How do you value an early stage startup?

“And we might. We've got some time. It's been my experience that the culture of a company is set really early. Like what's the bar of excellence for engineering, design, product and whatnot? That bar is set really early. And also like how people treat each other and everything, that's all set really early and determines who you can hire subsequently. And the first product you usually build at a company is a product you're still selling in 10 years. You might have built other products and add-ons and whatnot, But that first product is really the product that exists forever. And the positioning of the company initially really determines whether it, you know, succeeds or fails. As in, you either have good competitive positioning at the start or you don't. As in, you're either entering a super crowded market or you're entering a market that's sort of on the come and you're entering way before everyone else and you give yourself enough of a head start to truly, have a chance of succeeding. And all of those things are determined really early. And so I think like the fundamental decisions you make with a founder early on about where to go, what to build, who to hire are really, really important. They're decisions that have an outsized effect down the line. So that's why I've always liked being first and why I continue like being first if I can. And there's a nuance here. There's like first, first, first check or first institutional investor that like really sits on your board and makes stuff happen. There's investing enough money to let someone leave their job and go full-time on something or investing enough money so that someone can really, you know, incorporate the company, hire their first person and launch their first product. I think they're both important. You could say that both are first checks because they put someone into business, but either way, and I've done both, Either way, I like, I like doing both of those things and not later. Like, I don't like being the angel check that's coming in at the same time as a VC fund, because by then you're just marginal money. Um, and I don't like being a VC fund that's coming in, you know, at the Series B or C, because again, by then you're just, you're marginal money.”

“Yeah, I think that's where my question came from in terms of asking you how much time you spend on hiring. I think founders at the early stage, it's so important, as you said, You said people, people, people's number one. And I think this ties it all back to your question earlier on like what is differentiating the best AI companies is having, you know, top talent at every single stage or every single person firm. So increasingly I see founders spending a lot more of their time on recruiting, even though it's painful. I know you want to focus on your product, you want to be selling instead, but it's so important to be involved at, you know, some level in those interview conversations. Conversations. And on the talent front, I think it's making it attractive for the top people and really understanding, you know, for different roles what they're looking for. Sometimes it's really they're trying to make sure that they align your vision. Like, that's one thing. Part— you can't avoid it, but some of it is how much you can pay them. Or really, it's in the ESOP. I think you need to make them believe in the ESOP story. They think, I joined this company, I work so hard, and I love this company, and I'm also going I'm going to benefit and hopefully 5x, 10x my ESOP. And I think that's a huge thing to, you know, to be building on. And to your point, so much of it is empowering your people on an ongoing basis and just also ripping the band-aid off early if it's not a good fit. I think that's where a lot of companies fall down is like they don't have the right probationary periods or they let things go on, you know, under the hood for too long where people don't feel comfortable reporting to the founders that there's actually something wrong that's happening in this specific division. And it's often, it might be because someone at the C-suite or VP level is actually the problem in that company, but the people below don't feel comfortable bringing that up. So just making sure there's that space where everyone in the company feels comfortable bringing something to you if it's actually really important and vital and being that space for them. And in terms of pre-seed decks, It's really hard right now in terms of, as I said, technology is moving so quickly, people getting to 1 mil”

“Like you de-risk that too much for me to get a good return. So no. Right. I think that, but that is the not obvious point, right? 'Cause if you are, especially in the Australian ecosystem, right? If you are out there operating, especially like early stage being, you know, everything really prior to product market fit, right? Prior to your Series A. Like so many people will tell you that's early, that's scary. That's, you know, that is early stage. But if you're talking to you and I, well, maybe me, you'll do seed and Series A, but like I won't. And, well, there's a lot of angels that won't do that. Right? They'll be like, sorry, it's too far along. Or it's not a good fit for me or something like that. And essentially what that means is they are assuming that your valuation is too high.”