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Is Work Life Balance in a Startup A Good Thing?

What do you think about this (quoting a discussion at

I Don’t Believe in Work Life Balance as a Startup Person. Am I Wrong?

In the discussion on, the person who asks the question is co-founder and CEO of a startup, and is working 60 hours a week. But there are problems:

I wish we all would work like there’s no tomorrow, at least until we reach certain status where we can be confident that we have reached product market fit… However my co-founders have their families and they have to go home when work hours end … I am very dissatisfied because I feel like we can do much more if we tried harder.

If you get into that discussion, you’ll see that the startup community there is divided. There is no consensus.

Just yesterday blogging guru Chris Brogan posted an eloquent argument for balance in his Pay Yourself First:

But when you wonder how I’m getting as successful as I am, oddly, it’s because I’m doing the opposite of what you’d suspect. I’m working fewer hours now than I used to work last year. The trick of it all is that I’m working the right hours, and I’m managing my time and demands on my time much better.

This question keeps coming up. I jumped on a similar discussion a couple of years ago, when I posted Is Startup Life Life, which followed a public debate about work/life balance triggered by this zinger from Jason Calcanis in his How to Save Money Running a Startup:

Fire people who are not workaholics. Come on folks, this is startup life, it’s not a game. Don’t work at a startup if you’re not into it. Go work at the post office or Starbucks if you want balance in your life.

Me? I’m not sure.  I hope for that happy medium, the gray area that isn’t either black or white; a startup that people believe in enough to work like mad, but one that gives them meaningful work to do, and one that hopes they manage to preserve a life as well. As if that were possible.

Angel Funding Waiting for the World to Change

Ever since I started in high tech in 1979, angel investment has been an amorphous, thoroughly disorganized, ad-hoc phenomenon that occurred somewhere between friends and family, on one end of a scale, and with venture capital, on the other. It was hard to find and hard to describe. People were selling lists of angel investors to entrepreneurs who were looking for investment.

I can’t say that the system worked; actually, I can’t even call it a system. Angel investment just happened. Securities law severely restricts the process of looking for investors, and, furthermore, also limits who is legally allowed to invest. An accredited investor has to meet minimum wealth requirements.

Last week I had a chance to talk at length with David Rose, founder of He  guest posted on this blog last Spring. Meanwhile, I’m getting more involved in my local angel investor group (Willamette Angel Conference), and using software more. And David told me he’s continuing to bring angel groups together, and organize. So I’m hopeful about that.

The long-term dream is a smoothly working market bringing startups together with investors who understand the risks, have money, and want to invest it.

There are at least these three problems to solve:

  1. Organizing the information into a market-like system. is making real progress. Startups get an orderly application process, angel investors and groups of investors get better deal flow, and there’s more information for both sides. Also continues to add to its database of founder reviews of investors. Not to mention how much more information about angel investors is now available easily through simple Web searchs.
  2. Legal restrictions. And here I’m not sure how long it will take, or even if a solution is necessarily a good thing. It’s not simple. Restrictions on soliciting investors and qualification hoops for investors were made law back during the Great Depression because people were getting swindled. The law regarding information is way behind technology. The assumption that wealth is equal to sophistication in startup investment is questionable.
  3. Processing investment opportunities. I’ve been meaning to post for three months now about Revolutionizing Angel Funding on The Emergent Fool. That post, by Kevin Dick, talks about setting up a system to process startup deals automatically, using an online screening process. I’ll be watching that one. I’m not convinced that the way angel investors process deals, one by one, case by case, is really a significant problem. But it’s an interesting idea.

Overall, I’m intrigued by how much organization has happened in the last year or two.

I do believe there’s an opportunity for healthy disruption in this marketplace. It may be something like what is doing for microlending, or what was doing for peer-to-peer lending before (gulp) it got a cease and desist order from the Securities and Exchange Commision (SEC). On one side, a lot of people who know what they’re doing would like to invest in some selected startups. On the other hand, a lot of startups would like to work with investors.

The toughest part of all this is securities law. A lot of what might really make a huge difference in organization of angel investment is on the brink of breaking laws governing fishing for investors. I’m waiting, cautiously optimistic, to see how this develops. And how long it takes.

