Straight Talk for Startups

Synopsis

Are you interested in adopting a "startup mindset" in your corporate role? By understanding the approaches that Silicon Valley's veterans have used to build and grow their companies, you can apply them for yourself, whatever your position. As you learn the ways that entrepreneurs successfully navigate topics such as finding the right investors, managing the board of directors, and pursuing liquidity, you too can glean valuable insights. Why is having two business plans a smart idea? How can you gain the most value from top talent without hiring full time? What does a healthy team dynamic look like, and how can a manager achieve it? Straight Talk for Startups details these tactics, and we show how they can be applied to your life and your role, whatever that may be.

Summary

"But entrepreneurship is more than mere invention; it is the best practice for creating market value from innovation, with limited resources."

This book details 100 rules meant as guidance for aspiring entrepreneurs who'd like to bring their startups from conception to cash, outlined by two Silicon Valley and venture-capital veterans. However, it is also a helpful resource for anyone interested in shaking up their mindsets and methods at work. By applying these concepts to their day to day, anyone can learn how to innovatively create value with limited resources.

The 100 rules are categorized into five categories: 1. Mastering the Fundamentals, 2. Selecting Investors, 3. Fundraising, 4. Managing Boards, and 5. Achieving Liquidity. Of the 100 rules, we found 25 that are also applicable for those outside the world of startups and venture capital. Each rule is summarized here, and if it can be easily applied to other professional contexts, we'll lay out the corresponding tactic as well.

Mastering the fundamentals

1. Starting a venture has never been easier; succeeding has never been harder.

It's easier to start a venture today because investment dollars are plentiful. This makes it harder to succeed, however, because these increased funds bring more competitors to the market and breeds less loyal employees.

2. Try to act normal.

Functioning as a successful entrepreneur takes a large dose of irrationality to believe that you and your company will survive and thrive in a hostile environment. If you have that in you, it's best not to appear too wacky to potential investors, so try to act normal.

3. Aim for an order-of-magnitude improvement

Your business shouldn't just be slightly better or a little bit different than an existing product or service. Instead, it should be at least ten times better, or better yet, a one-hundred fold improvement on the current offering.

The tactic for rule #3

This rule is meant to evoke common sense in those who have become just a little too attached to their idea or invention. From a consumer's perspective, it's not hard to understand the logic of something needing to be A LOT better than an existing product to get a consumer to change. But, when it's our "baby" that we've worked hard to develop, it's much easier to fall into the trap of believing everyone else will love it too. Though a marketer who's spent hours creating a landing page might expect visitors to read every word, there are technologies that show that most people just land, scroll to the bottom, and leave. But, it's hard to be this realistic about our own work. That's why marketing testing to ensure that customers perceive an order-of-magnitude improvement is important.

Apply this rule in your current role by thinking about the realistic hurdles you must surpass when launching something new, whether that be new workflows for your team, a new product offering, a department re-organization, or something else. Will this change bring about a marginal improvement? Twice as better? Ten times? By shooting for a least a ten-times improvement, you won't waste valuable time, energy, and resources chasing something that is only slightly likely to be a success. And, get someone you trust to validate your perceptions of the opportunity.

4. Start small, but be ambitious.

Yes, the master plan for your venture should envision the ways your company will achieve market dominance. But, it's crucial to "stage" your success, proving out the foundational business assumptions before moving on to the next step.

The tactic for rule #4

"Even entrepreneurs fortunate enough to command the resources necessary to chase the big idea directly need to pace themselves, testing fundamental assumptions and removing risk methodically."

When launching any new go-to-market strategy or approach, rather than begin with all pistons firing, think critically to identify the series of assumptions you are making about your market, product or service. What needs to be true to ensure your success? Then, set up your activities logically to prove out these assumptions in the correct order. This can significantly decrease the risk over time and ensure the most effective use of capital.

5. Most failures result from poor execution, not unsuccessful innovation.

Many aspiring entrepreneurs do indeed have an incredible innovative idea, but most fail to realize that bringing a product to market is an effort that requires more skill in execution rather than invention.

The tactic for rule #5

"The creative process is essentially an execution process, not a eureka moment."

