During her time as a media executive, Hauser built a rich network of founders and VCs alike. She also discovered a pain point. There were so many women ready to launch new businesses, but very few women investors to not only fund those companies, but also to mentor and advise. With two young children, Hauser was looking for more flexibility in her career and began investing on the side. Realizing how much she loved it, it soon became a full-time pursuit.

“I want to see that a founder is adaptable, that they're open to different ideas, and that they have a curiosity mindset.” - @fran_hauser
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In the eight years since she began investing, Hauser has built a portfolio of 30 companies, 28 of which are led by female founders. For female founders struggling to land that first check, she emphasizes the importance of network building. While it is critical to have a great pitch deck, she explains that it’s getting the pitch in front of the right people that counts. This means developing an inner circle, and tapping them for who they know. Perhaps you don’t have direct relationships with VCs, but can you build an advisory board of people who can create those intros?  

There are a few common mistakes which Hauser sees founders are making. One is that they sometimes get too stuck in their vision for the product, and don’t process feedback well. “I want to see that a founder is adaptable, that they’re open to different ideas, and that they have a curiosity mindset.” It’s important that founders engage in active listening with investors. Being open to new ideas and capable of adapting is critical. “When you’re starting a new business, a big part of it is being able to adapt, and being able to adjust because stuff happens.”

“When you're starting a new business, a big part of it is being able to adapt, and being able to adjust because stuff happens.” - @fran_hauser
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Another mistake is focusing too much on the product and not talking enough about the other aspects. “At the end of the day, you’re investing in the founder, because the product might change. It’s really about whether this person has what it takes to launch a successful business . . . being really clear and confident about why you’re the right person to be tackling this opportunity is really important.” Too often, Hauser sees a dynamic founder present an entire pitch deck, and not really begin to introduce themselves until the final slide. Additionally, Hauser likes to see context to go along with the product. What is the pain point the product solves or what market trend is it responding to? Painting a broader picture around your company’s purpose can go a long way.

“At the end of the day, you're investing in the founder, because the product might change. It's really about whether this person has what it takes to launch a successful business.” - @fran_hauser
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What Hauser does like to see in a potential investment is market opportunity. Being able to clearly articulate the consumer value proposition is so important, as is knowing one’s own weaknesses. No founder is perfect at everything, so how do they fill in the gaps when it comes to their own shortcomings. If they are the visionary, is there someone on the team that is great with day-to-day operations? Another thing Hauser loves to see in future investments is traction. Knowing there is already a lead investor who has done their due diligence goes a long way in convincing her. But traction comes in many different forms. For a company that has not launched, 10 clients that have given verbal agreements is a big mitigation of risk, as is a few hundred people who have filled out surveys for a direct-to-consumer product.

Nathan Beckord, member of our January ’13 Cohort, is the founder of Foundersuite.com, a collection of software tools and templates that help startup CEOs execute more efficiently and effectively.  Nathan raised seed funding in part from investors he met through Founders Network.

In this video, Nathan covers how to: i) build an investor funnel; ii) run a process; iii) build momentum and iv) efficiently close your round.

About Founders Network ®

Founders Helping Founders ® Founded in 2011, Founders Network (www.foundersnetwork.com) offers lifelong peer mentorship to over 600 tech startup founders globally. Our community includes thought leaders from the high technology startup industry including founders, angel investors, venture capitalists and corporate executives. To interview our staff or members about company news, industry trends or events, please email: press@foundersnetwork.com

Request an Invite

Become a better founder through peer mentorship from 600+ tech founders. Learn about our membership criteria and request an invite to join.

At Founders Network, we’ve seen a tremendous amount of growth in our community that now numbers over 500+ full-time tech founders. Our core values focus on a spirit of peer mentorship  and shared sense of creation that cultivates a truly tight-knit, and supportive environment unlike any other. We are always working to foster new ways to make Founders Network the best community that it can be for our members.

Thanks to all of your great feedback on the ways in which we can continue to improve the “signal-to-noise ratio” of founder meeting requests, we are extremely excited to officially launch the [fn] Investor Program. The [fn] Investor Program builds on our VC and Angel mentoring program with the addition of a valuable new tool for our members that uses our matching algorithm to ensure that the right founders are paired with the right investors, based on sector, stage, location, and other factors.

We’re very proud that many of our founders have successfully raised funding as a direct result of our investor mentoring sessions, with relationships at firms such as August Capital, CRV, Intel Capital, Lightspeed Venture Partners, and more. Last year alone, Founders Network members raised over $100 million in funding for startups including IFTTT, Docker, Distil Networks, Pley, Brightbytes and many others.

