0/ If you’re an SMB operator and want to increase the value of your business, focus on 2 things above all else.

1. EBITDA: how much $ do you make
2. Risk: how reliable is the $ you make

Enough has been written about #1. Here are 5 things you can do to tackle #2:

[THREAD]

There’s a lot of bad advice out there on how to pitch your startup.

Last year, I invested $1M+ and heard 200 companies pitch.

Every great pitch I've heard nails 5 ingredients.

In this thread, we'll go through each to help maximize your chances when fundraising

Let's dig in👇

1/ Every pitch should have 5 ingredients:

- Problem: Is this an issue
- Solution: Do you have the fix
- Market: Is this a big enough issue
- Business: Can you make money
- Team: Are you the people to do it

The best pitches nail all 5. Good ones hit 4. Subpar hit 3 or less.

2/ PROBLEM

The problem statement is an explanation of why a set of circumstances is painful for a set of users.

There’s one word in that sentence that is most important: painful.

If your problem is not painful enough, it's a vitamin.

The best startups are pain killers.

3/ SOLUTION

The solution statement is an explanation of how you address the pain felt by your users. If you don’t have the right solution, you won’t get customer traction.

Customers don’t buy your thesis on the pain point. They buy the actual thing that solves their pain point.

4/ MARKET

In tech, only businesses that have outsized potential get funded.

To have outsized potential, you have to either be in a:

(a) small, but rapidly growing market or
(b) large existing market that can be resegmented

If not, the business is not venture backable.

0/ Nothing pisses me off more than Lawyers ripping Founders off when putting investment docs together.

The worst part is most Investors aren’t helpful - 85% push the bill to Founders.

As an ex-lawyer, I saw all the inside tricks.

Here's how to reduce your legal bill by 90%:

1/ First, it’s important to understand how lawyers make $.

A legal bill has nothing to do with the end deliverable.

Wait what? That’s right. Lawyers make money via the billable hour.

Regardless of quality, you get charged based on how many hours the lawyer(s) spent with you

2/ The second cost variable is hourly rate.

Hourly Rate is a function of seniority of the lawyer you are working with.

Why is this important? Because the hourly rates go up FAST at top law firms.

Junior Associates = ~$400/hr
Senior Associates = ~$1000/hr
Partners = $1000+

3/ Most financings are very routine.

This was obvious at Seed (hence YC Safe), but it's also the case at A.

The problem is, as a Founder:

(a) You don't know what you don't know
(b) You don't want to mess it up
(c) You want to close fast
(d) You want to move on to your biz

4/ And that’s how you get trapped.

If you let the lawyers run it, a financing process will easily cost you $150k+.

You need to do 2 things: (1) pick the Lawyer and (2) establish the ground rules.

This week I interviewed someone who:

- Built a $1.5B company as COO
- Sold a $1B company to Microsoft
- Invested in 25 🦄🦄🦄🦄

Here’s 10 timeless lessons from one of the greatest tech entrepreneurs of our generation:

is a legend and man of many titles:

Founder, Executive, Investor, Coach, Filmmaker.

He’s also a down to earth guy that’s incredibly generous with his time.

This convo was a follow on from a dialogue we started earlier this year.

Alright...onto the lessons:

Lesson #1: Startups should NOT “do things that don’t scale”

The whole point of technology is to find an elegant, scalable approach.

The sooner you do that, the better off you are.

When you glorify doing things that don’t scale, you end up with a startup that doesn’t scale.

Lesson #2: You can’t do it alone, no matter how great you are.

To win big, surround yourself with:

A. Other greats
B. Role players
C. A system that brings out the best in everyone.

All three of these are equally important and allow organizations to thrive.

Lesson #3: Silicon Valley is no longer a place. It’s a way of doing business

20 years ago SV was the home for innovation.

Today it's now spread to many other places.

Risk Capital + Knowledge + Support = a more inclusionary and global ecosystem.

That's a great thing.

A THREAD on how most real estate folks structure deals with outside investors.

Most people utilize the "preferred equity" structure when they raise money from outside investors. They "syndicate" deals.

Here's the basics:

The person (or team of people) putting the deal together is the "sponsor". Also called general parter. Referred to on twitter as the GP.

They find the property, do all the work, hire the management company and take fees. They often co-sign debt and always secure the financing.

The investor is generally passive, doing no work and putting in cash. This is the "limited partner". Referred to on twitter as the LP.