There are six stages of growth. First, a compelling idea is conceived. Second, the required technology behind the product is developed. Third, the product is tangibly realized through the success of the technology. Fourth, demand for the product in the market is verified. Fifth, the financials of the product are proven to be profitable. Sixth, the business expands and scales. This can be a helpful framework for anyone bringing a new product to market in their particular industry or responsible for analyzing product performance. By organizing work in this sequence, it makes for the most efficient use of resources. Time and money exploring new markets is not spent before there is a clear demonstration that the technology is sound.

This rule can also be applied as a "filter" for understanding why a particular product may be performing poorly, working backwards from step 6. Is the product adequately supported in its growth, or does it lack the capital and distribution networks to maximize its potential? How do the unit economics (the cost to produce the good versus its sale price) look? If that is healthy, what does the market look like? Is it crowded, with competitors closing in? By analyzing each step individually, it's possible to drill deeper into what may be hindering growth.

6. The best ideas originate with founders who are users.

It's difficult to understand the precise needs and desires of customers unless you are one yourself.

7. Don't scale your technology until it works.

It's easy to charge forward with the assumption that the supporting technology will be built. But that's dangerous – prove the technology before scaling.

8. Manage with maniacal focus.

To really get something right, it's not a team effort but rather a single person with a laser focus on what's important.

The tactic for rule #8

"There is no democracy in product development"

It is not enough to set a plan into motion and allow a team of good-natured and well-meaning individuals to execute it. If you are the owner (of an initiative, a process, an event, etc.) assume that no one else will care as deeply as you do about the details. If you want to create something as beautiful and functional as Steve Job's PowerBook (or the equivalent level of success in your organization), then you must be prepared to "manage with maniacal focus" to ensure that what you are developing meets the standards you've envisioned.

9. Target fast-growing, dynamic markets.

A common mistake is to pursue large markets. Yes, there is likely a lot of money there, but they are also probably quite crowded and competitive. Instead, shift focus to small, high-margin markets where you can become a leader.

The tactic for rule #9

"Focus on becoming the leader within a market segment poised for fast growth, and expand from there."

This tactic can be applied to your own personal career trajectory. It may be tempting to "join the pack" and align yourself with a specific business unit, practice, or function that is large, well-resourced, and provides reasonable career stability. However, the upside may be limited and the competition fierce to become a superstar in that particular area, littering your path to promotion with unnecessary hurdles. Instead, consider establishing relationships and pursuing a path that is more specialized, with fewer slots for your peers to move alongside you. Just as an entrepreneur focuses on the most streamlined path to success, so too can this approach put you on the fast track to a more senior role professionally.

10. Never hire the second best.

If you bring on sub-par talent, especially early on, those sins will multiply as those weaker performers in turn hire even weaker employees down the road.

The tactic for rule #10

"It is said that A players are confident enough to identify and hire A players, while B players hire C players."

The logic is clear here for anyone working in an organizational environment. This is especially important if you are building a new team. Instead of focusing on filling roles, concentrate on obtaining the highest quality talent possible. Early employees contribute greatly to the culture of an organization, as their preferences in hiring will become exponentially effective, as their hires bring on similar-minded staff, and so on.

11. Conduct your hiring interviews as if you were an airline pilot.

Rather than having a loose "behavioral"-style conversation, ensure a rigorous approach is in place for interviews. We all fall prey into thinking we are better at sizing people up than we really are.

The tactic for rule #11

"Having many conversations with candidates is wise, but a hodgepodge of random opinions and inconsistent filtering mechanisms won't serve the organization well."

The rush to quickly find someone to fill a hole in your organization can lead to an interview process that lacks rigor and is subject to personal biases. This is true whether you work in a 100-year-old company or are making your first hire. That's why it's important to systematize the process. Just as airlines realized that airplane accidents were happening due to "overlooking routine precautions," so too can hiring managers and interviewers create a checklist to avoid these accidents.

12. A part-time game changer is preferable to a full-time seat filler.

Just because someone isn't available to come work for you full-time doesn't mean you should give up on them. That person might be available on a part-time basis and still add incredible value.

The tactic for rule #12

"The game changers are those people who can single-handedly reduce your white-hot risks."

