Tech Reporters, You’re Being Played By Using “Oversubscribed” To Describe Successful Funding Rounds

Why I Cringe Every Time I Read This Word

I recognize this is an overreaction. But humans have their quirks and one of mine is I cannot stand when the tech biz press uses “oversubscribed” to characterize a startup’s funding round or a venture fund’s raise. Before I share why, let me just explain what it means and is intended to convey in a financial context.

When a founder or a VC claims their round was oversubscribed they’re signaling to you that they had way more investors competing to give them money than they wanted to raise. It has nothing to do with the size or terms of the actual raise, just the presence of greater supply than demand.

Ok so why is it foolish for tech reporters to repeat this somewhat cliche talking point?

  • It Leads To A Prisoner’s Dilemma/Race to the Bottom of Hyperbole: Well if every other company is saying they were oversubscribed then we should say it too. No, even better, let’s be specific and say something like “we were 5x oversubscribed for this round.” Yeah, that’ll show em. Until 10x oversubscribed is claimed by the next startup. And so on, and so on.
  • Counterintuitively, It’s True of Most Reported Rounds: If a startup or a fund can reach its targeted amount, it can be ‘oversubscribed’ with the next dollar of interest. In fact, at that point it gets easier to raise the incremental capital, not harder, because you’ve solved the social signaling issue by attracting all the previous investors. In a single raise, getting your first investor is harder than getting your 101st. This is especially true when the quality of previous investors is high. There hasn’t been a seed round Homebrew participated in that wasn’t ‘oversubscribed,’ especially after we committed and signaled to other investors it was, at least in our minds, a startup to back. And I’d reckon same is true of every other peer fund of ours. And every Homebrew fund has had excess demand as well.
  • It’s Easy to Manufacture By Playing Cute With Figures: “We set out to raise $10 million and raised $10 million” = not oversubscribed. “We set out to raise $8 million and there was so much demand we raised $10 million” = oversubscribed. They are the exact same fundraise and the press will cover them differently. Which is nuts! Especially since most VCs will tell a startup to not price themselves out of a round prematurely. That is, go in with a figure that’s slightly below the total you’d like to raise, or a range, and let the market move you up. If you want to raise a $15m Series A and you’re doing well, but not knock it down great? Pitch people on a $10–12m round and then as folks bite, move the round up a bit. Sometimes you won’t be able to take all the additional dollars without incremental dilution but you’ll still have a much better chance of getting to $15m without scaring away potential investors.

I don’t mean to pick on any publications or specific reporters. In Googling for examples of this trope I happened upon some of my favorite journalists, who write amazing and insightful stuff. I believe though that this is one of the areas that being on the other side of the fence provides clarity on just how silly a term it is. So let’s put a stake through the heart of “oversubscribed” and just let a fundraise be a fundraise.

“I Can Really See Us Leading This Funding Round” Isn’t a Term Sheet

Why VCs Are Always ‘Very Excited’ About Your Progress But That Doesn’t Mean Anything Until They Make an Offer

My job as an early stage investor includes translation services, specifically helping startup founders take what they are hearing from potential investors and providing a read on whether that VC is actually ready to make an offer. Quite often a CEO will share all sorts of positive comments and praise they heard from an investor, and I’ll remind them these statements aren’t termsheets. Simply put, only a termsheet is a termsheet.

This reminder tweet set off a few good discussion threads that I wanted to capture and expand upon here.

Even experienced founders get ‘happy ears,’ not just first time founders

I definitely don’t blame founders for underestimating the distance between enthusiasm and a concrete commitment. VCs live in that world and have repeated experience. To the extent you trust your current investors’ feedback, you should *really* trust them when it comes to basic fundraising advice. Note: I understand that there are reasons to assume your investors are giving you advice based on their interests, not yours, but let me tell you, for the best VCs this isn’t the case. That’s not to say we’re always correct, but I will specifically tell a founder ‘and now I’m putting on my Homebrew hat’ when I have a POV that’s informed by my own needs as their capital partner versus what I generally think should be the company’s strategy. And I don’t take paths off the table for discussion that wouldn’t necessarily be my preferred choice.

Others VCs definitely know what I’m talking about

Everyone has experienced a termsheet that came with hidden surprises

Differences between the verbal offer and the provided termsheet; unacceptable clauses added; lots of noncommittal language ‘pending due diligence’ etc. We all have stories of a termsheet that didn’t pan out — either it never arrived even after it was promised. Or it was pulled for no reason. Or the investor didn’t have the money to close the commitment. And so on. This rarely occurs with established investors, because they know breaking their word is a reputation killer around our community. But it still does.

