The Most Important Concept of 2022’s Startup Downturn is Not Just Surviving, But Staying “Default Investable”

VC David Sacks Was Right When He Said “Default Alive” Is a Trap

In New York City, altitude is attitude and the view from $100b+ fund’s office tower was certainly the equivalent of walking tall, shoulders back. I was visiting during a summer trip and catching up with a fellow investor, a few months into this market downturn. Especially having them involved with a handful of our portfolio companies I wanted to know, how would they be looking at follow-on opportunities — both offensively and defensively. He replied succinctly that they were very much still open for business but with a clear delineation: “we’re ok running an ICU but we’re not running a hospice.” To translate, an otherwise healthy startup who urgently needs care and is likely to be fine on the other side of the procedure will get their attention. But in a bridge to nowhere, the company shouldn’t expect to be sustained until its natural end of life. This seemed, well, perfectly reasonable.

Over the last few months I’ve come back to that discussion in my head when thinking through what advice I’m providing to the CEOs in our portfolio. And the equally impactful statement from about a month earlier that that ICU conversation still holds very very true. In fact, I think David Sacks’ framing in the tweet below might be the single most important near ‘universal truth’ I’ve seen about how to manage through a downturn.

When I say ‘universal truth,’ it’s not suggesting it applies to all businesses. There are lots of quality SMB/SMEs and startups which don’t take venture capital. There are also venture backed startups who just don’t have a path forward and would be better winding down, finding a home, or trying to get off the venture capital curve via a restructuring. But if you are planning on continuing to try and fulfill the founding ambition of the company, and qualify for future venture funding, you can’t stop thinking about growth.

You can manage the cost of it. You can alter the slope of the curve for a period of retrenchment. You can take a step backwards to continue experimenting, go after a different set of customers, rethink whether you truly have PMF, but you need to emerge on the other side of it with a startup that’s investable. Reducing burn and ‘months until cash out’ is only helpful to the extent that you are giving yourself time. Using your capital to relieve pressure of execution by saying “we now have 24, 36, 48,♾️ months of runway” isn’t the goal. In fact, switching to this mentality blindly and solely almost assures you won’t be in a position to raise when the capital runs out.

“Default alive” is nice for knowing how long you can pay your rent but “default investable” means you know when and how you’re going to get more capital into the company. As a CEO, that’s where you start.

Succeeding in Venture Capital is Mostly About Knowing What to Buy. But When To Sell Matters Also.

Primary Thoughts About Secondary Transactions

As my man Kenny Rogers sang

You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
And know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done

Starting a venture capital blog post with 1970s country music lyrics is pretty uncommon, but so is writing about when and why an investor might choose to sell equity before the company exits. Below I’ll share some of the principles we use at Homebrew, knowing that there’s not really a single ‘right’ answer for a fund manager. Most of this discussion is about ‘playing offense’ — working towards being a good steward of LP capital and the risk/reward associated with VC. I’m not going to cover reasons to sell that I’d consider ‘playing defense’ — mostly exogenous factors which involve LP pressure for liquidity on non-optimal timelines, dissolution of funds due to partnership issues, and so on. These are all rare, but real, and fortunately not anything we’ve dealt with in our firm.

So for the most part a venture investor holds their equity until the company exits via an acquisition, IPO, or some sort of other liquidity event (management buyout, whatever). But especially over the last decade, the opportunities to sell ahead of an outcome for the company multiplied dramatically. As more growth and crossover investors came into the startup ecosystem they were often eager to put capital to work and happy to consolidate their positions with common or preferred shares from early employees, founders and previous investors. The surplus of capital also meant that new funding rounds often presented opportunity to sell portions of equity to current investors who otherwise were seeing their pro rata allocations cut back. And finally, a more robust (but still somewhat opaque) secondary market emerged for transacting equity among parties.

As an early stage fund, often buying 10–15% of a company during its seed financing, this meant we were often being asked if we wanted to sell portions of our stakes to other approved investors (let alone the random pings from market-makers unaffiliated with the company). As former product managers Satya and I lean towards having frameworks for these sorts of decisions, for both consistency and speed in internal operations. We started by asking our LPs (a relatively small number of institutional investors) and other experienced VCs what they’ve seen play out and how, if applicable, they decide what to do with their own holdings. Then we combined this with observed data from the behavior by coinvestors in our own portfolio.

Not surprisingly there was no specific consensus. There were examples of great investors who said “never sell early — you ride your winners as long as you can” and others who had *very* specific formulas for when they sell (when it hits X valuation, take Y percent off the table each subsequent round; always sell until you hit a certain return multiple for the fund, then hold after; and so on). This was helpful because it let us know that (a) there wasn’t a universal best practice and (b) peers could have the same goals but take different paths to get there. And so next we codified our own ruleset. It sounds basically like this:

  • Every time a portfolio raises a new round we should be ‘buyers’ or ‘sellers’ — that’s not to say that we buy or sell into every round, but objectively we should want to be on one side of the table or the other. We should have an opinion, although one that’s informed by our own fund strategy. That is, we should be buyers or sellers as a concentrated early stage fund, not trying to say “well, if we were a growth fund what would be do.”
  • We should strive to execute decisions that are both in the best interest of the company -AND- in the best interest of Homebrew. I’ll caveat this below but we want to be protective of the longterm interests of the company, the CEO, and the coinvestors. You don’t try to reprice the company on your own. You don’t bring investors on to the cap table via a secondary transaction that are going to be problematic. And so on.
  • Pigs get fat but hogs get slaughtered. Even if we believe a company has tremendous longterm upside, it’s not inappropriate to take some money off the table in order to manage that risk. As we’re recently reminded, markets go down, not just up. Just be aware of the incentives, emotions, and other factors at play. It’s ok to behave one way before you hit your DPI target and another way after, but understand how those factors produce better or worse possible outcomes. This is also true with regards to recycling. If we can sell partially out of a position and put those proceeds into one that we believe has more incremental upside, that’s accretive to our results.
  • We’re aligned with the founders and the rest of the cap table until we aren’t. All the preferred stock is pari passu and behaving honorably in the best interest of the company? Great. The founders are taking some money off the table in secondary but still very much locked in on building and making funding decisions that are consistent with that? Great. In these cases there’s very little additional complication. But if this breaks, we need to reconsider how we think of our own positions. Not in darkness, but expressing concerns first and then doing the best version of what we can to treat the company fairly but also do our fiduciary interests for our LPs. What’s an example of a situation that might start fracturing the cap table? Imagine the CEO is sitting with two funding offers. One is a clean termsheet, no structure. The other has a ton of structure (preferences for the new investor) but also offers an equity refresh to the exec team, or has a handshake with the CEO that they’ll buy $30 million of equity from them after close. You might think, “Hunter! This doesn’t happen — a Board would stop it” (or whatever). And I’d say, it does even if it sucks for other investors and the employee common shareholders. Again rarely but if you do venture long enough you see at least one of everything. At moments like this, if they occur (and I can say we haven’t experienced anything this grievous to the best of my knowledge), all of a sudden we’re not rowing in the same direction.