The best talent are those people who can create extraordinary impact with very little direction, time, or resources. These people are effective because of who they are and how they operate, not because of a formal role or title. Accordingly, if you find someone who could be a "game-changer" for your organization, it's a no-brainer to get that person involved in any way possible. A part-time role could be a perfect fit. They may need or want to stay heavily involved in other commitments. Even if you only have them for a handful of hours a week, this may be enough to achieve what you need.

13. Manage your team like a jazz band.

The best team dynamic is one where players are individual stars who can perform spectacularly as soloists, but also harmonize beautifully with the rest of the group. This will maximize creativity and collaboration and minimize management and administration.

The tactic for rule #13

"With its emphasis on individual virtuosity, improvisation, and dynamism, a jazz ensemble depends on every member's ability to embrace risk…"

When considering the dynamic of a team, compare it to a jazz band. In a jazz band, there is no clear "boss" responsible for holding everyone accountable for playing each note accurately. Instead, the expectation is that each member will listen, collaborate, and support one another, "pulling their own weight as individuals while taking cues from the other members about new opportunities to contribute." This sets the conditions such that team members feel they can take healthy risks and exercise creativity freely without sanction. Consider this not just for permanent hiring decisions, but also for short-term groups like committees or task forces.

Of utmost importance here is management style. The best group of individuals will not flourish together unless the "leader" sets the conditions accurately. "The leader…is responsible for establishing a coherent strategy and set of priorities while empowering each member of the team…" Rather than dictators or micro-managers, ensure that your own working style and that of your managers is in line with that of a "jazz band leader."

14. Instead of a free lunch, provide meaningful work.

Creating a positive environment where individuals can chase personal and collective success by developing to the best of their abilities is far superior to adding on costly perks like free lunches. Plus, if the going gets tough and those perks go away, it does horrible things for morale.

The tactic for rule #14

"The people you want will trade free lunches for meaningful work and career growth…"

It will become a self-defeating practice to lure people into working with you or your organization through selling a cushy lifestyle or excellent perks. When assembling a team of existing employees or finding your next hire, be frank about the benefits of the work, but keep your ears open for those who seem more interested in the peripheral benefits rather than the work itself.

Likewise, when you yourself are job-searching or considering new opportunities at work, be laser-focused on what's most important. How will this experience contribute to your growth and development? Will it expand your network and breadth of knowledge? Will it open new opportunities in the future that would otherwise be closed? A free lunch only lasts for as long as it takes to get hungry again. Meaningful work on your resumé is permanent.

15. Teams of professionals with a common mission make the most attractive investments.

Successful entrepreneurs are not one-man or one-woman shows. To exude legitimacy, it's crucial to have a strong, cohesive team of professionals on your side.

The tactic for rule #15

"It's a red flag when you show up with a B team or with no one at all, suggesting that you are either too ignorant or too arrogant to realize you need more professionals on board."

Avoiding over-hiring or over-compensating those you hire is important, but even more important is ensuring that whatever your position, you surround yourself with complementary and competent individuals. Don't shy away from what you struggle with, but instead embrace it head on. If you are weak on writing or e-mail communication, ensure your junior associate or executive assistant can cover you in that arena. If you aren't great with numbers, work with people who excel in that regard and ride their wave, while using your strengths to bolster the team as well. Doing anything else is "ignorant" or "arrogant." While operating leanly is key, don't skimp on hiring those who can do the job and make you and the whole organization look better.

16. Use your financials to tell your story.

When in doubt, analyze the numbers. Rather than just a list of facts and figures, the financials can be used to understand and illustrate countless facets of the organization.

17. Create two business plans: an execution plan and an aspirational plan.

To remain focused on running the day-to-day of your business, you must have an execution plan that will take you from point A to point B. However, when setting the larger vision and looking into the future, keep an aspirational plan in your back pocket.

The tactic for rule #17

"This is not a fantasy plan, but rather one that, if some favorable events beyond your control come to pass, you can accomplish with hard work and diligent execution."

