Venture Hacks

… a founder, a VC, and his Associate negotiate a down round. Very NSFW.

Video: Old Face Andre talks economics with Omar

Another business lesson from The Wire — about intellectual property: “It ain’t about right, it’s about money.”

We’re blown away by the support for StartupList and AngelList.

Thank you to TechCrunch, Business Insider, and ReadWriteWeb for describing these lists better than we could.

Thank you to the well-known investors, successful entrepreneurs, and up-and-coming entrepreneurs discussing these lists on Twitter.

Widget: Twitter discussion about AngelList and StartupList

New angels on AngelList

75 new angels have applied to AngelList. We’re going through the applications one-by-one. I added some great investors today:

Chris DeVore from Founders Co-op
Robin Klein in London
Thomas Korte, an investor in Heroku
David Shen, an investor in bit.ly
David Rose, a New Yorker with 75 angel investments
Shervin Pishevar, founder of SGN
Pejman Nozad, an investor in Dropbox

And I didn’t even know these three entrepreneurs were angels until they applied to AngelList:

Jeremy Stoppelman, founder of Yelp
Joe Greenstein, founder of Flixster
Aaron Patzer, founder of Mint

Silicon Valley has a tradition where entrepreneurs start investing as soon as they can — and that tradition is spreading to the rest of the world.

Startups are getting intros

Since we released StartupList on Twitter a few weeks ago, we’ve introduced 7 startups to 11 investors. With their permission, here’s a list of investors who’ve gotten intros:

Jeff Clavier (Angel in Mint)
Bill Lee (Angel in Posterous)
Mike Hirshland (Polaris)
Chris Yeh (Angel in AppJet)
Naval Ravikant (Angel in Twitter)
Jeff Fagnan (Atlas)
Brian Norgard (Angel in ad.ly)
George Zachary (Charles River)
Alex Finkelstein (Spark Capital)
David Cohen (Techstars)
Matt Mullenweg (Angel in DailyBurn)

How to get on StartupList

We’ve received 50 new pitches from startups. If you’ve got a good pitch, don’t worry about getting lost in the noise. A good pitch will stand out — and we will find a way to help that startup through StartupList or something else. If you’ve got a great startup on your hands, people will insist on helping you out.

Yesterday, we published guidelines for applying to StartupList. We said we look for the same things that early stage investors look for: traction, social proof, and team. But we didn’t mention another critical piece of the puzzle: the quality of the pitch itself.

Spend time writing and re-writing an awesome elevator pitch. Our elevator pitch template is a good place to start. Then get feedback from good writers — writers who have fans. You have 100% control over the quality of your pitch and there’s no reason not to kick its ass.

Apply to StartupList. Browse AngelList. And enjoy the weekend.

Yesterday, we launched AngelList, a curated list of angel investors, representing $80M going into early-stage startups this year.

Today, we’re launching a cool new way to get intros to these angels: StartupList. It’s a weekly email we send to AngelList, with 3 high-quality startups who want intros. Here’s how it works: you send us your pitch, we review it and, every Monday, we email the best 3 startups of the week to AngelList.

StartupList is already getting meetings for startups

I’m psyched because StartupList is already working. We released it on Twitter a few weeks ago and 9 investors like Mike Hirshland (Polaris), Matt Mullenweg (Founder of WordPress), and David Cohen (Techstars) have already asked for intros to 7 early-stage startups and counting. See the full list of investors who have gotten intros here. (We’re publishing these names with the permission of the investors.)

Startups: How to get on StartupList #

If you’re a startup, apply for StartupList here. We look for the same things that early-stage investors look for: traction, social proof, and team. You don’t need all 3, but you need to kick ass in at least one of them.

Before you apply to StartupList, build a minimum viable product, put it in front of customers, and learn something about product/market fit. If you can’t get this far on your own, find some idea investors instead.

Then write a 150-word elevator pitch and apply to StartupList. Our elevator pitch template is a good place to start. Spend time writing and re-writing the pitch until it’s awesome. Get feedback from good writers and entrepreneurs who have raised money. You have 100% control over the quality of your pitch and there’s no reason not to kick its ass.