One of the benefits of working with someone like us, or Ed Sim at Boldstart, or one of dozens of other firms I’d recommend, is that you have some insurance against new investors fucking around.

Are VCs being duplicitous by always being ‘excited?’

I value coinvestors who run quick, direct processes with our founders, but I expect a certain amount of interest that doesn’t convert, especially early in a process. Ahead of having to make a decision, it’s always in the interest of an investor to stay in the game. This isn’t unique to the dynamics of fundraising, but a ton of person to person interactions. Whether it’s a hiring manager holding some candidates at bay while they continue interviewing. Or simply me telling someone I’ll “try to attend their afternoon BBQ” as opposed to just saying no right away. I don’t generally hold any ill will towards these types of responses, especially when it’s ahead of, or during, a first meeting with a founder.

Can someone develop a reputation for being a Mr or Ms Maybe or overpromising and underdelivering? Sure. Satya and I have a list in our heads of GPs who we think do this and help our founders manage those conversations accordingly. But I really don’t think it’s outright duplicitousness, just the incentive gap between two parties: a founder wants to raise a round within a certain time frame and align all bidders, while an investor often wants as much information as possible and barring high conviction or a forcing function, will often move slower than the founder. The phases of fundraising, how to get to a first term sheet, and what to do once you’ve got an initial offer is probably a blog series of its own.

But end of the day, if you screw a founder, they’ll never forget

Addendum: When is a verbal or email offer as good as a termsheet?

My friends Keith (Founders Fund) and Sam (Slow) pointed out that founders can rely on their offers without it being in a formal termsheet. I agree with Keith that an email from a Managing Partner at a Tier 1 fund with all major term components written out is 99% as good as a termsheet. I do not like verbals only — there’s too much potential for confusion is what was said, even in good faith conversations. The best practice I’ve seen is follow-up your call with an email that says something like, “per our discussion, we’re thrilled to offer ….” and include the major terms like Keith suggests.

When would I prefer a termsheet to an email, even with a Tier 1 fund?

A. When it’s a junior partner. Sorry, but if you’re just getting your feet wet at a fund, I want to know that there’s a managing/senior partner behind the offer.

B. When a founder is going to stop most of their other conversations as a result of the offer. Again, just good hygiene to have a termsheet in hand before you start slow rolling/canceling/opting out of other meetings. It’s company specific too. When I believe a startup is a slamdunk in its funding, we’ll use the first acceptable termsheet to eliminate 75% or more of the open conversations and really narrow down to a handful of firms the team is considering.

C. When there’s something non-standard the founders and GP have agreed to outside of the primary terms Keith mentions. This could include anything around board seats, secondary sales, and so on. Again, not because I don’t trust the GP but rather because it’s helpful to see it spelled out in legal language rather than short-hand intent. Maybe if your GP went to law school (again, hi Keith), I’ll be ok with just the email and its phrasing.

We Don’t Talk Enough About Money In Silicon Valley, Revisited

Things to Remember As You and Your Friends Get Wealthy

“Giraffe money.” That’s the phrase which stuck with me from Erin Griffith’s NYTimes article this spring about the latest set of wealth creating events in the tech community. To quote,

For Palantir, a data analytics company that went public in September, Feb. 18 was “giraffe money” day. That was the first day that current and former employees could cash out all of their shares after the company went public.

In a Slack channel for former employees called Giraffe Money — an apparent reference to wealth that can support casual giraffe ownership — many anticipated their windfalls by sharing links, mostly in jest, to absurdly expensive home listings and boats, one former employee said.

I never heard about giraffes after Google’s IPO, although reportedly one early engineer did buy a carnival-size ferris wheel. But that was back in 2004 and the trillions of dollars of wealth created since in startups, big tech companies and crypto makes earlier questions of extravagance seem quaint.

We are truly in a k-shaped economy and for those fortunate enough to be in the top arm of the K, it’s easy to benefit from being in the right place at the right time.