Rule #17 can be applied in several different ways. First, in personal career planning, consider taking this approach to setting goals. Make two plans. Your execution plan should include ways to succeed and grow your career in your current position, regardless of your desire to remain in your current company or job for an extended period of time. It should detail the objectives and specific actions you will take in your current situation to expand your skill set, experiences, or network and set yourself up for success in the future. Your aspirational plan, however, is where you get to dream. If you want to switch industries, go back to school, or start your own firm, this is where you lay out the roadmap to take you there. Having two plans ensures that you don't get stuck in the trap of 1) thinking your current job has nothing valuable to offer, or 2) that your dreams are just dreams, with no chance of becoming achievable.

18. Know your financial numbers and their interdependencies by heart.

In business, the different financial spokes (e.g., income statement, cash flow statement) are all intertwined with one another. Understanding how they all fit together can be the key to course-correcting a crucial issue.

19. Net income is an opinion, but cash flow is a fact.

What your income statement says you've made and the cash on hand can be different because of the timing lag to receive payment for the product or service you've provided. When vendors need to be paid sooner than your customers pay you, this can leave a business seriously strapped for cash, so beware.

20. Unit economics tell you whether you have a business.[/itemtext

Whether or not you make money on an individual sale is the crux of your success. Growing your customer base for the sake of growth while not making money on the sales is a recipe for disaster.

The tactic for rule #20

"Bleeding capital on every sale is no joke."

With so many meetings, metrics, demands, and distractions in the workplace, it can be easy to lose sight of what will ensure sustainability of your organization. Yes, crisp marketing is important. Yes, your net promoter score is key. And of course, employee satisfaction and morale are crucial indicators of organizational health. However, none of these items alone will ensure that your business will be around tomorrow. Instead, ask yourself whether an individual sale of your product or service is making money for your company. If not, perhaps it is time to adjust organizational priorities. Whatever your position or level of seniority, focusing on unit economics can be a powerful way to add value.

21. Manage working capital as if it were your only source of funds.

Some ventures can grow through freeing up their own existing cash by moving products more quickly out the door. If possible, pursue this route towards growth, as it's the most cost effective and efficient.

22. Exercise the strictest financial discipline.

Focus on extracting the most value out of every penny you receive or earn.

23. Always be frugal.

Similarly, make it a part of your company culture to meticulously review all spending.

The tactic for rule #23

"Every contract…should be reviewed, sharpened, and challenged, and each party should be held accountable for the work."

Keep your team on their toes by showing you will watch how money is spent. This is especially important when dealing with outside contractors or consultants. As the speed of work accelerates, don't let your agreements get away from you. It's tempting to sign a contract and have faith that the work will be done to your specifications and that the expenses will be allotted as agreed. If you do this, you'll expose yourself to being taken advantage of along the way. Spend frugally, and ensure you and your team get your money's worth with each dollar spent. If needed, delegate this oversight to a competent subordinate.

24. To get where you are going, you need to know where you are going.

Employ measurement as a powerful tool for driving organizational and individual behavior and performance.

[text25. Measurement comes with pitfalls.

Keep your metrics and measurements loose until you know they will drive the results you are looking for.

The tactic for rule #25

"Key performance indicators…that are too rigid can effectively become a straitjacket for your venture."

Metrics and other means of determining whether you've been successful should only become standard and regimented after it's been proven that you're marching down the right path. Because metrics incentivize people to accelerate down a specific avenue, it's extremely important that there is collective agreement that you've picked the right ones. When working with your team or other colleagues to set objectives and metrics, first establish them temporarily to prove out whether you're on the right path. Play around with a variety of metrics and analyze the types of behaviors they promote and discourage. And don't rush to lay any in stone too quickly.

26. Operational setbacks require swift and deep cutbacks.

At the first sign of financial difficulty, do not hesitate to reduce staffing or other spending to stabilize your company. Not making these decisions quickly or as extensively as needed will be a steep regret.

27. Save surprises for birthdays, not for your stakeholders.

Do not save bad news for big meetings or share it in groups. As soon as unfortunate information comes to your attention, share it in one-on-one meetings or phone calls so you can gauge reactions and get input on how to respond from each individual.

28. Strategic pivots offer silver linings.

When leadership identifies that a shift in strategy needs to happen and plans accordingly, it is usually appreciated rather than criticized. Rather than spiral into panic mode, realize that this is merely another problem-solving exercise.