Much of success in venture is knowing what (and when) to buy. If you do that well it’s very difficult to mess it up. Conversely, if you’re not a good picker, it’s difficult to overcome that, even if you had perfect timing on secondary sales. But sometimes the difference between B+ and A- (or between A and A++++) can be a well-timed decision to turn unrealized gains into partially realized.

Why Figma is Worth $20B And Other Observations From The Adobe Acquisition

Hint: The Answer Doesn’t Involve a Spreadsheet


I’m not an investor in Figma. I don’t know Figma CEO Dylan Field. And I’m not a designer. So this means I’m either perfectly positioned to give you my objective comments on Adobe’s $20 billion purchase of the startup, or totally unqualified to ask for your time on this matter. With that out of the way, here are three statements about this acquisition.

  1.  Is Figma really worth $20 billion? I mean that’s 50x ARR!

Any spreadsheet that Adobe’s corp finance function used to justify the multiple, or the bankers presented to suggest what valuation it would take to get this deal done, is basically CYA math. There’s one single method for Adobe’s calculation:

Figma had crossed the ‘this matters to Adobe’s future’ rubicon. They hit $400m ARR and were continuing to double. Figma revenue, independent of margin, was increasingly displacing revenue that might have gone to Adobe, or more specifically, creating pricing pressure on Adobe. It was a product designed natively to be collaborative, to be easier to use than Adobe’s professional tools, and without the baggage of features and nomenclature leftover from years of software releases, platform shifts, and business model changes.

When the autonomous car company Cruise got quickly snapped up by GM in 2016 jaws dropped at the $1b+ reported price (we were small investors in Cruise). The answer there was the same: if autonomy is the potential future of your industry and you’re not yet strong in that area, what’s percent of your market cap is it worth to bring those cards into your hand. In that case it was roughly ~2.5% if I’m remembering correctly. In Adobe’s case it was a larger percentage because Figma is way further along as a business and the certainty the future of design at least looks like Figma is high. There you go.

Once the acquiring company CEO and Board is framing the transaction this way the startup has won. It’s gonna be a huge payout. And in venture, one thing is true about huge exits….

2. This transaction is not about Adobe’s failures, but actually about their success.

It’s easy to beat up on Adobe. Dumb big company couldn’t build Figma themselves so ends up having to pay an eye popping amount. But I’m going to suggest that you actually should give Adobe credit in this case for being in the position to make this offer.

It wasn’t too long ago that Adobe sold shrinkwrapped package software for a one time payment. Then the big innovation was they could decrease the physical COGS by making this upgrade downloadable. But they lacked the ongoing reoccurring revenue stream of a SaaS company. And that revenue model is so much more attractive, and given a much higher multiple by investors.

So they bit hard and moved to a largely subscription Creative Cloud model. And it, well, worked.

Over the last five years Adobe dramatically outperformed the NASDAQ index. That gap shrunk meaningfully the last few days as investors questioned the Figma transaction, but that Wall Street reaction is short-term not what matters. What you should realize is that Adobe was only able to make this acquisition because they escaped the old business model and were rewarded with a market cap that hit $200b+ over the last 12–24 months (it’s $140b as I write this post-transaction announcement). If Adobe had failed this transition they would likely be well under $100b marketcap and pretty much unable to swallow Figma (let alone a much less attractive place for the Figma team to exit to).

Leading a big public company is really hard which is why I’m inclined to say, good job Adobe! While also celebrating Figma going right after them to start.

3. Hands off this one Lina Khan.

I’m not making a legal argument here about the FTC and how you define antitrust, monopoly, etc with regards to M&A. I’m just saying I think it’s stupid and short-sighted to block a transaction like this. Adobe is giving their pound of flesh. Figma is being incredibly well-rewarded for innovation. And if you remove the potential for acquisitions by the market leader from the startup playbook you’ll actually get fewer startups going after the market leaders. And that has worse ramifications for the economy and for consumers than incremental consolidation like this. Especially since there are plenty of other tools available to accomplish one or more of the same functions Figma does.

When a VC Passes, And Is Wrong: Real Talk Between Me and Ethena’s CEO Roxanne Petraeus

The Four (!!!) Checks I’ve Written The Company Since Saying “No,” Never Bought Me As Much As Saying “YES!” Would Have In The First Place. An Investor and a Founder Postmortem a Mistake

The common VC passes are pretty cliche. “It’s a bit too early for us but we’ll be rooting for you from the sidelines,” “We were intrigued and impressed but just can’t get there at this time,” or just plain ghosting you without any feedback. I’m writing this knowing that despite trying to do better, I’m not absolutely innocent either. Which is why it was refreshing to be asked by Ethena’s CEO to do something publicly that investors normally aren’t interested in rehashing: discuss why we passed on leading the seed round for her startup.