Runners-Up

If you’re not one of the 3 startups we highlight on StartupList each week, we may include you in the runners-up of the week. Investors have asked for intros to the runners-up, so it’s also a good place to be. One of the runners-up writes, “Where can we send you a small token of thanks? This added some social proof in itself with a couple of the folks we’re chatting with. I greatly appreciate it.”

Privacy

No one will review your pitch except the Venture Hacks team: Nivi and Naval. If we send your pitch to AngelList, it’s obviously out of our hands, but that’s no different than sending the pitch yourself. At your request, we can also send your pitch to specific angels instead of the whole list.

Angels: How to get StartupList

While AngelList is public, StartupList is only emailed to the investors on AngelList. If you’re an angel, apply to AngelList here. At a minimum, you should have made two $25K angel investments in 2009 and plan to make two more $25K investments in 2010.

Why we’re building StartupList and AngelList

Entrepreneurs are always asking us if we can introduce them to angel investors. It’s one of the most common questions in the startup world. And startups spend a lot of time trying to get these intros. Even the startups who end up raising money from Ron Conway, Fred Wilson, or Sequoia.

We think this is an unnecessary friction and we want to make it easy for qualified entrepreneurs to get intros to qualified investors.

Apply for StartupList and please help us spread the word! I’m looking forward to discussing your feedback in the comments.

I’m psyched to announce AngelList, a curated list of super high-quality angel investors. And how to reach them.

Investors like Jeff Clavier, Dave McClure, Rob Hayes, Aaron Patzer, Brad Feld, and 50 other investors have already joined. I want to thank all of the angels for taking the time to fill out these extensive profiles.

And it’s not fair for me to list just a few of the investors here — they’re all awesome. You should click and browse the entire AngelList. Together, they represent $80M that will be invested in early-stage startups this year.

Angels: How to join AngelList

If you’re an angel investor, apply to join AngelList here. At a minimum, you should have made two $25K angel investments in 2009 and plan to make two more $25K investments in 2010.

Startups: How to contact the angels

Read an angel’s profile before you try to get in touch with him. All the angels have listed how many investments they expect to make this year, their typical investment amount, the markets they invest in, how to get intros, and lots more information you can’t find anywhere else.

Some of the investors let you contact them directly. But, before you do, build a minimum viable product and learn something about your customers by putting it in front of them. If you can’t get that far on your own, go find some idea investors instead. Then send the angels an amazing 150-word elevator pitch.

Don’t send them nonsense. Angels talk to each other and they talk to me. Your reputation is all you’ve got — so please follow our suggestions in the previous paragraph.

And — stay tuned — we’re announcing a sweet new way to reach AngelList soon.

Get AngelList updates

Get notified about new angels on AngelList via RSS or Twitter. And here’s a Twitter list of the angels on AngelList:

Simeon Simeonov:

“You have to understand that you are not competing with an abstract notion of what a good investment is. You are competing with the other teams that saw the investor that week.”

This is why investors often don’t have good reasons why they’re passing. Maybe your company is good, but the competition is simply better. It’s really hard to understand this until 20 companies pitch you in one week. Simeon continues,

“To an investor, it costs about the same in terms of time to make a big or a small investment. Given the same risk/return expectations, they’d prefer the large investment most of the time.”

Actually two dueling inspirational speeches. Very NSFW — contains, as they say, “strong” language.

Video: The Thick of It, Season 3 Episode 8, Ending speeches

Thanks to Fred Destin for suggesting we post some lighter fare once-in-a-while. And see why Mark Suster thinks inspiration is a critical piece of what makes an entrepreneur.

Thanks to FastIgnite, a startup advisory firm, for sponsoring Venture Hacks this week. This post is by Simeon Simeonov, the firm’s founder and CEO (and formerly a partner at Polaris Ventures). If you like it, check out Sim’s blog and tweets @simeons. – Nivi

The best strategy for not having to fire your co-founders is to not bring them on board in the first place.

One of the most common early-stage startup mistakes is building a weak founding teams. Since a good team is often the closest you can get to a good business plan, this one anti-pattern is the cause of many company failures. Before we dig into why this happens so frequently and what entrepreneurs can do about it, I want to share one of the formative stories from my early days as a VC.