Selecting the right investors

29. Don't accept money from strangers.

Easy cash is just what it sounds like – too good to be true. Be wary of people who are too quick to offer funding. Instead, appreciate that investors will be your business partners, and treat them as such, with the according due diligence.

30. Incubators are good for finding investors, not for developing businesses.

Incubators can primarily hone your skills in pitching your startup and connecting you with funders. You'll need to come in with your value proposition and business plan largely fully formed.

31. Avoid venture capital unless you absolutely need it.

Understand that venture capital firms repay their funders by ensuring the investments become liquid at some point. If you accept venture capital, be sure this aligns with your priorities for your business.

32. If you choose venture capital, pick the right type of investor.

Know that there are different types of venture capital firms, and don't waste your time pursuing those that are not a good fit for you.

33. Conduct detailed due diligence on your investors.

Get to know your investors as people, and be sure to ask questions – lots of them. Talk to as many people as possible who have partnered with them in the past, in both failed and successful relationships.

34. Personal wealth does not equal good investing.

There are many people who have lots of money but without the experience or skills to help you grow your business. Avoid those types of investors.

35. Choose investors who think like operators.

Your investors should not only be good at investing, but also have the track record of being an operator. There is significant risk that your priorities will not align if not.

36. Deal directly with the decision makers.

When being pursued by an investment firm or seeking funding yourself, insist on speaking with the people who make the decisions, not their junior associates.

The tactic for Rule #36

"If you are going to make a first impression, make it with a decision maker."

Recognize that your time is valuable and that it is OK to pass up a meeting or networking conversation. Go with your gut in these circumstances. While expanding your network and cultivating potential suppliers, customers, partners, and others is important, so too is ensuring that the time you spend is productive. When arranging meetings with others, be diligent about who specifically you will be meeting. Know that significant time can be spent on "gatekeepers" that may not come to a positive result for you. Be choosy and speak up if you'd like someone else to be present.

37. Find stable investors.

Many investors are fickle and unreliable. Do your homework to explore which have that reputation and which do not.

38. Select investors who can help future financings.

Understand that each round of investment seems all-consuming, but that there will likely be more. Plan for that and choose investors who can help you secure additional funding in the future.

39. Investor syndicates need to be managed.

Make sure that among your investors, there is a single lead investor and that he or she does their job in providing the appropriate level of counsel and support.

40. Capital-intensive ventures require deep financial pockets.

Your particular industry or sector may require different levels of funding. Make sure the investor you pick is set up to meet your financial needs, should they be large.

41. Strategic investors pose unique challenges.

A strategic investor will fund a startup because they see it is as serving their own business needs. Be careful in these situations and know that their evolving strategy and your evolving strategy may not always align.

The ideal fundraise

42. Raise capital in stages as you remove risk.

Your startup becomes a more attractive and less risky investment opportunity as you remove risk. Trying to raise all the funds at once does not maximize your valuation.

43. Minimizing dilution is not your fundraising objective.

Each round of funding will value your company at a certain amount. Rather than trying to maximize the valuation of your startup in any given round, think about ensuring that your valuation does not decrease from round to round.

44. Don't let a temporary fix become a permanent mistake.

This rule applies to the terms signed for a funding agreement. As it is common practice for future rounds of funding to adopt at least the terms of the previous rounds, shoot for "simple, plan, vanilla structures" rather than complex agreements.

45. Pursue the lowest-cost capital in light of your circumstances.

For startups, the cheapest capital is likely equity, not debt. So, avoid debt and pursue equity arrangements instead.

46. Escape the traps of venture debt.

Venture debt is a "specialty loan" that comes with lots of conditions unfavorable to those receiving it. Avoid venture debt where possible.

47. Choose one of four approaches to determine how much money to raise.

There are four approaches for calculating how much funding you are seeking – milestone, burn-based, runway, and dilution – choose one and be able to defend and explain it.

48. Always have your aspirational plan ready.

Some investors will take to your business plan and want to invest more than you ask. Present your aspirational plan and discuss options for funding those avenues.

49. More ventures fail from indigestion than from starvation.

The temptations of having too much money can lead to irrational and unwise spending. More startups fail because they lost focus rather than because they ran out of cash.

The tactic for Rule #49

"Raising too much money can be a curse."