Now, the situation here that enabled such a frank discussion is a bit atypical. Ethena is a SaaS startup building modern compliance training. Their customers include Netflix, Figma, Carta, Zendesk, Notion and lots (and lots) of other enterprises who want something that’s more than a checkbox CYA experience. Something which builds healthier, safer, lower risk workplaces in an enjoyable and effective format. They are now quite successful, having raised a significant Series B earlier this year and continuing fast growth (it’s nice to be selling something that all companies are required to do). And while I passed on leading their seed, I did contribute a smaller amount into the financing, along with three subsequent pro rata/super pro rata investments.

Even more importantly, and independent of whether we were a ‘lead investor’ or not, I’ve had the chance to spend meaningful time with the cofounders over the past few years and consider them to be wonderful friends, in addition to leaders I admire. But the initial pass was, in investment terms, a huge mistake and something I regret. As is the case with startups like Ethena, that first opportunity would have given us a larger ownership stake than all subsequent checks combined. Facepalm.

Their CEO Roxanne Petraeus suggested that talking about this together publicly would be helpful because she’s learned a lot about how she pitches Ethena, and unpacking the conversations we had could be helpful to other founders who are raising. I agreed and we subsequently did a TechCrunch Live discussion together with a follow-up blog post in her newsletter.

The TC discussion was about building, and investing, in undiscovered markets — areas which at first glance might be misunderstood or perceived as ‘too small’ but which are actually quite fertile for venture sized outcomes. Compliance training is an example.

My takeaway from the chat is that Roxanne’s disposition initially was to ‘sell the business, not the vision’ and that reinforced some of the concerns we had about market size and ability to scale sales. Whoops.

We go into more detail in her newsletter which I’ll link here. We get pretty raw in it — I basically admit that my concerns rested about her abilities to lead Go-To-Market and she responds that it’s a little hard to hear she was the ‘weak link.’

People ask me what do I think makes a successful founder and investor relationship and I always respond: trust and context. The ability for an investor to earn the trust of a founder and maintain that over time. And the understanding for the context (industry, culture, founders’ personalities, etc) that surrounds this company so that you’re giving them specific, relevant advice and counsel, not just startup platitudes.

Thank you Roxanne (and Anne) for the mutual trust and context. Despite my mistake, it has made working with you both an absolute joy and I’ll continue asking you to take my capital every time there’s an opportunity to do so!

Oh and by the way, Ethena is HIRING

“Workers are mad and no longer willing to sit idly by being spoon fed ‘we’re family’ bullshit from bosses:” Logan LaHive is Helping Employees Organize & Collectively Bargain. But Did He Compromise His Own Vision By Taking Venture Capital for the Startup?

Why This Repeat Entrepreneur Founded Frank, a Software Platform for Workers. And Does He Think Chicago Is a Good Place for Entrepreneurs?

Logan is another one of those folks that I can’t recall specifically how or why we met, but I’m so thankful for his friendship. He’s someone I really consider a ‘good egg’ as we’ve enjoyed the stories of his own entrepreneurial journeys and strongly held opinions on Chicago coffee. I’m excited to shine the light on Logan and Frank, a software startup focused on worker empowerment. Thanks Logan!

Hunter Walk: Frank, your current startup, is a platform for workers to organize in order to protect or advance their rights. When I read this mission statement I think ‘unionize,’ but maybe that’s just a tactic, not a requirement. Can you help me understand the difference?

Logan LaHive: First, the problem… The incredible imbalance of power in workplaces is driving continued acceleration of income inequality, which along with climate, is a top issue facing society today. I don’t profess to have the solution — just believe that workers having a stronger voice in their workplaces is a good place to start. There are many forms of worker voice, and differing approaches to exercising it — so you could certainly say that unionizing is a tactic… but it’s clearly the most established, strongest, and legally-protected path to worker power.

Other options for workers can be taking collective action, solidarity unionism, forming independent unions, employee resource groups (ERGs), guilds, joining a worker center, new innovations/ideas, etc. All of which have merit, and may be best in different circumstances. Being honest, unionizing is fucking hard. Intentionally. Many decades of corporate lobbying, republican policy, and near non-existent enforcement of labor laws has quite successfully established roadblocks to workers exercising their right to unionize.

But unionizing has clear benefits — beyond improving wages, benefits, and workplace conditions — it offers the resources and backing of experienced representatives (the union) for collective bargaining, in which the employer is legally obligated to participate and negotiate in good faith (make your own assessment of “good faith”).

Our mission at Frank is to provide workers with tools not only to have a voice in their workplace, but to ensure that they’re heard. Our product is purposefully built to pursue the tactic of unionizing. We build organizing software for unions and labor orgs — a customizable and private platform for Organizers to support workers all the way from interest / onboarding through to submitting union authorization cards. So, while personally supportive of any and all workers seeking to improve their workplace conditions, we spend our days focused on providing better software to unions enabling them to improve efficiency and accessibility of union organizing.

HW: But at the same time we’re seeing lots of stories about new segments of workers seeking to unionize (such as Amazon). What’s your take on the potential here? Are we going to see a new generation of service and trade employees turning to unions? Will these same groups every formalize for segments like engineers?

LLH: Yes. Next question.

The trends and data are quite clear. Union elections are way up (NLRB), unionizing is incredibly popular — with people under 35, support for unions is equivalent to marriage equality and legalization of weed (Gallup), and nearly 50% of workers in the US would join one if given simple yes/no chance (MIT). Workers are mad and no longer willing to sit idly by being spoon fed “we’re family” bullshit from bosses making 350x more than they are, doing layoffs over zoom from a yacht.

It is a certainty that things are and will change… How fast? What will unionization rates in private workforce be in 2025? 2040? I don’t know. Like mentioned previously, worker power can take on many forms. For most people, when they say or hear “union” they think of one cookie-cutter type institution… but the reality may certainly be more a mix of escalating collection action (demand letters and walkouts), independent unions (Amazon Labor Union, Trader Joe’s United, etc), worker-led union organizing (Starbucks Workers United), more Worker Centers, etc. (and yes, I’m intentionally not throwing DAOs or web3 in the mix here as just doesn’t yet deserve implied parity).