We believe that the [fn] Investor Program will make the fundraising process a little less painful and a lot more efficient for both investors and founders.  If you are an accredited or institutional investor and would like to learn how to support our founders with mentorship, please let us know. Even with Founders Network members spanning the globe —  from San Francisco, New York City, Los Angeles, and throughout Europe and Asia — the startup world is a smaller place than it seems. What makes Founders Network truly special is the quality not just of ideas and products; but of the people — the people we meet and learn from are a large part of all of our successes and failures.

If you have any questions or input about the new [fn] Investor Program, we’d love to hear from you. Contact me at: kevin(at)foundersnetwork.com

Topic Description: Investing (all stages, sectors); specific focus on software and cloud.

Marlon Nichols, Venture Capital Investor at Intel Capital

 Name: Marlon Nichols

Background: Marlon started his career in the software industry where he successfully led the deployment of many global enterprise software and business process improvement initiatives for Fortune 100 enterprises. During his time as a technologist, Marlon played a key role in the European expansion of a Cambridge based software company. Upon returning to the United States, Marlon worked as a principal strategist and senior manager for a strategy consulting firm focusing on new business development. While working fulltime as a consultant Marlon pursued what started out as a passion project and later evolved into an education focused nonprofit company called Rise to College. Under Marlon’s leadership Rise to College continues to grow while positively impacting the lives of over 200 hundred inner city high school students each year. Marlon studied Entrepreneurship and Private Equity at Johnson where he was a Roy H. Park Leadership Fellow and served as President/Chief Operating Officer of the BR Venture Fund, Johnson’s $1.2M evergreen Venture Capital Fund. After completing his MBA degree at Cornell Marlon joined Intel Capital as an Associate Director. Marlon actively works to identify, invest in, partner with, and advise early stage high growth companies that operate in the digital media and consumer internet sectors.

Marlon holds a Bachelor of Science degree from Northeastern University and a MBA from Cornell University. Marlon serves as an adviser to the BR Venture Fund and a number of start-up companies. Marlon is also the Co-Chairman of Rise to College.

fnMentoring is on Wednesday, January 15th beginning at 10:30 am.RSVP to participate in this event.

If you are a tech startup founder and want to learn more about the benefits of Founders Network please click here.

Brendon Kim, Venture Capital Investor at Samsung Innovations

Topic Desciption: Investing in early stage software and services companies. 

Name: Brendon Kim

Background: Brendon Kim graduated from Princeton University in 1989 with an AB in Public Policy.  He later went on to graduate from Stanford University Graduate School of Business with a MBA in 1994.  He is fluent in English and Korean.

He has been an Associate at Coopers & Lybrand SMS and CSC.  He has worked at Altos Ventures for many years as a General Partner and Special Partner.  He is currently working as a Venture Capital Investor at Open Innovations which is part of Samsung Electronics. It is an investing new fund focused on early stage software and services companies that can expand and build the Samsung Electronics ecosystem.

Company: Open Innovation is a Samsung initiative to identify and grow the technologies and infrastructure of the future. To put the principles of Open Innovation into operation, Samsung adopts a multi-pronged approach that involves participation in global consortia, forging links between the industry and top universities, cooperation with vendors, and operation of successful overseas research centers. Samsung is committed to producing best-in-class research in the materials and technologies of tomorrow. To foster a culture of ongoing, results-oriented innovation, the organization provides attractive remuneration for research activities.

Many of Samsung’s current products were created by incorporating technologies from venture companies. If you have products or technologies that are the best in your field – be it healthcare or robotics, or however far-fetched it may seem from typical consumer electronics products, we would very much like to meet you and discuss the potential. Samsung has a broad range of businesses that your technology and products can leverage. While the Open Innovation Center focuses on creating new business, we also work closely with Samsung Product divisions and Samsung Venture Investment Corporation, to whom we refer venture companies that have more relevance to incremental product innovation.

fnMentoring is on Wednesday, April 17th beginning at 10:30 am. RSVP to participate in this event. 

If you are a tech startup founder and want to learn more about the benefits of Founders Network please click here.

“Hey, you! If you are an accredited investor, show you love a member of 500 startups by investing a small amount. Trust me, even $5 or $10k can make a huge difference, and you should do it.”

After reading what Dave has said in person many, many times, I smiled and went back to watching Glee. (Ricky Martin was on! That man has amazing teeth.)

Over the next several hours, there was quite a debate about if it was right to expect startup mentors to invest in the member companies of the accelerators in which they are mentoring.

I remember a conversation I had with David Cohen of Techstars. He asked me, as a mentor, what did I expect in return. I said a nice meal where I learned more about how the program was doing, and what the incoming class looked like. Quizzically, he asked if I expected equity compensation in the companies in which I mentored.

“Expect? No. If the founder believes I have value to provide past Techstars, then I am happy to discuss it with them.” I replied.

There is a fine line in the world of accelerators, and part of the problem lies in how people define the roles of folks circling about, and part of the problem lies in the motivations of those same folks.