The reason raising too much money can be a curse is because it leads to distraction and in some cases, complacency. This can be true of business units or departments too. Beware of your unit becoming flooded with resources and losing focus. If this is your situation, consider analyzing your budget to determine if there are expenses you can isolate out of your regular operations. You'll still have those funds at your discretion, but you'll have clearer focus on what absolutely needs to be funded with less money to work with.

50. Never stop fundraising.

Any of your contacts could be an investor or connection to an investor, whether now or in the future. Treat them that way.

51. Venture capital moves in cycles.

While a startup may have preferred timing to bring on new funding, understand that venture capital also has a natural cycle, and don't pass it up just because your timing may not be right.

52. Fundraising takes more time than you think.

Take the lead in actively moving the fundraising agreements along from milestone to milestone, as you are the only one who will have a "sense of urgency" to close the agreement.

53. The pitch must answer the fundamental questions about your venture.

In a handful of slides, you should answer a structured set of questions investors may have. Ultimately, you must show that "you are going to win, and your investors are going to make a lot of money."

54. Make it personal.

The "people" side of things is always interesting, and most people like to be flattered. In your pitch, detail the "people" side of your business – "you, your customer, and the investor."

55. When pitching, carefully read the room.

Treat this interaction like the first impression it is, not just an exchange to solicit money. adjust your communication accordingly.

56. Use white papers for deep-dive follow-ups.

Don't bore your audience with the technical details, but rather prepare detailed white papers to have at the ready should questions arise.

The tactic for Rule #56

"Whatever you do, don't bore the rest of the room with arcane explanations."

While many know that a crisp presentation sticks to the main points and ignores the details, few take into account that these details are hyper-important for many, and can become "roadblocks" to their support. Rather than ignoring the details, when giving a presentation or asking for support at work, show that you've done your homework by preparing and keeping in your back pocket the supporting details. This will quell fears and help you gain supporters.

57. Prepare your financing documents ahead of time.

Assembling your documents in advance and facilitating a "data room" where parties can safely and securely review important documents is important for streamlining the process.

58. Obsessively drive to the close.

Keep close tabs on your interactions with potential investors. Consider cutting your losses if you are getting signals that they are not truly interested, but merely garnering "market intelligence."

59. Consistent communication is important in convincing investors.

Your story can change from round to round of investment but be sure to keep your strategy and messages consistent within a given round of funding, or investors may be spooked.

60. Milestones can solve irreconcilable valuation differences.

If funding is being stalled due to different views of the company's valuation, consider tying payments to reaching certain milestones.

61. Liquidation preferences will change your outcome.

Know that sometimes investors can get first rights to cash, before the founder or employees.

62. Do not take rejection personally.

Don't let rejections set you back or bring you down. It's a business decision, not a personal evaluation.

Building and managing effective boards

63. Boards are deliberate bodies, not collections of individuals.

Your board should function as a cohesive unit. While they may disagree amongst each other, they should have a team mentality and not undermine one another or foster competing factions.

The tactic for Rule #63

"If you treat them like your judge and confessors, they will be your judge and confessors. If you treat them like partners, they will be your partners."

Many circumstances call for advisory bodies even though the official title may not be a "board." Anytime there is a group like this at play, the members must first be carefully selected, and then later carefully managed. When selecting someone to fill this type of role, consider both what they will bring as an individual, and then also how they might interact with the rest of the group. Lastly, prevent this group from becoming a frustrating time-sink by setting the tone for the interaction. Be transparent, professional, and efficient in your interactions, and they'll return the favor.

64. Conflicts of interest and competing interests are elephants in the room.

When conflicts of interest come up, put all the issues on the table and discuss them as "business issues" not "ethical issues." They become more manageable and less taboo that way.

65. Your board should be operational rather than administrative.

Your board should be actively engaged and emotionally invested in the same issues that are keeping you up at night. Anything else is selling yourself and your venture short.

66. Small boards are better than big ones.

Five or six board members are all you need to have effective input and oversight. Invite observers or experts sparingly as needed.

67. Lead investors ask for board seats; qualify them first.

It's worth it to say "no" to money from an investor who demands a board seat but would not be a good fit for your board.

68. You need a lead director.

It takes a special person to lead a board. but it is 100% necessary. They must be well-respected, collaborative, experienced, attentive, and have extra time to boot.