For anyone reading this, if you work at a company with 100+ people, there is 98% chance that at least two of your coworkers are actively discussing unionizing. But like I said, it’s hard, and it must become easier. I’m no policy wonk, nor do I put much faith in our current political landscape to enact sustained change (even though you’d really expect better ROI on the $Billions that Labor has funneled to Dem politicians over past few decades). So a sincere hope of mine in building Frank isn’t that we’re right, it’s that we can be part of growing an ecosystem or community of folks building tools specifically for worker power (LaborTech).

HW: Frank is venture backed. I’m going to assume that your funding conversations here were a bit different than your last startup. How many times did you get called a socialist?

LLH: It’s been interesting. Frankly, raising capital to work on this problem is and was privilege. Straight cis white guy from background in tech/startups, who ran an accelerator program so has many years of relationships with VCs, and raising preseed in the yolo era of 2019 (rip). Building tools for unions is certainly not a category or product that most VCs want to exist, let alone see grow. I’ve heard many fast and hard passes. Lot of people I’ve known for many years certainly aren’t returning emails the way they used to. Endless anti-union tantrums, delivered with the confidence that only a VC who had a single personal interaction with a union 7 years ago could muster. A lot of confused, raised brows, “Wait, aren’t unions bad?” then a passing reference to Jimmy Hoffa.

What I do find quite funny is just how many contrarians have the exact same reaction. How personal opinions immediately cloud this topic, but how many new categories are evaluated with some marginal intellectual curiosity. Probably a correlation here with why there was more venture funding for golf tech than women’s fertility until very recently…

Look, socialists hate venture capital, and venture capitalists hate unions. But building new tech to try to address major problems in a large category (Labor) requires $. It requires valuing the labor of the team we hire to build it, to support our partners (unions) that use it, and to invest in continually making it better. We didn’t have access to union funding, grants, or bags of cash that fell off a truck. I tried, and I self-funded for probably longer than reasonable.

We don’t aspire to be venture backed, to be a mark-up, or to chase the headline of a valuation. Nor are we seeking to advance a political agenda. We’re working in a space where, historically, funding has been sparse. So I’ll take some shots along the way, but keep head down and stay focused on mission we know to be deeply meaningful, and on delivering value for our partners (unions).

HW: When we first met you had founded Belly, a B2B2C loyalty/retention startup. There were a number of similar companies formed around the same time — I think a byproduct of mobile apps and businesses starting to want more data on their customers. What’s one thing you were right about and one thing you were wrong about that fundamentally impacted the trajectory?

LLH: When starting Belly in 2011, yeah, we were tracking something like 15 companies in the Loyalty space. It looked more like a market map than a competitive landscape slide. Most were in SF, mostly early stage, some generating buzz out of YC or 500 Startups, almost entirely ‘check-in’ type apps. We very quickly outgrew them all, and within about a year it was clear there were 3–4 key competitors.

I think that with time, the things we did right and things we fucked up get clearer with perspective, but tainted by fading memories compressing themselves into tidy narratives.

Early on, something we absolutely did right that helped propel us quickly was spending a LOT of time in stores with customers (small business owners), and deeply prioritizing what they needed to see within their four walls rather than what we wanted to be said about us in Techcrunch. Many competitors were building cool new things, that felt hot and buzzy… like, they were mobile only products at a time (2011) where less than half of a small businesses customers had smart phones. And the POS (point-of-sale) in all markets outside of SF were antiquated, closed systems, that the owners didn’t want touched because last time someone tried to add a new SKU the “3” key stopped working for 6 months.

So, we put an iPad on the counter, customer facing, and enabled consumers to sign-up or use Belly with our app or a physical key-chain card (QR code). Business owners loved it because it created 100% addressable audience — all of their customers could easily sign up and use it — so they promoted it. And it created a digital billboard at the highest value location in a retail store (POS) which we used to market directly to the businesses customers. It was our flywheel. We were able to intensely focus on selling to business owners, and they drove all consumer acquisition from within their stores.

Once growing quickly, and pulling ahead of competitors, I think we lost track of whether the race was worth running. Being so focused on growth, market expansion, hiring, fundraising, I convinced myself and others that dominate market share would enable us to ship XYZ, to “be a platform” 🙄, and expand share of wallet. Hard to pick just one thing I was wrong about, but, today’s answer: The decision to operate stand-alone outside of POS (point-of-sale) rather than building core POS meant we were a feature. There was something so core to the businesses operations — it took payments, could clock-in employees, process all SKU/transaction data, and was required to be utilized for every single transaction… and we were sitting near it, but we weren’t it. We were pushing a rock up the wrong hill.

HW: The last two years have seen an acceleration of ‘tech startups can be built anywhere’ and of course, intense debates about remote work. You led TechStars Chicago for two years (2017–2019) and have been connected to the local scene there for a quite a while. Has Chicago over-performed or under-performed your expectations over the last decade as a home for startups? Any predictions going forward?

LLH: I don’t know. Chicago VCs and all the institutions spun up to sell Chicago tech will say it’s over-performed, and will quote bunch of random stats they gathered in a survey or a Pitchbook article like the MOIC of Chicago venture investments. I have no idea what MOIC is. I looked it up a few times. But honestly couldn’t care enough to remember. Or, I hear about the % ROI from Chicago investments being top decile because of lower entry valuations, as if that’s something that is attractive to founders…. “Hey look at me, my midwest valuation got you a better return! Cool!”

Folks in Miami will say Chicago is cold, Enterprisey, no vibes, and yolo miami bro. No comparative data, just pumping the hype / meme campaign.

Each tweet storm or blog post about City A vs B, “Top 10 Hottest Places to Start a Startup”, “Is Boise the New Austin?” I read them knowing the vast majority are biased narratives with a self-serving purpose — a politician promoting their city, a founder trying to attract exec talent, a VC test driving their new geo-concentrated LP pitch… Honestly, I get annoyed momentarily then just move on. Others can waste cycles debating it.

