Posts Tagged ‘confidence’

#8 answer questions

November 4, 2009


What is the real goal of a meeting with VCs?

to get another.

not just so that VCs can waste your time.

your time is valuable.

but get another meeting that will start a process.

hopefully ending in a term sheet.

here are a few great ways to get there:

  • create a dialogue. connect
  • do not act as a presenter. be yourself. discuss issues. focus on ‘the customer’, not the presentation
  • get questions answered. first quickly, then slowly

i wish to be clear here. i mean two different things by saying ‘answer questions’:

  1. before the presentation, (especially if you sent material in advance, and you have had a discussion with the associate), try to find out what are the top 3 issues that if you are able to answer, the process will start or continue. if you do not know these in advance, you probably have not used the important services of an associate at the VC fund (or have not done your homework) . if you still do not know, ask them in the beginning of the meeting
  2. during the meeting, when asked a question, do not evade, do not push back, do not delay. every question has a short answer. if it is interesting enough, there will be time for a longer answer or a discussion; either immediately, in the next few slides, or in future meetings.

in fact, you do not have to answer the question completely. the best answers are ones in which the entrepreneur says ‘i do not know’ or ‘i would like to do some more thinking on that and get back to you’. in fact, if you do not answer a question completely and you take time to reflect, this process can be used to your advantage. it can be a reason to continue the dialogue.

often, i find presenting entrepreneurs not answering questions, and afraid of starting a discussion. perhaps because of time pressures. perhaps because i focus on the wrong issue.

i also present. to investors, to my partners, to different classes in universities and in conferences

i have learned that

  • it is hard to answer a question with a short answer
  • saying ‘i do not know’ has a lot of power

#2 no NDA

September 23, 2009

Here are reasons why VCs should sign NDAs:
(NDA – Non Disclosure Agreement)
  • it is common business practice
  • all an entrepreneur, especially in early stages has, is her idea. it needs to be protected
  • VCs can share data with competition – sometimes their own start-ups, or corporate development of big players in the space, ultimately hurting the entrepreneur
you can try to get a VC to sign an NDA. but VCs do not sign NDAs
so i am not sure it is a good start to a relationship.
( i have signed about 5 NDAs to date – and in general, it was a worthless procedure. lawyers made money. in one case the entrepreneurs who asked for an NDA actually stole the idea from another entrepreneur)
sheket confidential
professional VCs treat your idea with confidentiality. not all of the time, not everyone. but extremely often. and when discuss your idea with others, it is with the intent of analyzing the opportunity and in a manner that will not disclose your secret sauce.
but my point has two other flavors to it:
  • what counts is not just your idea, but your ability to execute upon it!
  • what can really be protected by NDA, is usually not interesting for a first meeting, and ultimately, not the reason why a VC will invest in you.
in the software space, you ability to connect with people, communicate your idea, hear their feedback and embed it into your product counts more, much more, than your original idea.

zalman meets zelda

July 30, 2009

haim shapira is one of the best public speakers in Israel.

really TED quality

he is talented in many areas and his books are highly recommended.

in one of his talks in introduction to game theory, he discusses selection of a partner under the following scenario:

a group of men has to choose a partner from a group of women. the number of man and women is the same. so no worries, everyone will find a partner.

in each turn, every men sends a note to a single women.

if a women gets one note, they are a couple. both go upstairs (there is a party one the roof).

if a women gets more then one note, she gets to choose a man from those that sent her the note. the men that do not get chosen by the women stay on for the next round.

now, who would you send a note to?

let’s say the men and women are sitting in alphabetical order.

the first women is A

more specifically, Anglina Jolie.

would you send her a note?

well, yes! how often would you get a chance to party with Angelina as you partner?

but wait. this is where game theory starts. game theory is actually interactive decision making. it really depends what other men are going to do. you do not want to be one of several who have sent angelina a note, not chosen by her, and lose a chance on another, perhaps less attractive women – yet attractive, who will be taken by another note (man).

what you definitely do not want happening, is to get the least attractive mate. Zelda.