An entrepreneur who should have fired his co-founders

Many years ago, I met a 20-something technical founder who had recently left graduate school with interesting technology in the enterprise search and knowledge management market. Beyond his compelling personality and the technology, he had an impressive approach that allowed him to deliver benefits to users without prior user setup or explicit user actions, using desktop and email client integration. To use a current analogy, it was like Xobni but better.

A week later, he came to Polaris with his founding team. He had three co-founders. They all had grey hair and so-so backgrounds. Over the course of an hour, I learned one of the three was a relative who, after hearing about the idea, pushed himself onto the team as “the business guy” and then promptly brought in a couple of former co-workers as co-founders. The net effect was that a backable founder had become essentially unfundable. I passed on the deal. As expected, the company went nowhere. I am friends with the founder and would like to back him some day.

This is an extreme example, but it underscores the randomness by which founding teams are created. Three disclaimers before we dive into the issues:

• I’m not advocating that an entrepreneur goes it alone. Much has been written about the costs and benefits of partners when starting a company. I’m advocating for more thoughtfulness about the building of a founding team and more creativity around how to make progress with limited resources. See Venture Hacks’ post on How to pick a co-founder.
• I’m not advocating that what’s best for the company in an abstract sense should trump personal relationships or commitments that have been made. I am advocating for greater care in making commitments and more openness around the balance between business and personal spheres.
• I’m focusing specifically on founding teams here, but many of the lessons apply equally well to hiring in very early stage companies (before product/market fit has been proven).

How weak teams get built

Arrogance and ignorance, in small doses, are powerful tools that help entrepreneurs focus and execute against overwhelming odds. In larger doses they make a dangerous poison that kills startups. In most cases, they are the root cause behind weak founding teams.

It’s no secret that startup business plans tend to evolve over time, sometimes substantially. Yet, at any given point along that evolutionary path, many entrepreneurs are over-confident that, this time, the plan will succeed. Then they look at the founding team and, if they think they are missing a key role, they may bring a co-founder on board. This process repeats itself up to the point where either the company converges to what it will likely end up doing in the next few months or the founding team gets to a size that makes additions practically impossible.

I recently met an entrepreneur who started working on a consumer social media idea about a year ago. Thinking he was building a small dot-com, he brought on a college buddy who had done Amazon Web Services work as a chief technical officer (CTO). In a few months, the idea shifted toward working with agencies. He brought in a VP of marketing from the agency space, because he was confident that was where the opportunity was. After a few more months, the team realized there was only a services business in the agency space. Now they are pivoting towards expert identification/collaboration in enterprises, and neither his CTO nor his VPM is right for the team.

The entrepreneur in this example is a smart guy. But he didn’t have enough experience to understand what would be required for a co-founder role over the early evolutionary path of the company. He didn’t fully appreciate the opportunity cost of making these early hires given his limited recruiting network and the pre-product, pre-funding stage of the company. Further, he did not know how to evaluate a VP of marketing. He ended up with a communications-oriented exec who — beyond lacking understanding of the enterprise domain — is not very helpful in general with product marketing issues. This is how ignorance hurts.

What VCs think about bad co-founders

Keep in mind that when you recruit or you pitch investors, they don’t get the benefit of the history that might explain your decisions. Let’s imagine what goes on in a VC’s head:

“Shoot, this is a backable entrepreneur and the idea may have legs but the two other founders are B players and a poor fit for the company at this point. I could talk to the lead founder, but I don’t know about the personal relationships on the team and this can backfire. Also, I don’t want word getting out that I break founding teams. This can hurt my dealflow. Anyway, the CEO showed poor judgment in bringing these people on board. Also, there is still a lot of recruiting work to do whether the team changes happen before or after an investment. Frustrating… this could have been a good seed deal. Now it’s too complicated. I’ll pass using some polite non-reason.”

Agile founding teams

There is a principle in agile development that centers on minimizing wasted effort. One of the cornerstone strategies — supposedly one of Toyota’s rules, too — is to delay decisions until the last responsible moment. Because the future is uncertain, the idea is to make decisions with the most information. The emphasis is on “responsible,” because a lot of procrastination is bad too.