I know there is everything needed to start and build a great team and company in Chicago. There are some markets that offer advantages vs others, and some geos best suited for startups in specific industries. But remote and distributed teams are here to stay, and I’m still learning to effectively lead a distributed team. So, no, no real predictions — just that I’m happily staying put in Chicago and trying to constantly adapt with new norms.

Thanks Logan!

“I guess we’ll know we’ve made it when a woman can get away with behaving like Elon Musk.” Talking With VC Ashley Mayer About Finding Your Career, Taking Box Public, And Why She’s Not Interested In Reading Yet Another Female CEO Takedown

From Box to Glossier, and Comms to Venture Capital, Ashley Mayer Is Carving a Pretty Unique Path. What She’s Learned, And What You Can Learn From Her.

We had overlapping circles and then became friends. I’m an Ashley Mayer superfan so beyond the affinity, have been fortunate enough to also bring her into Homebrew as an advisor to our portfolio companies, and invest in Coalition, a venture firm she founded along with three other amazing female operators. Her personal story and insights into tech are valuable and novel, hence why I asked her to share them with you, in Five Questions.

Hunter Walk: Ok, so we first met when you were leading comms at enterprise software company Box, a startup you joined when they were still pretty early and stayed at until post-IPO. First, congrats! But second, I realized I actually don’t know the story of how you first came across Box and why you decided to join. And then take your experience and turn it into a piece of thought leadership career advice to share with people reading this 🙂

Ashley Mayer: I was two years post-college and working at a public relations agency in San Francisco, a job and career path I stumbled onto when I was rejected by my top law school picks. I wasn’t particularly brilliant at or inspired by the role, but then I worked with my first startup client and was instantly seduced by the energy and audacity of that project. Better Place was building the charging infrastructure to enable mass adoption of electric vehicles; it was led by a charismatic CEO, raised gobs of capital before that was the norm, and later imploded spectacularly. I tried to get hired at Better Place and failed. But for the first time since abandoning my law school plan A, my mandate was clear: I needed to work at a startup.

Enter Box. I had gone to high school with the founders in the Seattle area, and we had recently reconnected. When I learned they were hiring a community manager, I threw everything I had at the interview process. They gave me a shot.

Working at Box was a revelation. I had come out of an environment with a lot of hierarchy, where everyone was doing variations of the same job. Box had just 50 employees and was hitting an inflection point when I joined in 2009, so there was far more work to do than people to do it. My boss, Jen Grant, was an incredible manager, and Aaron Levie, the co-founder and CEO, was a fantastic partner on all things communications. Every milestone was an opportunity to tell the biggest possible story.

With the benefit of hindsight, I’m glad I spent those first two years feeling somewhat lost, career-wise. There’s a lot of pressure to build the perfect resume right from the start, but once I’d failed that assignment, I was free to optimize for different things, like learning and having fun.

My advice to people early in their career is pretty simple: your mission isn’t to pursue a career, it’s to discover it. Put yourself in interesting situations. Each experience is a building block and, in the future, you’ll figure out how to arrange (and rearrange) all those blocks in ways that make sense for you. People with impressive careers may sound like they were strategic all along, but I’m convinced that in most cases, that’s only because they’re looking backwards. Especially in the unpredictable and fast-moving world of startups, careers are stories that only make sense in hindsight.

HW: Anyone who’s been through an IPO, I always like to ask about the experience because it’s such a classic, if statistically rare, startup milestone. I assume leading Comms you really had to be careful during the quiet period and so on, all while letting Aaron still be Aaron. Any good stories or memories about the process or listing day itself?

AM: Getting to work on the Box IPO was one of the coolest things I’ve ever done. It was also one of the hardest. We originally filed to go public in March of 2014, and didn’t actually become a public company until January of 2015. A process that normally takes five weeks, give or take, took us ten months! Our timing was brutal: the Box S-1 coincided with the start of a major market correction for SaaS stocks, and our newly revealed financials made us a natural poster company for that change in sentiment.

Until then, Box’s narrative had been consistently up and to the right. We were interesting enough to be newsworthy, especially since Aaron was such a compelling spokesperson for the evolving enterprise software category, but we hadn’t attracted the same level of skepticism as our buzzier, more highly valued consumer contemporaries. So when public perception of Box changed overnight, I wasn’t prepared, emotionally or strategically. Years later, I wrote about several of my hard-won lessons from Box’s IPO process.

Two additional moments stand out to me. The first was in July of 2014, when we made the unusual move of raising and announcing another round of private financing while on file to go public. We could have just left the news cycle at that, but decided to proactively release our Q1 numbers in tandem to show our progress, like a mini earnings. I remember at the last minute we had a crisis of confidence…was this really the right move? Could we still trust our instincts? We forged ahead, and reception was positive. Putting out those numbers didn’t magically fix our story, of course. Box’s ten-month quiet period taught me that rebuilding trust and confidence is something that happens incrementally. We continued to report our financials every quarter leading up to the IPO, and by the time we were finally ready to go public, people had a much better understanding of our business fundamentals and trajectory.

The second moment was the IPO itself. I remember feeling oddly calm amidst the clamor of the NYSE trading room floor. I was on the balcony with my colleagues for the bell ringing, and during all that clapping and cheering, I felt a wave of gratitude for all we had experienced to get to that milestone. It was clear to me that this team and company were so much better prepared for whatever was ahead because we’d been through something hard, and had made it to the other side with a deeper resolve and thicker skin. Whenever I’m at a career low point, I go back to that moment.

HW: Then you did a bit of a Venture (Social Capital, someone else’s firm) -> Glossier -> Venture (Coalition Operators your own firm) loop. Social Capital has obviously evolved from its original form and that was the period where you moved on, so I want to focus on the decision to return to operating. Box and Glossier feel like two very different industries! Are they kind of like the ‘two sides of Ashley’ or are they actually more similar (from the perspective of your role: work with a compelling founder/CEO, help other people understand what is special about the company, and so on)?