They don't co-sign debt. They simply read reports and ask the sponsors questions and cash checks every month (if the deal is going well).

There are two equity classes.

"Preferred equity" belongs to the LPs. Cash talks, so this is a higher class of shares. They are first in the "capital stack" behind the debt (bank loan).

"Common equity" belongs to the sponsor. They are generally last in the capital stack.

Sponsors generally co-invest. That means they hold both equity classes. A 10% co-invest is standard.

That means the GP has skin in the game. His 10% co-invest makes him both an LP and a GP.

As part of our commitment to keeping our customers/community protected & informed, we are releasing a blog that shines light on transition between Stage 1 and 2 of #Solorigate/#SUNBURST campaign, custom Cobalt Strike loaders, post-exploit. artifacts, IOCs: https://t.co/b0ReHMa63u

Here are some highlights:
The missing link between the Solorigate backdoor and the custom #CobaltStrike loaders observed during the #Solorigate is an Image File Execution Options (IFEO) Debugger registry value created for the legitimate process dllhost.exe (ATT&CK ID: T1546.012).

Once the registry value is created, the attackers wait for the occasional execution of dllhost.exe, which might happen naturally on a system. This execution triggers a process launch of wscript.exe configured to run the VBScript file dropped by the SolarWinds backdoor (Stage 1).

The VBScript in turn runs rundll32.exe, activating the Cobalt Strike loader DLL using a clean parent/child process tree completely disconnected from the SolarWinds process. Finally, the VBScript removes the previously created IFEO value to clean up any traces of execution.

On the custom Cobalt Strike Loaders: we identified several second-stage malware, including TEARDROP, Raindrop, and other custom loaders for the Cobalt Strike beacon. During the lateral movement phase, the custom loader DLLs are dropped mostly in existing Windows sub-directories.

1) Let's talk about how Alibaba has achieved the holy grail of big data - a holistic view of the consumer - through a plethora of product offerings and investment.

This is their overarching moat. And Amazon's got nothing on them.

2) To the outsider, Alibaba's product range is confusing af. It's all over the place and there seems to be no core competency they are focusing on.

A few divisions - Taobao (B2C marketplace), Tmall (High-end B2C marketplace), Alibaba (B2B marketplace, Cainiu(logistics)..

3) ...Elema (Food delivery), Autonavi (maps), Youku (streaming) and Feizhu(travel booking)

Also the promotional strategy is weird, In the lead-up to singles day, half the time they were promoting some cat rearing in-app mini game.

Wtf?

4) When we view Alibaba's strategy as working to create a full view of a consumer's life, including their preferences, social network and spending capacity (and ability). Then everything starts to make sense.

4) Whether a consumer buys on Tmall or Taobao tells Ali about their preferences and budget, delivery address for packages and food lets Ali know where they live and where they work (also cross-referenced with property data to infer wealth level + occupation).

My path as a founder:

a. didn't do any marketing - no growth
b. hired an agency - no growth
c. became a marketer - 4x growth in 1 year

Skip a and b.

Step c. helped me make sales, and I had enough money to hire a content writer, then a marketing project manager.

She became head of content, then CMO, and now has her own team.

Now, when we know more about what works, we successfully hire agencies.

But as a founder, you never stop being a marketer.

You always think about the distribution of your product, ideas. And not just to your customers, to your investors, team, press, public.

Copywriting is a skill that never goes out of need.

Lunchtime update from the Grenfell Tower Inquiry:

President of Arconic's French arm accepts customers were 'deliberately and dishonestly misled' over fire classification of cladding panels, as he is asked about email saying failed fire test must be kept 'VERY CONFIDENTIAL'

The most interesting point of this morning's evidence came right at the end of the session when Claude Schmidt was grilled about an email his colleague Claude Wehrle sent regarding the serious failure of polyethylene-cored ACM panels when bent into a cassette form in March 2010

Remember: Arconic in 2004/5 tested its ACM PE panel when bent into cassette and when bolted to a wall with rivets. The cassette version failed spectacularly, burning 10 times as fast. But Arconic dismissed this as a 'rogue result' and drew no distinction in its marketing...

... simply presenting the panel as a 'Class B' (the rating for the rivetted panel, and the required standard for many European countries). Skip forward to 2010, and this email chain.

Mr Wehrle, the firm's senior technical member of staff is told about a trend in Spain and Portugal where clients are demanding more fire resistant panels, and warned that with this type of panel "our prices are no longer in the market"