Last week, I wrote about how to raise money without lying to investors with this same principle. The logic also applies to building strong founding teams. Because you don’t know what your startup will end up doing, it can be a big mistake to hire the best people for this point in the company’s life.

The obvious solution is to build an amazing team of well-rounded, experienced athletes who can do anything that comes their way. The Good-to-Great companies put the right people on the bus and the wrong people off the bus. If you can do it, more power to you. However, you may have a few problems…

Entrepreneurs Anonymous

I am an entrepreneur, and I have team-building problems:

• I am not exactly sure what my company will do.
• I have limited resources and can’t have many people on my team.
• My recruiting network is limited.
• My company, especially pre-product and pre-funding, may not be very attractive.
• I may not be the best person to evaluate people in _______ and _______.

Ten rules for building agile founding teams

Here are some specific strategies for building founding teams. There are no silver bullets. Some of the advice is contradictory and situation-specific. Caveat entrepreneur.

1. Network, network, network. Learn how to learn through people. It’s the fastest way to understand a new domain. Value negative feedback. It often carries more information than a pat on the back. Expand your recruiting network, so you get access to better talent.
2. Set clear expectations. When getting involved with someone, establish the right psychological contract from the beginning. Talk about what might happen if there is a pivot in an unexpected direction.
3. Go easy on titles. Don’t give out big titles unless you have to and, even then, question why you have to. You can always “upgrade” someone’s title later if they perform well. They’ll appreciate it. On the flip side, big titles can cause many problems when you recruit or raise money.
4. Structure agreements well. Founders should have vesting schedules with some up-front acceleration. In some cases, you can bestow founding status without giving founding equity with accelerated vesting.
5. Be honest with and about your team. Get in the habit of discussing team fit with the business plan in an open, non-threatening manner. When you talk to experienced investors or advisors, be honest about the limitations of your team. Most likely they see any warts just as well or better than you, and you can only win by showing you have a firm grip on reality.
6. Hire generalists early. Hire specialists later.
7. Hire full-timers reluctantly. You can only have a few of them in the early days, whether they are co-founders or not. Be picky. Don’t fall for the chimera of “If only I hire a __________, then I can _________.” This may be true, but only if the person you hire is perceived to be good and does a good job. The perception of the quality of your team is as important as reality for recruiting and fundraising.
8. Find experienced part-timers. Sometimes you can get a lot of value out of very experienced people even if they only spend a few hours, or a day, each week with you. The key is to do this over a period of time and build context. Over time, experienced part-time employees can help in the process of building the company. They can help make many decisions — for example, around team-building, financing and the business plan — as opposed to any one decision. This is how I work with startups through FastIgnite. Depending on the situation, I’m an active advisor or co-founder and/or acting CTO. Other people, like Andy Palmer, take on a board or acting CEO role.
9. Find the right investors. Seek investors who pride themselves on their recruiting abilities and have a track record of helping startups build teams. These investors may see the holes in your team as an opportunity instead of a problem, as long as they feel confident the company is a good recruiting target. Some firms have internal recruiting teams led by experienced former executive recruiters. Examples include Benchmark (David Beirne) and Polaris (Peter Flint). Others, such as General Catalyst and Founders Fund, favor partners who are former entrepreneurs with deep networks and team-building experience.
10. Fire your co-founders. If you are behind the 8-ball and see your team as a key constraint, you should do something about it. Don’t wait for an investor or someone else to do it for you. The non-CEO co-founders can fire their CEO co-founder, too (or change their role and level of responsibility). This happened at a social commerce startup in the Bay Area I liked. The CEO came up with the idea (kudos to him) but he had enterprise background and provided little value-add. His two co-founders were responsible for most of the progress. It took them too long to reshuffle things. By that point, they’d made a bad impression in front of too many investors. The team fell apart eventually.

If you successfully apply these strategies, you stand a better chance of going after the right people at the right time and bringing top talent on board.

You may not even have to fire your co-founders.