69. Add independent board members for expertise and objectivity.

Independent board members (those without a financial relationship to your company) add new flavors and variety to your board, giving you a competitive edge.

70. True board diversity is a competitive advantage.

Diversity prevents "groupthink" – consider aspects like "socioeconomic background," "international perspectives," or age.

71. Each director must commit to spending meaningful time.

Extract appropriate value from your board by ensuring they don't just show up to meetings, but engage in the interim, wrestle deeply with your questions, and see their role as more than just a "networking event."

73. Review director performance regularly.

Make reviews as formal or informal as you like – the only ingredients are laying out the expectations beforehand and discussing them in the aftermath. Your board will stay fresh and more effective this way.

73. Your chief financial officer has a special relationship with your board.

Don't restrict your CFO's access to your board or take it personally if they have one-on-one interactions without you. The CFO is actually a "fiduciary to the board," not just a member of the C-suite.

74. The founder should choose the best ceo available.

The company deserves the best CEO, even if that person isn't the founder. Though risky, replacing a founder in a CEO role can make or break a venture.

75. Find a coach.

Distinct from a mentor (someone who is a broader "life teacher"), a coach develops and "trains" you to succeed in your role. Find someone who can challenge you in this way.

The tactic for Rule #75

"You are on a steep learning curve."

Many talented people step into shoes too big for their feet with little support available. If this happens to you, don't panic and reject an opportunity, or take it and flounder helplessly. Even the most successful people need coaches to help them build the skills and capabilities needed to thrive in a particular situation, time, and place. Also, don't confuse a coach with a mentor or advisor. Mentors are there for you both personally and professionally, and advisors provide expert information in niche areas from time to time.

76. It is the CEO's job to run efficient, productive meetings.

Make the best use of everyone's time by focusing the board meetings on meaty issues and leaving the details for a pre-read or covering them last.

77. Don't "oversell" your board.

Pulling a veil over company struggles can lead to confusion, distrust, and most importantly, lack of productive discussion with your board. Don't hide issues, but rather engage on them openly.

The tactic for Rule #77

"They want the straight scoop."

There is a time and place for managing appearances – know when to fuss over them, and when to let your guard down. It is crucial that you build up this level of trust with at least a few people you work with, preferably someone who serves in a supervisory role for you. Being frank when problems and issues arise can be a ripe opportunity for growth. And, putting the issues on the table immediately can often mitigate any damage and bring about a solution more quickly. Hiding things that cast you in a bad light does nothing but delay the ugly inevitable.

78. Board agendas should look like this.

Consider a standardized agenda, so people know what to expect and you make the most of the time.

Sample Board Agenda

1. Introduction and Overview (15 min)
2. Performance Status Update (25 min)
3. Forward-Looking Business Update (25 min)
4. Break (15 min)
5. In-Depth Discussions (60 min)
6. Conclusions (15 min)
7. Closed-Door Session - Board and CEO only (15 min)
8. Private Session - Board only (10 min)

79. Prepare thoroughly for board meetings.

If you are well-prepared, the meeting will run much smoother and everyone will be pleased.

80. Use your daily management materials for board meetings.

Time is precious, so re-use reports and other templates that have already been prepared. This will ensure your daily operations are in sync and your reports are valuable as well.

81. Too many unanimous board decisions is a sign of trouble.

If this happens, your board is either disengaged or not willingly sharing their concerns with the CEO, which means his or her job may be at stake.

The tactic for Rule #81

"They were 'getting along' rather than challenging one another."

Being cautious of unanimity is a best practice for anywhere you go. If you have committees, boards, or advisory bodies you engage with, be sure you are facilitating the voicing of a broad spectrum of opinions. In addition, among your personal friends and mentors, be sure you are hearing each of them out when you seek advice. Don't stifle differing viewpoints on major professional decisions, but instead candidly seek input and truly listen.

82. Use working sessions and committees to reinforce your priorities.

Establish a cadence of activity between board meetings to keep your board active and engaged in the interim.

83. Your board should spend time with your team.

Arrange for your team to interact with the board. This is both effective from a business perspective and improves attitudes and motivation among your team.