So I wanted to reshare a post I wrote suggesting that we actually don’t talk about money enough in Silicon Valley, at least not in the transparent and healthy ways that allow us to consider its impact.

https://hunterwalk.medium.com/we-dont-talk-enough-about-money-in-silicon-valley-no-really-e9335367e733

Reading it back 3 1/2 years later it still rings true for me personally. We are well-off and happy, those resources having played a significant role in mitigating the risks of the pandemic and the anxiety of a disrupted world. I still worry about the tension between wanting to provide my daughter more experiences and luxuries than I had access to as a child, but not distorting her values or work ethic. Some of the founders we backed in Homebrew’s first fund have realized — or will soon realize — outcomes that will net them hundreds of millions and perhaps even billions of dollars. And I’m thrilled for them and their teams.

More recently we launched an effort called Screendoor to help fund new emerging venture capitalists from underrepresented populations. The idea being that there’s economic opportunity in this segment that’s not being captured today, and there’s a chance to start a virtuous cycle where the investments they make will likely include folks in their networks, who will also hire people in *their* networks, and everyone succeeds together. Those of us who’ve had access to the right hiring manager, or cap table, or referral network have already put ourselves in a position to capitalize, but the pie can be expanded. It’s not about scarcity, it’s about abundance.

Ok, please read my earlier blog post and tell me what you think. I’m off to research how much it actually costs to privately own a giraffe….

2 1/2 Angel Investing Mistakes You Can Easily Avoid

I Made These Mistakes A Few Times But You Don’t Need To

Part of successful angel investing is picking winners. Another part is avoiding picking losers. Before we founded Homebrew I made ~20 or so investments in startups using my own savings. I wasn’t necessarily trying to do anything impressive, just taking some risk capital and putting it towards people and products that struck me as compelling. All in all it worked out fine, driven primary by some fortunate acquisitions to companies like Microsoft, Pinterest and Facebook, the latter two in pre-IPO equity which grew substantially prior to their public listings. I never really tracked IRR or net returns, but I did pay close attention to ‘lessons learned.’ Here’s 2 (and a half) mistakes I made that you should avoid

Sin of Ego: Never make an investment as an angel believing that you can be the difference between a team succeeding and failing. A couple of times I encountered very likable first-time founders who were operating in an interesting problem space but lacked strong product instincts or experience. Should have passed and wished them luck, but instead an internal dialogue started. “Hunter, you’re a ‘product guy,’ just coach them up and you’ll have a huge winner on your hands.” Next thing I knew hands were being shaked and wire transfers sent. And the investment pretty much went to zero within 12–24 months.

As an angel investor you can certainly be helpful, and perhaps even de-risk a specific question or problem the founders face, but you aren’t on the org chart, aren’t spending enough reps to be the product manager of a product-led company. Your mileage may vary, but believing you’re the difference between a company succeeding and failing isn’t an investment thesis. Sure, if it’s a problem area that’s a personal mission for you and you want to spend a disproportionate amount of time trying to help them figure it out, go ahead, but know at that point you’re making an emotional, not financial, decision.

Sin of Enthusiasm: Summarized as “shut up and listen to the founders describe how *they’d* build the company/solve the problem.” You know when you really hit it off with someone and it’s just an amazing jam sesh? Like you’re just finishing each other’s sentences? Feels great right? Well, if it’s in the context of an angel investment it might not be. Did you walk away excited because of what they said or because they agreed with you? Do you have a sense of how they problem-solve? How they want to build this company? Or do you just have a notion of how you’d do it? Well it’s not your company. It’s theirs. And before you invest it’s probably better to understand how they want to build it, since, well you know, they’re going to be building it.

In some ways the above two mistakes are sides of the same core principle: don’t invest in people because of your ideas or your capabilities, invest because you believe they are capable of building something amazing. Then if your help simply gives them the chance to move faster with a high probability of success, you’ll have more than earned your spot on the cap table.

Ok, now that half-mistake….

Sin of Social Proof (unless it’s your specific strategy): Some folks will tell you the best strategy as an angel investor is simply to find a handful of great investors and get into every deal they do. If indeed you can execute this it would seem to be a reasonable way to try and match their performance. But if you’re *not* following this sort of playbook, my advice is to not take the presence of ‘other smart people’ in the round as evidence that it’s a good investment. Especially if it’s collections of small checks. And doubly so if you yourself don’t think it’s a solid opportunity. I certainly had my one or two “eh, I’m not sure about this guy” moments where I still wrote a check because of the heat around the deal. You know what, those were incredibly disappointing experiences. And I should have trusted my judgment. So my half advice is, if you want to train on social proof, go all in, but otherwise trust your judgment at the end.