This post is by Mark Suster, a serial entrepreneur turned VC at GRP Partners. If you like it, check out Mark’s startup advice blog and his tweets @msuster. And if you want an intro to Mark, send me an email. I’ll put you in touch if there’s a fit. Thanks. – Nivi

This is the last in a three-part series about the 10 things I look for in an entrepreneur. In Part 1, I addressed tenacity, street smarts, resiliency, ability to pivot, and inspiration. In Part 2, I discussed perspiration and appetite for risk. I elaborated on each of the topics in my blog series on VC startup advice.

Most successful entrepreneurs have an attractive mix of skills, know-how and personal qualities that separate them from the herd. Today I cover three more of these critical elements and throw in a couple of bonus entries that didn’t make my top 10 list but are important nonetheless.

8. Detail Orientation

One of the easiest ways to rule out an entrepreneur is when he doesn’t know the details of his business. There are tell-tale signs, and discussions about competitors often expose them. You can tell whether an entrepreneur has logged into his competitors’ products, talked to their customers, read news coverage of them and gotten the back-channel info.

You can tell if the entrepreneur has a deep-seated competitive spirit. Can’t go a mile deep on competition? Buh-bye.

Let’s talk about your product, and let’s look at your financial projections. Can’t walk me through them on a granular basis? Did someone else pull your financial model together while you did “your job”? Not good enough. The best entrepreneurs focus on details. They can tell you the square-foot costs of their property, how much they spend monthly on Amazon Web Services, and the 12 features being developed for the next release.

Another big tell is a CEO’s grasp of the sales pipeline. I can’t tell you how many CEOs I’ve met who can’t walk me through the details of their sales pipeline. I want the names of key buyers, when you met them last, who the competition is, and what the criteria is for making a decision. You think we’re just going to talk about your largest lead? Sorry. Let’s go through the whole pipeline, please. I care about the details, but I’m more interested in finding out whether you do.

Along with detail orientation, I have a strong bias for “doers”. When I ask for a quick demo and the CEO suggests a follow-up meeting with a sales rep because he’s not “a demo guy,” I usually think to myself, “A follow-up meeting probably isn’t necessary.” Similarly, if you need your CFO to walk me through your financial model, you’re probably not the right investment for me.

Ask any CFO I worked with as a CEO: They did the hard work, but I edited the spreadsheets cell by cell. In fact, I usually built the first three versions of the financial model (but then my ADD took over, and I needed a great closer to make the model complete). Founders need to be hands-on. As I wrote in an earlier blog post: “You can’t run a burger chain if you’ve never flipped burgers.”

A startup seeking investment from me once put their “president” on a call with me. When I told him that “president” was a strange title for a startup, he announced they also a CEO. When asked about their different roles, the president told me the CEO set the strategy while he traveled to conferences evangalizing on behalf of the company. “So who runs the company on a daily basis?” I asked. “Oh,” he responded, “we have a COO.” The company had under $1 million in revenue and was burning $850k a month. It had a strategy-setting CEO, a limelight-seeking President and a COO who ran the company.

I gave that company one of the cheekiest responses I have given in my two and a half years as a VC: “You don’t want to raise money from me,” I said. “The first thing I would do is fire you. Then I’d fire the CEO. Then I’d cut the burn to a realistic level and build a company.” They got their round done anyway from a big late-stage VC. One of the large parts of the burn was PR, marketing, and conference attendance. There are VCs who are fooled by all of this, but it doesn’t equal success. A year later the president and the CEO had moved on.

Bad VCs funded this madness in the first place and weren’t close enough to the company to see what was happening. When the CEO of an early-stage startup tells me he plans to hire a COO, I’m usually not interested in another meeting. (Funny side-note: The company was recently nominated for a Crunchie Award. Unfortunately, money can buy you awards.)

9. Competitiveness

As I wrote in my previous post on perspiration, good ideas attract competition.

Everybody these days is fascinated by the “private sale” concept offered by companies like Gilt, Ruelala and HauteLook. There are some great companies in this category, but the initial category killer was a French company called Vente Privee (which translates to “private sale”). From what I’m told, the founders were in the Schmatta (Jobber) business selling other people’s excess, end-of-line inventory at a bargain. There wasn’t the same end-of life infrastructure that we have in the U.S. (think T.J. Maxx), so they had an early lead. When the internet part of their business took off, a number of competitors surfaced.