Defining the roles in a startup

Startup: a company that is a member of the current class of an accelerator. Specifically, they have given up some amount of equity in return for some amount of cash and access to the program and network provided by the accelerator.

Mentor: a person who provides time, expertise, and connections to a Company and is pre-selected and filtered by the accelerator. Generally, there is no remuneration by the accelerator for providing these services to its Member Companies.

Startup Advisor: a person who provides, time, expertise, and connections to a startup (who may or may not be a Company) and is NOT pre-selected and filtered by the accelerator. Usually, there is a form of payment in terms of equity or cash. They can range in a wide variety of expertise, from advisor to startup equity to operations, marketing, or business planning.

Investor: a person or institution that provides cash in return for equity in a startup.

How should these roles progress over time?

Commonly, the progression of roles is that someone is a Mentor to a company, then becomes an Advisor or Investor, but that is not required or (usually) expected.

An Investor can (sometimes) serve as an Advisor, but usually, once money enters the mix, they have very different goals than a Mentor and/or Advisor who is not an Investor.

Sigh.

A small business that enters accelerators does it for two reasons: raising money and building a network. Yes, there are immediate benefits to the insane amount of time spent working accelerating your business; and the mentorship is great in terms of getting feedback and direction (although “mentor whiplash” is real, and I have seen many founders get crushed by it).

Early-stage startups find mentors, often based on the ability of that mentor to help the startup achieve its goal of raising money or building a network. Therefore, it’s often easiest if the mentor invests money (creating a positive signal given their closeness to the project), and convinces their network to also invest. (The “hot” startups often don’t need mentors to invest, and often, unfortunately, are dicks about creating space in their rounds or bringing mentors on as advisors because they are drunk with attention).

Should startup mentors invest?

I strongly believe that if people become mentors because they are interested in increasing deal flow and perhaps “getting in early” on a promising Company, then those people are dicks. On top of that, they should not be part of the accelerator ecosystem as Mentors (but as Advisors or Investors, sure…)

If an accelerator is too heavy-handed with its expectation that mentors become investors, then, frankly, that accelerator is scummy.

(To be fair, this was not what Dave was doing. He was being very passionate about two things he is fanatical about: the companies he invests in, and the importance of angel investing to a startup ecosystem.)

Every time I get asked to be a mentor for a program, they ask if I expect something, like advisor compensation or shares. I always say the same thing: “I expect the companies that take full advantage of the program to achieve their goals more readily than those that come in with messed up expectations. I’m happy if the companies I work with crush it. And if all I get out of that is a “Thank You” email, I’m cool with that.”

I’m also very particular about the startups and founders I get passionate about, because I want them to succeed and will do whatever I can to help that happen. This is not unique to me, in fact, most of the mentors that I meet that completely blow me away have similar goals in mind.

As a mentor, should I invest in the companies I mentor?

Yes. I should.

[Side note: One shouldn’t/can’t invest in a venture-backed company — one that issues shares — unless you are “accredited,” or in rare cases “sophisticated.” Accredited means you have a net worth over $1M and sophisticated is that you don’t have a net worth of more than $1M, but you understand all the risks. If you are a company that is accepting investments from unaccredited, non-sophisticated investors, you are creating a potentially huge problem later down the line in due diligence for a merger, acquisition, or IPO.]

It is that simple. Folks that want to become startup mentors do it because they want to see the companies succeed, and one way to help the company succeed is by investing in them.

What if that amount is nominal? $5k, $10k USD?

It’s still meaningful in both signaling other investors that the early-stage company is worthy of larger investment, and shows the founder that you weren’t just spending time out of obligation, but out of excitement and support.

What about the role of investors?

Here is where it gets tricky…investors should not mentor. Mentors should invest. When being a startup mentor, the values and goals of the mentor mentality should supersede the goals and desires of the investor.

Take off your investor hat when determining which companies to work with, and equally important, small business, take off your “I need investment” hat when selecting mentors.

One of the things I like about 500 startups being a fund and accelerator with a blurry line between the two is that all the early-stage startups that are in the accelerator start on equal footing. Some of the other accelerators that have a fund associated (loosely or otherwise) create a different dynamic because of it. I also like that the “Sith Lord” of 500 startups is so passionate about getting all of his companies funding.

What I don’t like is that the basic premise of the accelerator and the mentor/advisor/investor has gotten so screwed up that in the end, the companies are hurt by their inexperience with dealing with each type.

The takeaways

It is imperative for the accelerator to educate their companies on the roles and expectations of mentors, startup advisors, and investors. For mentors to mentor, good advisors to advise, and investors to invest. The clearer the role definitions, the more value the company gets from the accelerator, and the startup ecosystem is continually improved.

This entry is a repost from Micah Baldwin’s personal blog.