Have fun! And make different, more complicated mistakes 🙂

End of an Error: As Conan O’Brien Wraps Up 28 Years of Late Night, I Was an Idiot to Leave the Show

What I Learned From Working On Conan’s Season #2 and My Own Fears

Actor John Lithgow playfully tossed a show at me, boxer Larry Holmes jokingly (I think) threatened to knock me out and actress Jennifer Tilly might have flirted with me over the phone until she realized I was just an intern and not a Segment Producer. Memories like those, plus a dressing room sign with my name on it, were what I took away from interning on Season Two of Late Night with Conan O’Brien while in college. And looking back, I never should have left the show.

Conan bid farewell to late night TV this week after an amazing 28 year run, an incredible milestone by anyone’s measure, but especially impressive given where he started: a talented writer but minimal on-screen experience. When I joined, Late Night aired at 12:30am and was still on quarterly renewal cycles, meaning that NBC hadn’t yet even decided to give Conan (and his team) the stability of an annual commitment. Despite his rawness two things were clear: (a) Conan is wicked smart and (b) they assembled a team of new voices who were willing to take risks and commit to the mission of the show. Sounds like a startup, no?

So what was I doing as part of this group? Primarily researching upcoming celebrity guests and drafting potentially interesting interview questions. If they’d been on the show before I rewatched the previous appearances to note stories they’d already told and/or callbacks/running gags that could be revisited. And every once in a while I fact-checked monologue jokes or ran across NYC to pick up celebrity-related props (the vintage denim jacket photoshoot they appeared in pre-stardom, the Japan-only release of a terrible movie they’d try to bury) — you have to remember this was 1994–95 and the consumer internet was still largely in its formative stages.

My time on Conan meant that I spent much of my senior year at Vassar off-campus in NYC, crashing with family and friends, or taking early morning and late night trains to/from Poughkeepsie. My senior thesis on America’s first national women’s magazine filled the other available hours, especially since the primary research could only be done in the special collections room of our gorgeous library. And thanks to a supportive professor, I was able to spin the talkshow experience into another independent study project on the importance of celebrity in American political history (Davy Crockett, Daniel Boone, Ronald Reagan), which gave me all the credits I needed to graduate with the rest of my class.


Several folks from my intern cohort joined the show after graduation but I was not one of them. Late Night had begun to pick up some momentum and the signs it could be something special started to spill beyond our small Rockefeller Center offices. Why didn’t I look to stay? Ego mostly. I thought I was ‘smarter’ than the other new hires and decided to take a job in management consulting. But if I revisit that internal narrative it was probably also that I was afraid to be 100% myself. If I tried consulting and didn’t achieve I could always tell myself that it was because the job was just a costume I put on, something I did because it paid well and had the respect of my peers and family. Picking something less important to me provided an excuse and protected my most vulnerable questions: was I creative? was I interesting? was I liked?

I left management consulting after the analyst program ended. With more confidence and self-awareness steered towards a next set of career choices which corrected the identity gap, embracing the idea there’d no longer be a separation between Hunter the Person and Hunter the Professional. 12 years at the intersection of creativity and consumer tech, followed by starting an venture firm with a friend and former colleague to back founders who were on their own missions.

And now in 2021 despite overflowing with joy and satisfaction on what’s been done and what I still have left to do, there still sits one truth: that if I’d had more guts, I never would have left Studio 6B in 1995. Maybe I would have been there through 26 more years (and a few location changes). Or eventually left the show with my boss, who went on to become an early producer on Rosie O’Donnell’s, and then and Ellen’s, shows (remember, I mentioned the early Conan team was *very* talented in their own right). Or be somewhere else in the mix of media, technology and entertainment.

Is there a lesson? Basically if you have the chance to join a 6’4″ flame haired wonderkid on a cutting edge new project, please take it. Whether it’s a tv show, a startup, a marriage or anything else that feels *so right* for you. Even if you’re a little scared. Actually ESPECIALLY if you’re a little scared.

Don’t Let Your Best Product Managers All Become People Managers Or Your Company Will Suffer

Why Ken Norton’s Dual Product Management Career Path Can Also Encourage Innovation At Scale

Rising to your level of misery” is how Arthur Brooks frames the trap of being good enough at your job that you continue to climb a corporate ladder until arriving at a rung which leaves you in a role that makes you miserable. And oh my does this concept speak to my own experiences as a BigCo product lead. I don’t blame my previous employer but rather my own inability to reconcile happiness vs striving and ego, but after reading Ken Norton’s essay advocating for dual Product Management career paths, I’m think it’s also an org chart issue, not just a personal one!