AM: I love switching between an operating view (depth) and an ecosystem view (breadth): it’s the only consistent pattern in my career! Operating keeps you honest, while getting to work across multiple companies and categories gives you perspective. It’s a powerful combination, and I later learned I could have my cake and eat it too when I started investing and serving as a Homebrew Advisor while leading Comms at Glossier.

I was originally going to take time off after leaving Social Capital, and even try to write a book (something that is still on my bucket list). But a casual coffee with Emily Weiss on the eve of my last day at Social Capital ultimately changed those plans. I joined Glossier because of all the things I hoped I would learn: about consumer businesses, the beauty industry, brand and community building, and beyond. After working for two male CEOs, I was ready to support a visionary female leader, and hoped I would be able to challenge and expand traditional founder archetypes through my work at Glossier.

Additionally, my Box experience taught me that I loved telling stories of category transformation, and that becoming a poster company for an evolving category can create major narrative tailwinds for a business. I thought maybe Glossier would be another opportunity for that type of story — either in beauty specifically, or e-commerce more broadly.

HW: You consistently speak out when you see female CEOs get treated differently by the press. Not that CEOs are above criticism or analysis, but that there are profile tropes which seem pretty gendered and don’t get applied to male leaders in the same way. How do you help female leaders navigate this potential bias? I’m particularly interested in how language once used supportively for empowerment by some female CEOs (#girlboss) can then be used negatively by media and detractors later on. The answer can’t just be “stay very boring” right?!?

AM: The thing that worries me the most is the hidden industry-wide toll these stories take. I’ve heard from too many founders, including those at the very earliest stages of company building, who’ve read these articles about some of the most visible women in our industry and feel like they already have a target on their backs. That’s a heavy burden to carry when your job is to push boundaries and break with the status quo.

Fortunately, I don’t think the path forward is to “stay very boring.” Maybe this is my inherent bias as a comms pro, but in aggregate, I believe the uncaptured upside when women founders stay under the radar is far more detrimental than the risks that come with visibility.

For any individual founder, all comms decisions should start with the desired business impact. Which audience do we need to reach, and what do we want them to do? For some early stage startups, investing in comms won’t meaningfully move the needle; for others, it can be transformative. Framing profile building decisions in terms of business goals not only makes this aspect of the job more palatable for founders who aren’t publicity inclined, it also makes it easier to weigh potential risks against potential rewards.

These decisions become more nuanced with visibility and success, when women and other underrepresented founders are invariably held up as symbols of their respective identities. Deciding whether to embrace this aspect of profile building, and any of the “girlboss” type lingo that comes with it, is both a professional and deeply personal calculation. What’s essential is that founders are prepared for the additional scrutiny this attention will bring, whether or not they seek it out. Investing in internal communications, building out owned channels, and identifying advocates who will call out unfair treatment when they see it (a role we should all play if we can afford to) give founders a stronger foundation as spokespeople for companies, categories and movements.

Of course, media scrutiny doesn’t exist in a vacuum. Many of these stories, and the anecdotes that shape them, are a reflection of the way society as a whole views women in positions of power. Today, my best advice is to be prepared, and when things get tough, for founders, boards and comms teams to take a deep breath and not overreact (I could write a whole blog post on this). But what I really want for this next generation of founders isn’t just a good defense. I want to see women on offense: taking risks with bold ideas, and experimenting with new ways to get them in front of people. I guess we’ll know we’ve made it when a woman can get away with behaving like Elon Musk.

HW: You recently launched Coalition Operators, a venture firm + operator/advisor network to really help startups with more than just capital. I’ve seen your work firsthand since we’ve been lucky enough to have you as an Advisor to Homebrew’s portfolio. What convinced you — and your other partners — that this was the next phase of your career? What type of opportunities are you most interested in?

AM: Angel investing was our collective gateway to building Coalition. We were all at different points in that journey, and in early 2020, we started investing together with pooled scout capital from Thrive Capital. We each have different functional and sector expertise, so this was an opportunity to learn with and from one another while supporting early stage companies, alongside our core jobs as founders (Toyin Ajayi at Cityblock, Jackie Nelson at Tribe AI, Lindsay Ullman at Umbrella) and operators (I was running comms at Glossier).

In the process of investing, we became rather obsessed with helping founders build more diverse and impactful cap tables. We’d all benefited tremendously from having access to scout capital…could we create a new model to bring more women into this part of the startup ecosystem at scale? So in 2021, we partnered with Thrive and General Catalyst to connect wildly talented operators and startups in their portfolios, with the VC firms sharing a portion of their potential upside in exchange for advisory support.

Now in 2022, we’ve taken both of these efforts to the next level. We recently announced Coalition Fund I, a $12.5M early stage fund (our sweet spot is Seed and $200–300K investments), and the Coalition Network, a place where top operators can take a “portfolio approach” to their careers and build their wealth and impact beyond their day jobs. We’re unsurprisingly very founder driven in our investing, and while we’re category agnostic, focus a lot of our time in areas where we have experience building, including healthcare, future of work, e-commerce, marketplaces, and climate. We’re also constantly meeting with incredible operators, and in addition to the model we’ve created with Thrive and GC, love pulling them into deals alongside us as angel investors. We’ve basically built the products we’ve always wanted for ourselves as founders and operators.

This is now my full-time job (my partners are part-time as they run their companies), and I’m still in awe of how I get to spend my days. For me, this was the most organic and obvious career move I’ve made to date, even though it’s also my biggest pivot and I have so much to learn. When you spend your nights and weekends building something you care a lot about, getting to give it your full energy and attention is an incredible privilege.

Thanks Ashley, looking forward to working with you and Coalition!

I Assumed This Memoir Was Just Another CEO’s Personal Brand Reinvention. I Was Very Wrong.

You Might Learn About Entrepreneurship Reading Andy Dunn’s Burn Rate But You’ll Learn Much More About Being Human

The realization of how mistaken I’d been hit somewhere around page 24 when the author details slipping into a psychotic state where he believed he was the returning Messiah. You see, my purchase of Andy Dunn’s Burn Rate was primarily to be supportive (I like him), and this past spring, it went from its Amazon package to a ‘Later’ pile in my office. Last weekend, the yellow-covered memoir moved from that stack to my hand. And then I proceeded to binge-read Andy’s memoir.

