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Several weeks ago I was talking with a friend about mentoring other entrepreneurs. He shared with me that he’s been mentoring an entrepreneur for a little over a year now and follows a strategy where they meet monthly and go through a simple worksheet. The style of the worksheet comes from the monthly update section that’s popular in YPO and EO forums and highlight the highs and lows of the last 30 days and next 30 days across business, family, and personal spectrums.

Here are the contents of the worksheet:

• Ratings
  0-10 with 10 being the best, how are each of the following:
  Business
  Family
  Personal
  Overall
• Business
  Best about last 30 days
  Worst about last 30 days
  Most looking forward to in the next 30 days
  Least looking forward to in the next 30 days
• Family
  Best about last 30 days
  Worst about last 30 days
  Most looking forward to in the next 30 days
  Least looking forward to in the next 30 days
• Personal
  Best about last 30 days
  Worst about last 30 days
  Most looking forward to in the next 30 days
  Least looking forward to in the next 30 days

Reviewing this worksheet during each mentor meeting makes it easy to better understand the complete person – not just professional aspects – and provides a conversation starter to uncover deeper topics for discussion.

What else? What are some more thoughts on using a worksheet to help with regular mentor meetings?

Over the years a number of people have reached out to me asking for help finding a co-founder for their startup. Much like the challenge of recruiting great software engineers, finding a co-founder is even harder, especially when considering the importance of the co-founder complement. Last week, an entrepreneur mentioned that he found his co-founder through LinkedIn. Brilliant. Recruiters use LinkedIn to find employees. Sales reps use LinkedIn to find prospects. Entrepreneurs use LinkedIn to find co-founders.

Here are a few thoughts on using LinkedIn to find a co-founder:

• Write out the desired personal and professional traits first, and then search for people that might have them (e.g. if you want a sales-oriented co-founder or an engineer-oriented co-founder as well as interests like sports or volunteering)
• Seek out referrals through existing relationships (e.g. email your LinkedIn connections asking for help)
• Allocate a serious amount of time to find the right person as it isn’t easy and doesn’t happen quickly
• Building rapport and a trust-based relationship takes time, so don’t rush into things

I’ve only met one person that found his co-founder on LinkedIn, but I’m sure there are many more examples out there. Finding a business partner is hard and LinkedIn is a great network to start the process.

What else? What are some more thoughts on using LinkedIn to find a co-founder?

Last week I was reading an article about a successful entrepreneur that had started an incubator to work on multiple startups simultaneously. Incubators, now called studios or labs, were popularized during the dot com boom, and most failed to work, leaving a negative connotation for many people. Now, the cost to start is 10x cheaper and there are millions of people with mobile broadband connections, making for a different dynamic compared to 15 years ago. While it is still expensive to scale, getting started is easy.

Here are a few ideas why entrepreneurs are drawn to incubators:

• Timing a market is terribly difficult, so having multiple startups running simultaneously increases the chance of finding a fit
• For many (most?) entrepreneurs, the starting part is more fun than the scaling part
• Small, dedicated teams without a legacy customer base can innovate fast, making it more fun to see rapid progress
• When a startup achieves initial traction, it’s much easier to raise money from investors, making the entrepreneur’s own investment go further by bringing in other people’s money

Look for more incubators/studios/labs to popup as entrepreneurs have exits and want to work on multiple projects. Entrepreneurs know how hard it is to time a market and want to hedge their bets by taking more of a portfolio approach.

What else? What are some more thoughts on the idea that entrepreneurs are drawn to starting incubators?

Fourteen years ago the dot-com crash had just finished and I went to my professor asking for $20k. He obliged, I started recruiting classmates as summer interns, and sought out my college advisor to take a leave of absence even though I was only 2.5 credits away from graduating. In hindsight, I was a little crazy, yet completely determined to succeed.

Jason Lemkin likes entrepreneurs that are a little crazy, in a good way:

Here are a few ideas to evaluate if an entrepreneur is a little crazy:

• When they talk, is there a glint in their eye that what they’re pitching might actually happen?
• Is there a feeling of determination that they’ll walk through walls to be successful?
• Are they blissfully ignorant to the challenges ahead while levelheaded otherwise?
• Do you get the feeling that it’s not a matter of if they’ll be successful, but rather when and at what scale?

After thinking about it, I agree that some of the best entrepreneurs are a little crazy, in a good way. Creating something from nothing is incredibly difficult, and entrepreneurs that are a little crazy are more likely to succeed.

What else? What are some other thoughts that entrepreneurs are a little crazy?

Recently I was talking with an entrepreneur that has an amazing team. He said that they paid well, but not the best. He said they had good benefits, but not great. So, naturally, I asked the next question: how was he able to recruit such a team? The answer, to him, is that people want to be on a winning team. Whether the company is winning or the local sports team is winning, people want to be a part of it.

Success attracts more success. As an entrepreneur, one of the initial challenges is to push hard enough to get to that first level of success. The milestone might come by way of a paying customer, or a team member that joins without pay — something that’s concrete and meaningful. Then, after more hard work, the next milestone is achieved. And the next. And the next. Suddenly, the Big Mo has arrived and things get easier. Winners keep winning.

Never underestimate the power of a winning team.

What else? What are some more thoughts on the power of a winning team?

With all the press about startups raising large sums of money at huge valuations, especially Slack just a few weeks ago raising $160 million at a $2.8 billion valuation, one item that hasn’t been talked about much is how large valuations help when it comes to recruiting talent. In the war for talent, equity compensation plays an important role, and larger valuations make it easier to give larger dollar amounts of equity, everything else constant.

Let’s look at how larger valuations make it easier to give more enticing equity grants:

• Post Series A, a standard equity grant for a software engineer might be .1% (one tenth of one percent)
• If the startup raises a $10 million Series A on a $40 million pre-money, the post money valuation is $50 million and the .1% equity grant is valued at $50,000, assuming a full, in-the-money sale of the business
• If the startup raises a $50 million Series A on a $200 million pre-money, the post money valuation is $250 million and the .1% equity grant is valued at $250,000, assuming a full, in-the-money sale of the business
• An equity grant of $250,000 is much more compelling than an equity grant of $50,000

Of course, if the valuation was less, more equity can be granted to make the dollar amounts equal. Only, the amount of equity is a fixed constant (e.g. you can’t have more than 100% of the equity, but you can keep diluting existing shareholders, within reason, to create new stock option pools). While equity is fixed, the valuation has no max, so a higher valuation makes it easier to make the same stock option grant look much better because the dollar amount is much higher.

Often, the size of the equity grant to a new employee goes down with each round of financing as the number of employees to be hired from the pool of equity goes up (e.g. after Series A, hire 25 people, after Series B, hire, 75 people, after Series C, hire 150 people, etc). So, assuming a bigger valuation early in the multi-round fundraising process, talent is easier to recruit as the same percentage of ownership results in a much higher dollar amount.

What else? What are some more thoughts on bigger valuations helping to recruit talent?