Ken’s argument is that most tech companies treat product management careers in a very different way than they do engineering and design. Namely, there’s typically not a ‘terminal point’ where you can stay a contributing individual contributor (it’s more ‘up or out’) and, more importantly, an advancement track which focuses more on the PRODUCT and less on the MANAGEMENT. Not an IC role per se, but one where you manage the product resources for a project scope, not for a division.

There’s a reason that I support this amended career ladder, and it’s not just about personal preference, but instead it preserves what I believe is a necessary component for innovation in large companies: the effective, but independent, product leader.

Organizations by design as they grow, scale with people who thrive in more complex hierarchical environments. While the traditional org chart structure might one day be replaced by more evolved thinking better suited for technology-driven economies it has dominated capitalism since industrialization. For what it’s worth, I’m not disregarding or criticizing the people who fill these roles or rejecting the notion that large companies can’t innovate or do good work. But I also don’t think it’s controversial to suggest that the amount of process and structure do challenge certain types of individualistic thinking and the challenging of norms.

Now, combine the bias in org structure and people attracted to that environment with an incentive structure dependent upon pleasing your boss. At larger, more mature companies your opportunity for wealth accumulation is tied to advancement. Advancement is very directly linked with making your boss happy so they can make their boss happy, and so on. (Sidenote, this is why I think the best compensation systems don’t let the direct manager control the purse, but instead heavily incorporate their feedback into a 360 degree process, self-evaluation and other more measurable criteria).

So, in my experience, the senior product managers who had also opted out of the standard VP promotion track, were also the truth tellers, the culture carriers and the inglorious but complex work-doers. This is an important distinction: they’re not ‘rest and vest’ — they still want to work hard on actual projects; they’re not ‘bomb throwers’ — they’re just people who understand the company and can ask questions that either wouldn’t occur to newer employees or who don’t rock the boat.

At Google during my period these were mostly folks who had been around pre-IPO or soon after, and just wanted to stay around to work hard but not assume organizational ownership roles. They had reached a comfortable level of wealth from that early compensation, and grew up around the colleagues who were now in senior roles (ie they were trusted and knew how to get stuff done). The smartest product VPs would grant safe haven to one or two of these folks with an implicit quid pro quo: I’ll keep you our of unnecessary meetings and politics, you can work on hard projects with small teams, and I’ll reward you to the best of my abilities but you’ve probably maxed out on salary band levels if you can’t get promoted. I had one of these people on my team for a bit and it was glorious for both of us.

So what does Ken’s framework do? It lets these people continue to advance and get awarded for that advancement, eliminating the need for these folks to only be individuals who carbon date back to the earliest days of the company.

Anyhow, please read Ken’s essay. As hopefully articulated here, I think it’s not just a potential solution to talent retention and personal happiness, but could also help preserve innovation as companies grow. Thanks Ken!

We Raised $50m+ To Back New Venture Capitalists Who Don’t Look Like Me

It’s weird to try and help fund people who are going to compete with me, right? Well, I couldn’t be more excited to do just this.

The 10 initial Screendoor Venture Advisors

Ok, the headline is announcing Screendoor, a $50m+ collaboration of some like-minded early stage investors to back new VCs from underrepresented groups (basically people who don’t look like me). Alex Konrad/Forbes covered the announcement and has some good details, plus our own blogpost. This initiative matters a lot to me because we’ve purposefully designed our fund (Homebrew) to not grow in partnership size and not be multigenerational. So in some ways, alongside the companies we’ve backed directly, Screendoor represents the best way for our values to live on beyond our firm. A few additions to the links above that I think are worth emphasizing or sharing our thinking.

Why Now?

Satya and I have been thinking about ways to punch above our weight in this area since we started Homebrew, but in order to have the credibility to do so, needed to get our own firm built first. We want future “Homebrews” to be started by all different sorts of people and believed adding capital commitments to mentorship would be the best way to accomplish this. It can’t just be about supportive tweets or ‘office hours’ – write the damn check.