Burn Rate punched way above its weight, but before I celebrate it, I want to be honest about what caused my initial hesitancy: Skepticism around whether the author was the right avatar to become celebrated for talking openly about mental illness. Andy and I are friendly and have that shared “lots of mutuals” Venn diagram which makes people feel connected. In short, I knew the public-facing version of Andy but actually not much of the human behind. And so my not-overly-generous assumption was this book was going to be more like a press release than a personal journey.

Wow, I sound like a cynical asshole for sure, but societal issues are frequently represented and explained not by the individuals who are most qualified to speak, but instead the people who have the means, access and ‘camera ready’ soundbites. And in doing so they distort the discussion, push aside others, and are ultimately extractive before moving on. The best version of these folks actually do want to help (and yes, I assumed Andy was in this group), but they’re still misunderstanding the impact of grabbing the mic versus using their status to elevate others.

However as the title of this post suggests, I was wrong. Burn Rate is an honest, vulnerable account of a life. A journey that Andy is still on, but at a point where he’s ready to talk about it. For himself. For those who experienced him along the way, knowing or not knowing the full story. And for those who don’t know Andy but might be on a similar ride (we all are to different extremes). And I am very very glad it got out of the ‘Later’ purgatory. I’d urge everyone to read it for themselves.

Before I hit publish on this, there were two things that especially stood out for me:

A) Family is everything. The family Andy was born into, the one he extended into via marriage, the one he’s creating with his amazing wife and child.

B) The parts of us that we know aren’t our best selves but we also fetishize their ability to drive us to success, and worry that without them we’ll somehow be less. Andy has lived this. I’ve lived this.

Thank you Andy for Burn Rate. I learned about you but I also learned about myself.

Seed Stage Founders Undervalue Angels With Marketing & Comms Expertise

Why Bringing These Two Skillsets Onto Your Cap Table Early Is Worth It

In 10 years of venture investing I don’t think I’ve ever participated in a seed round which had less demand than supply. From a macro sense, you can thank the bull run our industry was in for the last decade. And then specifically there’s surely some social proof dynamics as well — I’ve always believed that if Homebrew commits to your seed round the risk of not raising the amount you want basically goes to zero (equally so, since we see many opportunities from coinvestors, there’s often already capital coalescing around the startup).

In addition to our dollars, we are eager to help founders with the construction of their cap table, not just generically with the highest profile folks available, but more specifically where they might get some help along the way. Some angels are what I’d call Type O Negative in that they are so universally beloved and dynamically useful that we’d welcome them into *any* investment. More often though it comes down to a combination of circumstances: in what industry is this startup building? What expertise do the founders personally have? Who else is already committed to the round and what do they bring to the table? And of course the angel needs to be interested themselves. Plus all the puzzle pieces in terms of allocations need to fit. It’s not as easy as it used to be!

So while every seed round, and every startup, is its own special unique situation, I will say that there’s a set of skills that I often see underrepresented and which we advocate for including: marketing and communications. I could speculate *why* this gap exists (there are a number of reasons), but rather use the following paragraphs to make the case for including these folks (people like Jen Grant and Ashley Mayer, who we’ve had as advisors for Homebrew companies, and routinely seek to bring into funding rounds whenever they’d like).

  1. Founders Often Don’t Come From These Backgrounds…

Founders seem to disproportionately come from engineering, product and sales/business unit career paths. Seed cap tables are about adding new perspectives and abilities, not just another 10 angels who share the exact same background as the founding team.

2. ..Nor Do VCs

While there are excellent counter-examples, your VC also likely didn’t spend their career as a marketing or communications leader! While I believe I personally was one of the best product leaders of my timeframe when it came to understanding the nuance and strategies of comms [yes, I just broke my arm patting myself on the back], I’d still defer to people like Ashley or Aaron Zamost if they disagreed.

3. Seed Stage Startups Don’t Hire Fulltime For These Roles, And Certainly Not Senior Hires

These roles typically become FTE in your growth from 10 to 50 employees, not 1–10. So get them on your cap table instead of your org chart, versus just lacking access to this DNA until post-Series A.

4. Best Practices In Marking & Comms Are Highly Extensible

There are certain types of help that’s difficult to get if the person providing the input isn’t deeply involved in your day-to-day. And definitely once they’re on board fulltime, marketing and comms will be even more valuable. But at the same time, for seed stage needs, I’ve generally found they can provide much value ‘on demand’ without having to be caught up on the intricacies of your business.

5. Seed Stage Needs Here Are Usually About Preventing Things From Going Wrong

There are startups who are just amazing at marketing and comms from Day One, but for many it’s not an immediate critical workpath. You’re trying to build a software product, do customer development and find PMF. *But* doing marketing or comms poorly can create huge wastes of dollars or in the worst cases, get you in trouble. So think of these angels as risk management that can eyeball your general plans, and called upon strategically if there’s an unexpected issue to navigate.

6. Hiring Marketing or Comms Consultants/Agencies At Seed Is Often a Terrible Idea

What a waste of money (and time) to engage with mediocre or junior talent. The reality is that the best ‘for hire’ practitioners here are not doing seed-level consulting. It’s just not worth their time. And so instead you get what you pay for. This wasn’t always the case — there used to be, for example, a roster of excellent comms folks and even boutique agencies who enjoyed consulting for very early stage startups, but they’ve all gotten hired by VCs or growth stage companies, or themselves moved into more strategic upmarket roles, charging as much as the best lawyers, exec recruiters and other top tier service providers.


So there you go. Please make an effort to bring marketing and comms angels into your seed round. And when I specifically recommend this, and you ask ‘why,’ expect this URL in your inbox. Cheers!

Three Startup Pitch Deck Mistakes That Are Red Flags For Venture Investors

Fortunately They’re Really Simple To Fix!