so now you strategy depends on:

– do you hope for the best, Angelina,


– avoiding the worst, Zelda.

this will really effect your decision making, as well as the strategies other players have chosen.

interestingly, depending on who the men you are playing with, there is a greater than zero chance that Angelina will not get a single note and remain un-partnered for the next round. what a waste!

so much for the paradigm in game theory.

many of us are willing to let go of Angelina, but do not want to end up with Zelda.

just the two of us, Zalman and Zelda, waiting till the final round while everyone is having a party upstairs.

plus the uncomfortable realization that we are the least desired and last option.

have you ever gotten that feeling?  it may be a last minute deal on a vacation package?  a great deal on a used car?

now, some of us do not like spending time with that uncomfortable feeling, called cognitive dissonance.

for others, life is a maze-way of cognitive dissonance

us humans have an internal mechanism, a powerful one, that will take us away from that uneasy cognitive dissonance.  denial! it is a feature, not a bug.

to make a short story longer, i am doing a deal – making an investment. after looking for a potential partner for a long time, and getting many ‘No’s, i finally have a partner and a deal in the works

feels like zalman meets zelda

now i need to figure out which one is me, zalman or zelda.

time-out from politics for one bill?

November 11, 2008


reminds him of 87, 98

wide spread crises, credit markets are broken

UK policy read and response was much better. US slow and discrete = per event and not a systematic strategy. article in wsj yesterday re bernanki, polson and their disputes = lack of confidence.

with goldman, TARP/polson, proposal was outrageous. CDOs are complicated to price. in his mind, gov’t equity infusions were right. at the right point in the cap structures.

lack of global cooperation, incredibly disappointing. lack of standard mechanism creates unfair advantages. in a time of need of confidence, moves created the opposite. in terms of TARP and coordination

next position?

interesting and difficult times.

firing mangers is essential. returns july/july 07: 28%, 08: 4-5%, double digit negative. liquidity! tough to generate.

everyone has better opportunities in front of them today, than 6 or 18 months ago. compelling opportunities in credit markets. ones without duration.

altria (philllip morris) t.+6%,  and protection on debt is 1%. should be same. some debt is at 20% 3-4 years of maturity. banks is 60%.

how improbable is the economic armagaddon. nice fiscal stimulus. chinese, obama

looking for stability, or gov’t guarantee to move out of Tbills into market money funds. would like to see unlimited liabilities guarantee. govt needs to stimulate private and move out.

insurance mechanism rather than direct. charge for participation, penalty box for defaulting as a money manager.

banking lobby is strong. banks hate money market funds. that did makeit to the TARP bill. so banks will not let this happen. then, bill was filled with garbage. time-out from politics for one bill

the tension between ‘one person, one vote’ and ‘one dollar, one vote’

October 22, 2008

talk about corruption, consequences and reform.

parking violations by UN diplomats: UN diplomats in NYC do not pay parking tickets (until 2002) since a 90% drop. still, diplomats from Scandinavian countries have close to zero fines, other countries with high corruption have many tickets.

key takeaways:

Scandinavian countries have a lot of things that work. inequality, social services, cities with bikes.

the tension between power and money will exist forever. what is legitimate is relative. lobbyists, create almost all the problems of corruption, but just under a legal pretext. think of the tobacco lobby or the farmer’s lobby. the movie borat comes to mind regarding how relative values are.

corruption is the tension between power and money and actually tries to replace one person, one vote with one dollar, one vote

‘bribe is a way of getting personal’ creating a personal relationship.

singapore changed in a big way, buy paying public officials market rates. enforcement is crucial

transparency – aggregating costs and telling the public in a quantified way how much it costs may help.

size of government and likeliness of corruption? no clear evidence. some of the bigger governments (Scandinavia)  are not corrupt but there is a cause and effect, the state functions well, is big, and is not corrupt

key terms:

corruption: misuse of public power for private gain. could be included in private companies for self gain