Besides hitting a point with Homebrew where we felt like we could add on Screendoor’s responsibility, the events of the last few years galvanized our desire to work on economic inclusion. And frankly, much of the venture industry is moving too slowly, making incremental hires or diluting the impact of their diversity statements with self-serving content marketing efforts. I know this is ‘apples and oranges’ comparison, but it always makes me laugh when I hear my peers say “diversity is important but it takes time to implement” while also watching my industry quickly embrace any new way to make money (SPACs! Crypto!).

Screendoor is 100% an economic vehicle, not a philanthropic one, but we decided to make it ‘no fee/no carry’ so that all the profits flow back to the investors, not us middlemen. And we’re all LPs (investors) in the fund itself, which means we have skin in the game.

Partnering With Other VCs To Get This Done

It was important from early on to get some of our favorite other firms involved. Homebrew may have helped catalyze and structure Screendoor, but it’s bigger than us. It’s stronger because of the people involved and their relationships within our industry. It proves that firms which often compete in the market can come together for a bigger purpose and mission. And it augments the lived experiences that Satya and I possess with other men and women from different backgrounds, cultures, etc to create a broader value proposition for the firms we’ll be backing.

Making Sure The Capital We Raised Was Additive

This one is a bit subtle, but for us, meaningful. If the $50m+ raised by Screendoor was pulled from sources of capital that was already earmarked for underrepresented emerging managers then all we’d be doing is transferring it from one allocator to another, not growing the pie. This is specifically one of the reasons we fashioned it as an economic vehicle, not a philanthropic one. The LPs backing us are all heavily committed to the venture ecosystem but have deployment models which often make it difficult for them to invest in smaller, first time funds. Why? It’s typically an issue of their check size vs fund size. A first time manager might be raising a $5-$50m fund but large institutional investors write $10m, $25m, $50m+ checks into venture funds. Also, they are looking to back mangers who have track records, etc. Screendoor hopefully will help solve the ‘chicken and egg’ issue of “you want to back managers with track records but I need to raise a fund to get a track record!” And over time, I believe many Screendoor managers will create direct relatonship with our institutional LPs.

Honoring Others Doing This Work (and Hopefully Collaborating With Them Too)

I call it “Columbus’ing” – the tendency in tech for individuals new to spaces already inhabited to pronounce “look what I discovered!” as if they’re pioneering something completely radical despite the fact others have already been there doing the work. We honor and appreciate everyone tackling diversity in tech. We want to collaborate with them, learn from them, go to *their* spaces to talk about Screendoor. We’re going mess some stuff up probably. We’re going to be slow to respond to everyone while this gets started (did I mention we’re hiring) but we’re 100% committed and going to hopefully make this an evergreen effort, not just a one off fund.

I’ll try to add new questions/answers here as they occur to me or you ask them. And please visit Screendoor for everything you need to know about applying for backing from our group.

How Pro Skateboarder Tony Hawk Made Me A Better Parent

Teaching my daughter that ‘adventure boo-boos’ are part of life

I come from a family of flinchers. Well-intentioned of course but with an instinctual urge to ask “is that safe?” before proceeding. Perhaps Darwin favors this trait in humans and long ago the majority of my look-before-you-leap ancestors did not fair so well.

But when we had our daughter, I wanted to find a new intermediate point between seeking absolute safety and Wile E. Coyote. Some parenting guides suggest that asking “are you ok?” when a child falls down actually encourages them to feel *not* ok because it increases the alarm or reinforces they’ll get pleasurable soothing if they show distress. [Lest people think that I stared silently at my toddler when she tripped on the sidewalk, I substituted “you are ok!” as an assurance.] And so Adventure Boo-Boos were born.

We don’t recall when Adventure Boo-Boos officially debuted as description but it likely coincided with the debut of my daughter’s enthusiasm for climbing very high up on playground equipment or trees. Soon scrapes, bumps, skinned knees and similar were deemed “Adventure Boo-Boos” — to be celebrated not feared. Make good choices and if you still fall, the abrasion was a form of epaulette, recognizing your life experience.

Our family was a few months into Adventure Boo-Boos when we were strolling down Valencia St one weekend afternoon. Passing a streetwear shop our kid paused, noticing the television set up inside which was playing a loop of skateboarding videos. She walked in and placed herself on the couch, evidently attracted to the stunts. I sat down next to her and started explaining what she was seeing.

It was the epic 1999 X Games (coincidentally held in San Francisco) and Tony Hawk performing the sport’s first ever 900. The 900 refers to a 900 degree airborne spin, 2 1/2 rotations. As shown in the clip below, Tony tried the trick a number of times during the performance, all unsuccessfully, until he finally nailed it.