You might think my job is about saying “yes” to founders, but statistically it’s *actually* about saying “no,” given we typically see 3,000+ companies annually in order to make 10–12 investments. Despite the volume, each opportunity to hear or read more about someone’s idea is a privilege and I try to treat it respectfully, despite not being able to spend meaningful time on the majority of inbound we receive. Hopefully every startup finds the right investors!

Some entrepreneurs are born salespeople, others find it more awkward but ultimately realize getting comfortable pitching — to investors, to the team, to potential employees, and so on — is part of the job. And without this talent, the risk unintentionally lowering the probability of building the success they desire.

The deck you send to an investor is often the first opportunity you have to tell your startup’s story, and there’s lots of great material out there on what a deck should do. But there’s fewer posts on the classic, and repeated, mistakes people make in these summaries. Here are three of them, which I believe will make most VCs lean towards the “PASS” button…

  1.           Don’t Put an Exit Slide in a Seed Deck (or any deck before growth round IMO)

I see these most often when entrepreneurs come from regions/cultures where tech startups are still new, or the investors they’ve been pitching are more traditional non-venture groups. But as a venture investor, I hate it. So much so that I wrote an entire post earlier on this topic alone. Here’s the most salient portion from that essay:

Why don’t I like to see “exit” slides in seed decks:

Narrows Thinking: Usually conceived based on what company is today, not what it can be

Speak of the Devil & He Will Won’t Appear: Often talks of different acquirers and market comps. Companies don’t get sold, they get bought so just go and build a big business. By ID’ing potential acquirers too early one may obsess over their market moves, etc.

Tell Me How You’ll Create Value, Not Just Realize It: Build a big profitable business. If you can do that (which is hard enough), I guarantee you there will be exit opportunities. Don’t try to reverse engineer.

Suggests Risk Aversion: Makes me wonder whether entrepreneur is looking for quick cash out rather than wanting a venture partner for a longterm company.

2. Focus on Milestones You’ll Use This Funding Round to Achieve, Not Just Time It Buys You

18–24 months. 18–24 months. 18–24 months. That’s what I see most often on fundraise slides. But companies don’t earn rounds based on how long they’ve been working since the last fundraise! They get more capital because they’re learning, growing, achieving. Tell me what you’re going to accomplish with my dollars as the headline. Then support this with how long you think it’ll take and why this capital is 100–125% of what you’ll need to get there.

3. Founder/Team Bios Which Feel Deceptive

Nice pictures of happy looking cofounders. With a bunch of education and corporate logos underneath. First and biggest are GOOGLE! HARVARD! Then I go to LinkedIn and see you have eight years of work experience, of which Google was a summer internship in operations team while you were in grad school. And Harvard was a two week executive ed course. And I wonder why you are playing these games with me, when I rather hear about where you actually worked or why you decided to study philosophy at a perfectly fine state university (or skipped college all-together).

Look, I get it, you’re trying to draft off the social proof of some credentialing, hoping that it at least gets you in the door, and fearing that without these logos, you won’t be able to permeate the notoriously homogenous (but changing!) faces of venture capital. But I truly believe you’re doing more harm than good when you push away your real lived experiences for what you think I want to see. At best, you’re going to get the investors you deserve (bad ones who care mostly about status), and at worst, you’re going signal lack of self-confidence, when we should be building mutual understanding and trust.

As with all advice, Your Mileage Might Vary. There are lots of different investor mindsets and preferences in what they fund. Don’t listen to me if this doesn’t ring true to you. But after thousands, and thousands, of decks, these are three slides that distract me and if I’m making quick judgment calls whether to lean in or not, cause me to pause.

Best of luck!

Celebrating Milestones Doesn’t Kill Your Ambition. I Realized This Too Late To Enjoy Many Of Them.

One of My Liabilities as a Leader Was Not Acknowledging the Wins Along The Way

“I don’t want praise, I want to know what I could have done better.” For years this was my default response to even the smallest of positive feedback. Forget the PROS, I just want the CONS.

There were a variety of reasons for this posture: a strong conviction in the value of lessons learned, a desire to learn from those I respected. But if you really pushed on it, there were layers of fear and insecurity on the other side of the self-confidence cookie. The things which didn’t doom me this time might catch me next go round, so let’s get on top of them. And an intense concern about complacency, as if any satisfaction in my work (or my life?) would cause me to stop seeking excellence, remove the chip on my shoulder, dull the edge, or whatever your metaphor of choice.

I’d heard the sayings, in print, from colleagues. In this world raised nails get pounded down. Compliments are arrows from the mediocre, meant to reduce your ambition. And with a 20something/30something’s amount of testosterone, I didn’t want to be pounded down. Didn’t want to be mediocre.

When I think about my career during those years there’s always a recognition that perhaps hearing some praise wouldn’t have killed me. These days I’m able to smile more and try to bring the ‘how lucky are we to be doing this work’ mentality to those around me. So present day Hunter is better.

That doesn’t make up for the way I treated my teams and colleagues though. I was the quintessential “don’t stop and smell the roses, do you know how much more there is to do until we win? Be happy then!” manager. Urging people forward towards a set of goalposts that would never get any closer.

Sounds like a recipe for burnout, feeling under-appreciated, and like I’d never be satisfied, right? Well, I’m sure some people experienced me that way and for that I’m sorry. I like to think the care for them came through in other ways but in hindsight, there was a level I never reached in terms of empathetic leadership.

Colleagues of mine, some in the product org, some outside of it, were much more attuned to these needs, and for that I’m really thankful. They knew when a happy hour, or t-shirt, or ‘send this email out to the team’ was needed and were able to extend our culture in ways I fell short.

So why write this? Because I work with a lot of CEOs where I recognize some of the same traits. They do care about their teams deeply as human beings but work to find their own balance of “let’s celebrate” and “push harder!” And as individuals there’s often the same desire to critique themselves without pausing to take a breath. In my experience it’s not about first time vs repeat entrepreneurs. Men vs women. Old or young. It’s not universal but it’s prevalent. And so I’m just hoping that my own reflections help set some of them at ease with their own struggles.