By then, Vente Privee was a powerhouse and they used that market power. They made it clear to suppliers that Vente Privee would stop carrying their products if they supplied the newly formed competitors. This was a bare-knuckle industry, and money was at stake. Good competitors fight.

Just ask Overture about Google (“Don’t be evil”) and how they competed in international markets. It wasn’t all smiles, hugs and “let the best man win.” A lot was at stake, and Google competed fiercely.

Have a nice little idea and think you can carve out a large market niche? Not if you’re a nice guy. I’m not saying you need to be an arsehole, but entrepreneurs hate to lose. They’re hyper-competitive in everything they do. I look for that fighting spirit in the individuals at my table. It doesn’t matter if they’re playing golf, poker, Ping-Pong, Scrabble, or Guitar Hero. Entrepreneurs play to win, and they take losing seriously.

Think Mark Zuckerberg doesn’t have some sleepless nights about Twitter despite having more than 300 million users himself? Steve Jobs isn’t a “nice guy.” Nor are Bill Gates, Steve Ballmer, Marc Benioff, Larry Ellison, Tom Siebel, Rupert Murdoch, or any number of people you’ll find who built empires.

10. Decisiveness

Being an entrepreneur is about moving the ball forward a few inches every day. What astounded me when I switched from being a big-company executive to an entrepreneur was the sheer number of decisions I had to make on a daily basis.

They sound so basic when you’re not the one having to make them. Should you go with Amazon Web Services (AWS) or have your own servers hosted at RackSpace? Should you build in Ruby, Java, or .NET? Should you sign a two-year lease or rent month-to-month? Should you hire an extra developer now or a business development resource? Should you take angel money or just go for a seed round from a VC? Is venture debt a good idea? Should we launch at TechCrunch50? Should we charge for a product or offer freemium? Should we ask for a credit card up front, even if we don’t charge for 30 days?

It never ends. There is no such thing as a startup decision with complete information. The best entrepreneurs have a bias for making quick decisions and accept that, at best, 70 percent of them will be right. They acknowledge some decisions will be bad and they’ll have to recover from them. Building a startup might be a game of inches, but you don’t get timeouts to pause and analyze all of your decisions.

I recently have been considering investing in an entrepreneur in Silicon Valley. He was deciding between taking another senior role at a prominent Silicon Valley tech company and starting his own business. I told him I didn’t think he needed any more resume-stuffers and now was the time to go do something big on his own. Within a week he delivered a deck outlining his strategy for a new company. A day after we discussed the possibility of him flying down to meet with my partners, he was on a plane.

He then booked tickets to China to talk with suppliers and promised to revise his strategy by the time he returned to the U.S. He is getting stuff done in entrepreneur years, which is a step change faster than dog years. By the time we speak again, I’ll be able to judge results by the quality of his thinking about the opportunity. But by that time, I imagine, he will have made so much progress that he’ll question whether he should take my money. I’m certain he will have talked with other funding sources. This is how it should be.

If you’ve been “thinking about doing something” and batting the idea around with your favorite VC more than six months, don’t be surprised if they’re not prepared to back you in the end. Entrepreneurs don’t “noodle”. They “do”.

Now that I’ve addressed the top 10 skills I look for in an entrepreneur before investing in them, I’d like to offer two additional qualities that can be critically important but won’t necessarily hold someone back from seeing success.

11. Domain Experience

This isn’t a “must” for me, but it’s certainly a huge plus when entrepreneurs have it. You can spend a year putting your hypotheses on paper while researching a market. But you never really have a handle in the minute details of the industry until you’ve lived in it. If you are launching mobile application and have sector experience working for Apple, Blackberry, AdMob, or JAMDDAT, then I know your product will have your experiences baked into it.

I learned this lesson when I launched my first company in 1999. We offered a SaaS document management in the cloud (we were called ASPs back then). I had no experience in document management systems beyond being a user, and nobody had SaaS experience because the market was too new. We were forced to make assertions about features we thought people would want, how to price them, and how to overcome objections to managing data in the cloud.

When I began hiring product managers, sales reps, and implementation staff, I benefited from what employees learned working at places like Documentum and OpenText. They brought the lessons they had learned in their companies
 over the previous decade. I know this stuff cold now. So when I launched my second company – which was also a SaaS Document Management company – we already had a vision for what would do well in the marketplace.