CPI: corruption perception index. high number (1-10) means good = low corruption. poorer countries tend to be more corrupt.

incentives for bribery:

  • government gives access to scarce resources. e.g. license to run a casino. seek monopoly rent to be shared. only one electric company to be privatized. anything with a cap on it – admissions to universities, or anything requires a license.
  • better quality service. pay to get ahead of the queue
  • obtain a benefit to all qualified

is there a problem? inefficient, poor pricing mechanism, vicious cycle to create red tape. so better to privatize it or price it officially. consequence include lower state legitimacy, higher cost of doing business.

result: underinvestment in education and growth, over investment in infrastructure

Scandinavian countries are leaders. 2002 -2007 israel dropped from #20 to # 30 in the world. still a very good place.

strength of mafia has influence with positive corrlation

post conflict is great – destruction , need to build, lots of money coming in quickly with weak domestic institutions. iraq add natural resources. how you integrate former fighters is crucial.

shift in public attitude towards corruption?

  • could think of shift in opportunities. usually economic, occurs often
  • change in values. good people can not be suckers. slow but does happen once in a while. e.g. good government movement in the US in 19th century lead by jefferson

ex president Clinton

October 5, 2008

ex presdient clintion was here for the 35th alumni reunion.

he came here at age 23 and within 20 years became presidnet.

he claims helping runing a campaign thought him a lot. could be a fun experience.

some thoughts:

turn good intentions into positive changes

what people want from you:

  • you care about them
  • you respect them
  • you want their children to live

advice to a young man:

be happy, life is short:

happy has two aspects: help others, and try to do what you like and you are good at.

so there is a catch, good and happy go together.

evidence argument policy and law are 4 essential pillars of government. need to understand this better

great arguments are circular

while listening to him, absorbing his charisma and poise, intelligence and analytic abilities, i could not help but think how he got involved with Monica Lewinsky

even great people are human, not perfect.

what was it about her? what point in his soul was she able to touch?

trusting your gut

October 1, 2008

even-though Blink was popular, it cherry-picked

key takeaways:

do not always trust your gut, although it is a great feeling to do so

trust someone else’s gut?

whatever you will look for, you will find it. make sure you look for evidence.

find out what you want to be true, and test the opposite

moral dumbfounding. evidence (haidt) : our gut makes ethical or moral decisions, then we justify it


do trust it when:

  • your gut has subconscious access to information
  • your gut has been there before and got clear feedback
  • your decision is close or trivial, but

check, is it really close?

bayes helps here because we tend to think things are close when they really are not

  • no time for anything else
  • when it is about how you feel, but

moods are a big factor in recall and affect decisions. so beware

and check your gut during different modes

Bayes rule:

how you should change your existing beliefs in the light of new evidence?

Mathematically, Bayes’ rule states

                 likelihood * prior
posterior = ------------------------------
          marginal likelihood or normalizing factor


wilson uva article suggests that choosing a poster based on gut, vs based on logic, some time later satisfaction is higher if you choose because of gut

carter racing case (dispute resolution research center)

you are a racing team, an engineer feels something is wrong, has to do with temperature.

do you trust his gut?

moral dumbfounding

we have an ethical knee jerk

case of safe sex amongst brother and sister

people decide it is wrong, but logically can not support it

moral nihilism

the 4 questions of ethics and suggest moral relativism. wiki

  1. non-cognitivism. there are, in fact, no moral facts (van Roojen, 2004). But if moral statements cannot be true, and if one cannot know something that is not true, non-cognitivism implies that moral knowledge is impossible (Garner 1967, 219-220).
  2. what is the test for right or wrong
  3. even if there are right and wrong, why should i care (social norms)
  4. what are the right and wrong things

business ethics

it is hard to take personal ethics into business

tool: test your intuition with unnatural thought ‘violinist case’

you go to a concert. you wake up in a hospital. you have been operated. you find out your are the support system of the violinist. do you want to disconnect? if you do he dies. do you have to stay in the hospital to keep him alive? this is exactly an abortion case after rape. but people come up with different answers.