New Entrepreneurial Seal of Approval

Adeo Ressi doesn’t like what he calls a slanted field on the deals entrepreneurs get from investors. He says (I’m quoting):

Honestly, I think that the entrepreneur gets a raw deal today, and that this has gotten a lot worse since I started in 1994. Entrepreneurs are victims of a lot of predatory and exploitative behavior.

This has been bad for a while, but it’s gotten much worse. And it hurts the country, and the economy. We need to fix the availability of capital for entrepreneurs.

That led to The Funded Founder Institute, a four-month, $450 program to run selected entrepreneurs (including, by the way, wanna-be entrepreneurs) through weekly sessions with mentors and experts, ending with a certification that should smooth the path to investment. Microsoft BizSpark scholarships are available too, to pay the $450.

Adeo is serious about smoothing the path for founders. He says:

If we could eliminate all the headaches that the modern bureaucratic layering adds to start a company, and allow these founders to focus on the core business challenge, the likelihood of success increases dramatically. We want them learning how to do it right.

A brief interruption before I go on: this looks like a really good program to me, even though it’s brand new, and not certified formally by anybody else. Adeo has a good reputation, knows a lot of the right people, and he’s done some important things before. I think the certification he’s offering is likely to be very valuable. So if you’re interested apply now. Applications close for the first session, which starts this month, May 9. The application costs $50.

Look at some of the mentors already on board. Several are major Web names, founders or CEOs of Scribd, Mahalo, Socialtext, and so on. And Adeo told me has many more, including other mentors as well known as some of these, in the wings.

Adeo himself gives this program a lot of credibility. He’s the founder and main force behind, a site I’ve posted about before, entrepreneurs reviewing investors. He got his skeptical view of investors the hard way, building companies. Game Trusts, one of his more recent efforts, won $15 million in venture capital and exited with acquisition by Real Networks.

He’s serious about leveling the playing field. The institute has posted sample startup documents including suggested deal terms more favorable to entrepreneurs than most. And the institute is offering to arbitrate disputes.

It’s also taking a piece of the action, which it’s hoping to reinvest in the long-term health of the program. Adeo says there will be warrants, linked to equity, as a “vehicle of valuable attribution.” That’s for “value as a sign to the mentors and the founders. And 60% of the warrant value goes right back to the participants. The remaining 40% is held by the institute as a value play.”

TheFunded Founder Talks

I remain very impressed with It continues to develop as a repository of reviews and war stories related to the high end of venture capital. You can join for free, and browse through opinions about VC lenders, plus some articles, and generally useful content. I’ve posted on it several times on this blog previously, and today I received an email from with this interview with founder Adeo Ressi.

What’s a Visionary Sheep VC?

What’s a visionary sheep? Is that a good thing (visionary) or a bad one (sheep)? The person using the phrase at followed that phrase with “Only one of them has the guts and the vision to try something new and then the rest follow.” sheep

That’s part of a “heated debate” at the venture capital review site, where my post Is There a Catch 22 of VC Funding? highlighted an interesting and very well written open letter to the VC community. That was on my new Up and Running blog at (companion and complement to this blog, by the way, not a replacement). The debate is front page news at today.

It started with an open letter from Mike Glanz of, who complained that he was stuck in a very slow (“stuck in pudding”) process of raising money for a pretty interesting concept that has already launched and been able to generate traffic and sales growth in its first few months. Sales doubled from month two to month three. He says VCs aren’t interested in his venture but are interested in one he posits as a straw man, which has a team member who was an executive at Realmedia. He’s frustrated.

The “VCs are visionary sheep” is only one of several threads coming out of that open letter and the comments that followed. Aside from that, several people point out that the VCs are running a business and the experienced team is a major factor, explaining why Mike got less interest than the other comparison venture. Some suggested getting one star with experience on the team, some suggested aiming more strategically at lesser funding to prove the concept, and several thought hireahelper might be able to fund itself by bootstrapping, without needing venture capital.

I don’t buy the whole “sheep” complaint because VCs are supposed to invest in a way that minimizes risk. Favoring experienced management teams, and almost always investing in groups, is good business for them. The management team track record is a critical factor in risk. And investing in groups helps investors assure their funds that the startup management will share basic financial goals for investors.

