot You, in order to share in the feast. Knowledge is Power. Advance Market Information is the gateway to this Power arising from the benefits of your special knowledge and from your super-powers of pattern recognition.

Hone that skill everyday.

As for those shark-tank, bird-nest, and dragon-den, dilettantes — forget it. Forget them because they are just celebrity participants and the so called early stage investors, are just “stage” personalities. THey are folks made for TV and people on TV giving StartUps investment advice are just play acting.

So … please don’t get me started.

Are they fools or not?

Pray tell — what do you think?

They are either special fools who don’t know anything and pretend to know it all, or they’re simpletons who know something and are going on TV to become famous and fulfill some tiny ego desire down there.

Either way — they are fools.

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And it’s a good thing to know where others are, in order to be able to gauge your mental powers. Sport your powers, because you should always know that any Victory worth having, comes first in the mind. It arrives in the mind, and then it is felt in the body, where it’s so real — You will not only feel it but you can also taste it…

All of this going on, well before the day of the actual battle has even arrived.

Be mentally prepared.

That’s how you win consistently.

And then You maybe become known as myself has been called: A CHAMPION.

Yet true champions always work it. Practice, practice, practice…

So go out there and play the Game of Life and Win it.

NIKE = Victory.

Write that across your forehead with a stencil.

And if you are so inclined, INVICTUS is a good tattoo to wear around your heart.

Cheers

Yours,

Pano

PS:

Always have your acceptance speech ready.

Remember don’t belittle people’s intelligence, nor the concept of world peace by arguing for it… but make sure to Thank everyone, and always remember those who made Victory possible.

ANd make certain to Thank all the others before starting the Thank You song towards your Momma, your Lovely, and your family.

Thanking everyone in Your team means that they deserve the medal and the acceptance just as much as You are.

And You know it…

Be unapologetic about Your Game — but Thank everyone in your team.

Asking anything of anybody and thinking anything about Yourself and Your Victory, means that You think really big, and that You know how to ask for the really big things out of Life, and out of Yourself.

But also make sure that you are thinking openly, widely, and laterally, because only when You are truly out of the box — You can lead in a big way.

And no matter what you think, there are many lessons to be learned from my leadership style and my bold approach to life and business.

But take to heart this last important lesson too, because You can’t fake True Leadership, anymore than You can fake the True Warrior behaviour or the real winner personality and Champion skills.

And just make sure to accept ad welcome anything and everything that comes your way because acceptance gives us the experience of being like an angel: never judging, never criticizing, and never worrying about anything…

Always accept because there aren’t enough last minutes in Life to find moments that will allow you to make a New beginning, if you are not accepting whatever comes your way.

Remember that.

“Some people grow, other people swell. You’d better figure out who you are.”

— John Weinberg,

— Chairman

— Goldman Sachs, 1976 – 1990.

— “The Golden Years of Investment Banking.”

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Posted by: Dr Pano Kroko | August 14, 2015

I once had a thousand desires…

“I once had a thousand desires…

But in my one desire to know you,

all else melted away.”

–Rumi

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