Each failure resulted in some degree of bump, bruise, or fall. After a few of these my daughter pointed to him and said “Adventure Boo-Boos?” Yup, Adventure Boo-Boos for sure, I told her and then we watched him end with a victory. She clapped. I smiled.

Parents live for these organic teachable moments so I considered it a karmic sign when the next day my friend David tweeted about fundraising for the Tony Hawk Foundation. After a quick DM exchange and small charitable donation, a signed skate deck was on its way to my house. We hung it in our breakfast nook, where it remains today.

“Astrid. I get adventure boo-boo’s too! Tony Hawk”

The Great Talent Reshuffling of 2021 Has Begun

Why the next 6–12 months will be the best time in a decade for startups to hire

Our YOLO Economy New York Times’ Kevin Roose labeled the new attitude sweeping workers in certain privileged parts of the economy.

But for many of those who can afford it, adventure is in the air.

One executive at a major tech company, who spoke on the condition of anonymity because she was not authorized to talk to the media, said she and her husband had both been discussing quitting their jobs in recent weeks. The pandemic, she said, had taught them that they’d been playing it too safe with their life choices, and missing out on valuable family time.

I’ve seen this in my own circles as well. Whether it’s moving to a new geography for a fresh start (for some, maybe just an Adventure Year) or leaving a safe but stagnant career, the “I’m starting a new company/open to a new gig” inbounds are up since Jan 1.

But it’s not just a new appreciation for the preciousness of one’s time and focus after a year of social distancing. We’re also seeing people vote with their feet towards companies which share their values and away from companies that, in their mind, violated a social contract. The company’s business matters too — the agriculture, health care, financial empowerment startups in Homebrew’s portfolio are all telling me about an increase in candidates who mention the mission as a reason they’re attracted.

And oh my goodness, we’re going to see a lot of transitions as companies head back from health-required distancing and settle into a longterm decision about work. Back in the officehyrbidfully remote. There’s surely going to be 5%?, 10%?, 20%? of teams for which a CEO’s decision won’t match with what they want from a job.

Receptionists, for example, need to be in the office five days a week, Burke said. But she envisions most other jobs being “flex jobs” where employees can choose to work remotely at least 50% of the time. There will then be jobs that can continue to be fully remote, but DocuSign will leave those decisions up to senior managers.

“The truth of the matter is, this is just a big experiment that we’re all in and none of us really have an answer,” Burke said. “We just have to stay open and fluid and listen to our employees.”

Employees are going to vote with their feet and I feel for People Ops teams who are going to be having a tremendous number of emotional conversations.

With understaffed HR teams increasingly working with algorithms instead of coworkers, it’s easy to forget that employees are people — people with families, hobbies, and rich inner lives that often go unnoticed and unacknowledged at work. Empathy is not a math problem. And even if most of us aren’t crying behind the webcam, it’s never been more important to know how employees are feeling.

Overall though it’s fantastic and will give high performing companies of all stages a chance to really bring talent together a way that before maintain a greater number of frictions. Here are some things I’m seeing the best startups do to prepare for the opportunity:

  1. Build a Stretch Headcount Budget -> Sometimes you gotta bust the headcount plan when there’s a chance to make key hires. It most commonly takes the form of a budgeted head that you want to add earlier than planned, or adding an incremental hire to an existing team (ie one more engineer than otherwise planned). I’ve seen many first time founders overthink (or overestimate) the financial impact. Hiring a ‘bird in hand’ just a quarter or two earlier is typically a rounding error when it comes to incremental salary for a high performing venture backed company. Especially versus the ‘cost’ of running a full search process later on and risk of schedule delays. Plus, given the current retention environment (what this entire post is about!) it’s worth adding someone great, especially if they’re a known quantity to you or a current team member. So I’d advise talking with your team leads and your investors now about willingness to go a bit ahead of FTE count this year and running the models to show implications. Typically it’ll pull in your “cash out” date by 15–30 days, which again, for a high growth early stage startup, is a bet you should often take.
  2. Double Down on Passive Candidate Outreach -> Flood the zone! Seriously, ping the folks who might have turned you down previously just because of timing. Have your team reach out to the best former colleague or friend in their network and make the pitch. Sort your through company social media followers and newsletter subscribers and reach out to anyone interesting. There’s never been a better time to try.
  3. Company Culture “Data Rooms” -> Collections of internal communications and documents which allow candidates to see if the walk matches the talk. Sometimes it’s company all hands videos or slightly sanitized Board decks. Private company podcasts are increasingly something shared with candidates and new hires, telling the story about the company and the people involved. Especially effective to help with questions around authenticity and solving for distance in a remote hire situation. Note, these are usually opened to senior candidates and/or shared at the point an offer is made.
  4. Don’t Forget the Partner/Spouse/Families -> I can’t believe I’m giving away all my hiring secrets here instead of holding them back for Homebrew founders! Ok, you get the 50,000 ft summary instead of specific tactics then (c’mon, venture is competitive, I gotta hold back a thing or two): Don’t forget the other influencer’s in a candidate’s life. Namely, their family/partner/spouse. Especially given the intensity of this past year, there are often dynamics that you might not have full visibility into. I’ve seen longshot hires successfully made because the spouse was actively and appropriately ‘sold’ by the startup. And ‘90%+ likelihood of closing” candidates lost because the founders didn’t have full visibility into the evolving personal situation and preferences at play.