Still, Mike Glanz may ironically succeed in finding startup financing while proving himself wrong with his complaint, because his letter is very well written and has clearly struck some nerves. I’ve never met him, and I know nothing about his business, but he did get some attention where it matters. I’ll be following up here with updates when I get them.


Revisiting the Database of Investors

I had a call to a venture capitalist pending so I just visited again, and, well, wow! Why didn’t they have things like this when I was immersed in seeking investment, back in the 1980s? Since I was last there just four weeks ago they’ve improved the interface — it wasn’t bad before, but still much better now — and visiting is a reminder of why I recommended it in the first place. is a database of comments and reviews on venture capitalists. I used it this morning to check out a New York fund that’s been cold-calling me about my company. I get a lot of calls that seem to be asking to invest, but usually end up being pitches for consulting services. I don’t ask for such calls and since they take time to return, if I didn’t initiate, I usually ignore. Today however I was curious about the call in my voicemail so I checked with

Here’s what I found, with the names omitted for obvious reasons. There’s a pretty good visual rating on that company, which also shows me clearly that the rating is based on three reviews. Here’s a screen shot of that:


There’s also a series of comments, which are just as useful as the ratings. for example:




Why this matters so much — I’m afraid this is my third post that mentions that site in six weeks — is that choosing investors should be like choosing a spouse. I’ve been saying that to entrepreneurs for years, but it usually led to the obvious follow-up questions asking how they can really find out what the investors are like. Which, in the past, wasn’t easy.

Of course a good review system can be manipulated. It’s very anonymous, which is both good and bad, because it promotes honesty with negative reviews but also allows, I assume (although I really don’t know the details), for false positives. Still, it is way better than anything else I’ve seen. I accidentally checked a “disagree” box when I was making the snagit screen shot for this post, and I still haven’t found an email address I could use to send them a quick note to correct it.

There’s also a very engaging letters section, in which entrepreneurs can comment to investors in general. Here’s an example of one of those that I liked:


To gain access to the details, I had to register, and wait to be approved. That took a day but was no problem, and was well worth the trouble.

I’ve also discovered a really nice “letters to

In the early years of Business Plan Pro we used to bundle a database of venture capital contacts. Back then, early 1990s, it was useful. These days there is so much information readily available that the old database bundle would be superfluous.

— Tim

Choose Investors Carefully or Not at All

Choose your investors as carefully as you would choose a spouse. It should be obvious, but we focus on getting financed, as if money were the only object. Investors are partners. As with marriage, in which the wrong partners can ruin your life,  so too with investors. The wrong partner can ruin your business. That can also ruin your life.

It should be obvious but it isn’t. Entrepreneurs long for financing. I had a friend who spent years trying to “get financed” and did nothing but shop his deal in the meantime. That’s deadly. He was like the empty-eyed unshowered two-bit gambler in Las Vegas, living poorly off hope for a big win.  Don’t let the lure of “getting financed” cloud your vision. You’re much better off with no deal than the wrong deal.

I’ve been playing phone tag with Dave Chen of OVP Venture Partners because I want to credit him for the first time I heard somebody suggest entrepreneurs should choose a venture capitalist as carefully as anybody should choose a spouse. I heard him give a talk about that subject at the University of Oregon New Venture Competition.

The wrong partners will push you in the wrong direction, want the wrong thing. Dave pointed out the problem very well. With investors, you don’t just get their money, you get them also in business with you. You’re going to wake up with them every morning, and go to sleep with them every night (metaphorically, but still … ).

The right investors will be good partners. They know your field. They have contacts who can help. They have antennae pointed in the right direction. They have relevant experience.

How can you tell? Keep your eyes, ears, and mind open. You’re not going to get very far down the road without meeting them, spending time with them, talking about issues. Don’t go blindly unconcerned about compatibility. Have the courage to say no to partners who don’t fit. Imagine them as everyday companions. Will they help you? How? Will you want to get them on the phone? Will you look forward to meetings.

Thanks to A VC for pointing me to The Funded, a website collecting reviews and opinions from entrepreneurs about the venture capital firms that funded them.  This is a spectacularly important site to someone looking seriously at taking venture capital money.


New Site Rates Investors

Thanks to A VC for tipping me off to The Funded, where entrepreneurs rate investors. This site is a good reminder that few entrepreneurs realize they should choose investors as carefully as investors choose them.