Achieving liquidity

84. Build companies to last, providing liquidity along the way.

It is the rarity that startups gain liquidity before having gone through the painful yet rewarding stage of sustaining themselves through paid customers. Focus on building a solid, profitable, business first and foremost.

85. Liquidity is not limited to initial public offerings and acquisitions.

Though flashy, IPOs and "being bought" are not the only ways to get cash for your business. Explore all options and choose accordingly.

86. If you go public, don't slip and fall.

Time an IPO such that you maximize value for the future. The best financial years should be ahead.

87. Investors' and management's interests in liquidity often conflict.

Investors may want to wait for more money, while management may be content with a seemingly large payday. Know that it is probably a good time to sell if the buyer is offering more than the current valuation.

88. Individuals need liquidity, too.

Consider options for interim payouts that increase the likelihood of retaining key team members.

89. Your valuation will have a local maximum.

It's likely smart to sell if you're being offered at least your local maximum – "the highest value during a specific period of time or stage of the business."

90. Ventures aren't just bought, they can also be sold.

Don't just wait around for an acquirer to come knocking. Pursue a distinct process for preparing and putting yourself on their radar.

The tactic for Rule #90

"Achieving an attractive sale…entails a methodical process to land the ideal, motivated buyer."

While there is a steady buzz of head hunters and recruiters circling successful talent, if you are one of those people, don't wait for your competitors to come calling before preparing for your next role. Continually maintain and update a list of potential employers in your industry or functional area, doing the legwork to "identify the influencers and decision makers" in those companies. Analyze what they look for in employees based on their recent hires and ensure your resumé and professional references are at the ready. Reach out and be prepared to connect.

91. Choose an acquirer, don't wait to be chosen.

Don't jump at the first to bite, but be strategic and thoughtful about the best fit for you and your company.

The tactic for Rule #91

"What you want is a bidding war."

If and when you are ready to make a move professionally, know that there is more you can do to ensure you land at a place that's a good fit than just sitting back and watching the cards fall where that may. Do your homework to understand the market landscape of these firms and how well they are positioned for success in their industry. If you are looking for more independence and a long leash in your role, consider a company that is clawing its way back and rebuilding. If you are looking for strong mentorship and leadership, consider an industry leader known for its regimented approach to developing talent and promoting internally. Consider all your options, and know where they stand relative to one another.

92. If you want to sell your business, you need to know the decision makers.

Meet with people who have been there, done that, with this potential acquirer. Understand how the company makes these decisions, who reports to whom, and whom to impress.

93. Determine whether you are a good fit for an acquirer before contacting them.

Closely analyzing communications, press releases, marketing, and other materials will reveal a potential acquirer's strategic goals and help you determine if it's a match worth pursuing.

94. Know your acquirer's acquisition history in detail.

Scour public information and gather private sources to understand how the potential acquirer behaves during and after these transactions.

95. Make yourself visible.

Know your industry and be strategic about engaging thought leaders and analysts to "build buzz" about your business.

96. Build a relationship with potential acquirers; don't cold-call.

Practice subtlety when engaging with potential acquirers. Approach them from a broad, industry networking basis, making a good first impression and planting the seed.

97. Be ready when they are.

Do your due diligence ahead of time, so your potential acquirer is the one debating in the final hour and you are ready with your "yes."

98. Success is not linear.

Steady yourself through the ups and downs along the road of success, knowing that everyone has been there.

99. Prepare for your lucky break.

It's delusion if we think that we've created for ourselves every opportunity we've received. Appreciate the fact that luck is a fickle yet crucial component, and be ready when the time comes.

The tactic for Rule #99

"A prepared mind will not succeed without a little good fortune."

The tales of Silicon Valley's greatest founders reveal that even brilliant, dogged, men and women cannot create success out of thin air. Luck and timing are major components of success both in life and in business. Know that if you are meeting some dead ends professionally, the issue may not be you but rather your luck. Likewise, if you're knocking it out of the park, appreciate that you may have also been graced with a little good fortune somewhere along the road. But, keep in mind that you'll never reap any benefits unless you put in the hard work regardless and then pray for the rain.

100. Learn the rules by heart so you know when to break them.

It's only after long hours of study and experience that your intuition will be right. But when that moment comes, trust it.