Show me the first 20 hires of a startup and I can usually tell you whether they’ll succeed or not. Since we invest well before this milestone is reached (often it’s just the founders), helping the startup build their teams is one of the most important things we can do at Homebrew. It’s why we brought on a Head of Talent during our first years who works directly with founders on their hiring strategy, not just sourcing and process (although that too).

There’s never been more talent thinking about what they might do next. Go hire them!

Employee Surveys Won’t Tell You Whether To Return To An Office Or Not

Engage your team and understand their needs but craft your “Return To Office” strategy from the top down

We’ve backed a wide variety of startups at Homebrew but the CEOs are now all coalescing around one theme: it’s time to start making choices about what ‘back to the office’ looks like (note 95%+ of our investments are based in the US). Some are high conviction that all being back in an office five days a week is the right thing for their company (alongside modern policies around when flexible scheduling and WFH makes sense). Others embraced a distributed team from early on, or pivoted to one during the past year, and shake their head at the idea that a single HQ ever makes sense for a tech company like theirs. And of course, there are those crafting hybrid strategies, utilizing the skills their organizations have developed over 2020 to balance Work From Office and Work From Elsewhere. While I’ve personally advocated for in-office/balanced solutions, there’s one thing I’m absolutely certain about: you shouldn’t make the decision based on an employee survey alone.

Now this isn’t to say that you should develop your “return to office (or not)” plan in a vacuum and spring it on your teams fully formed with no chance to comment. But ultimately it’s going to be the decision of the executive team, and specifically the CEO, who must make the call.

And the Chief People Officers are going to deserve bonuses figuring this stuff out. DocuSign’s CPO Joan Burke concedes, “The truth of the matter is, this is just a big experiment that we’re all in and none of us really have an answer. We just have to stay open and fluid and listen to our employees.”

There’s going to be a TON of news coverage, hot takes, strong opinions, and purity tests on this stuff over the coming months. Assume as CEO that it will be impossible to retain 100% of your employees no matter what you decide. There’s going to be a talent reshuffling for the next 6–24 months IMO as employees decide whether their current employer’s workplace strategy is right for them or not.

And resist the urge to reduce this to assumptions like “equitable workplaces are those with the fewest mandates.” These choices are complex, often with unintended consequences. Flexible schedules more friendly for women? Unclear according to this WSJ article:

Denise Rousseau, a professor of organizational behavior and public policy at Carnegie Mellon University, said hybrid models appear to offer the benefits of both worlds. But they could inadvertently disadvantage women, who shoulder the bulk of caregiving duties and may be more likely to seek more home-based arrangements and miss out on professional face-time, she said. Any solution to one problem will raise other challenges, she said.

The President of Barnard College fears similar and notes it’s about systems of choices, not just a single decision:

So what should well-intentioned companies and managers do? If you think flexible work will boost equity, especially for parents, it is critical to consider what other policies and practices must be in place to advance this goal. Providing paid family and parental leave — as opposed to just maternity leave — and encouraging employees to take it is one example. Ensuring managers do not favor in-person employees for mentorships, in evaluations or for other opportunities is another.

So start thinking about what’s right for your stage of company, the type of product you build, the culture you’ve created, and then prepare for a lot of communication over the second half of the year.