Domain experience also brings relationships. If you spent three years building relationships with senior executives at media companies, a starting point for your next business ought to be, “How can I exploit these relationships in the next venture I launch?”

One successful entrepreneur I know wanted to launch his next venture in financial services because it was a bigger industry. Fine. But I pointed out that he would be up against competitors who had spent years building relationships with the big financial services companies (as well as channel partners), and he would be starting from scratch. I’m not sure why you’d do that unless you had to.

12. Integrity

The most obvious attribute that didn’t make my top 10 list is integrity. It is very important to me. If I thought I could make a lot of money backing a dishonest person, I personally would pass. I know many private equity firms that would not. I’m proud that most early-stage VCs I know care about making money ethically. So you should include integrity on my personal list of attributes
 required to raise money from a reputable, early-stage VC.

Unfortunately, people with low integrity can be successful and can raise money from investors. So I left it off the master list. I personally know a billionaire CEO who I wouldn’t put high on the list of people with high integrity. But he built his company from scratch to become a very large enterprise.  He is well respected (but not liked) in his industry and in his company.  He spends a lot of money on personal marketing so the story is written the way he wants it.

But I’ve seen his actions up-close and wouldn’t claim that they are high on the integrity scale.  I’ve heard this about similar technology executives of some of the biggest names in history.

I also know him to not be a very happy man.  Money can buy a lot of things but, as the saying goes, it can’t, in and of itself, buy you happiness.  I believe that true happiness comes from a sense of fulfillment, giving, and doing what your moral compass knows is right.  Better that you be this person, whatever level of business success you achieve in life.

If you like this post, check out Mark’s blog and his tweets @msuster. If you want an intro to Mark, send me an email. I’ll put you in touch if there’s a fit. – Nivi

We’re determined to have the best comment section of any blog the universe. Comments that are really worth reading.

One of the tactics we use to improve comments is tweeting about the good ones. Another tactic is highlighting good comments on this blog. Here are three comments from last week that really rocked (among many other excellent ones).

Mark Suster from GRP Partners writes:

Over the last few months, we’ve built and tested a new “ad” format on Venture Hacks that I really like. I’m writing this post to launch it (voila), describe the ads, and pitch new sponsors.

The ads

You’ve already seen the ads. They’re ‘sponsor posts’ like How to raise money without lying to investors by Simeon Simeonov. They’re labeled with an image like this,

and an introductory message from us: “Thanks to FastIgnite, a startup advisory firm, for sponsoring Venture Hacks this month…”

Why they rule

We expect sponsor posts to meet the same standards as our own posts: startup advice that tries not to suck. I think we’re succeeding. Sponsor posts get 50-150 retweets by cool people and 10-30 substantial comments. They get on the front page of Hacker News and Techmeme:

The sponsor posts often perform better than our own posts. They do well because you read them and spread the word. Thank you. And the sponsors are already great bloggers, so all we have to do is give them a little distribution bump.

Our challenge now is to maintain and increase the quality of our sponsor posts. Upcoming sponsors include George Zachary from Charles River Ventures and Wordpress’ lawyer, Matt Bartus from Dorsey & Whitney.

For prospective sponsors

Sponsor posts are a great way to start a conversation with the Venture Hacks community — one of the best startup communities on the Web. They’re a chance for our readers to get inside the minds of their potential business partners — whether you’re a VC, lawyer, startup, or service provider. Past sponsors call it a “no-brainer.”

Sponsor posts get 5000+ views, 50-150 retweets, 10-30 substantial comments, and 50-100 new Twitter followers. We’re the only site in the world where the ads perform as well as the content. Learn more about sponsoring Venture Hacks.

Asking for your help

We want to ask for your help. Who should be sponsoring Venture Hacks? Who do you want to hear from? Who has a great blog that needs more distribution? Please send them a link to this page describing our sponsor posts and ask them to consider sponsoring Venture Hacks. And please send me your suggestions in the comments.

I recently described our sponsor posts to Eric Ries and he called them “ads that are really content you can share.” I like that a lot.