In this episode, Heidi discusses how founders tend to swing between two extremes — thinking it’s not all about them (when actually, it is), or believing it’s only about them and their company (when it really isn’t). She’ll review both sides and point out what founders often get wrong — and how to get it right.

More information: https://www.threshold.vc/podcast

Further reading:

On the occasion of our 40th episode, here are the names and links to the ‘village’ of people responsible for making this podcast a reality!

My partners at Threshold: https://threshold.vc/team

Carol Wentworth, my creative partner for all 40 episodes: https://www.linkedin.com/in/cawentworth/

Producer/Director Nick van der Kolk: https://loveandradio.org/

Forrest Lawrence/Working Title Recording Studio: https://workingtitlerecordingstudios.com/

Albertson Design for original concept, production, and creative artwork: https://albertsondesign.com/

Music composer Brad Wells: https://www.roomfulofteeth.org/bios/brad-wells

And thanks to our own Wendy McArdle, who manages distribution

While the internal dynamics of a VC firm may feel like a black box, you can often infer what’s going on based on how your VC is acting – if you know what to look for. In this episode, Heidi explains why many VC behaviors that seem confusing or inconsistent can make more sense once you understand the inner workings of venture funds and firms.

More information: https://www.threshold.vc/podcast/inside-the-black-box-of-vc-behavior

Further reading:

• Here’s a good post about when preferred converts to common, including in an IPO, as I brought up in this episode: https://www.startupventureadvisors.com/when-should-preferred-stock-be-automatically-converted-into-common-stock#:~:text=When%20a%20startup%20goes%20public,a%20minimum%20aggregate%20offering%20amount.
• Here’s a short but sweet summary of how VC carry works: https://www.angellist.com/learn/carried-interest
• Mark Suster has written some great material on understanding venture capital. His post on crossover investments will help you understand why VCs don’t tend to do them: https://bothsidesofthetable.com/can-vc-s-invest-across-two-funds-5ee7313808e7
• Here’s a link to my own prior episode about recaps: https://threshold.vc/podcast/the-case-of-the-radical-recap/
• And finally, I’ve linked to it before, and I’ll keep doing it – here’s a link to Evan Epstein’s great breakdown of private company governance to share with your VC if they are putting their own interests ahead of the company in your board meetings: https://evan-epstein.medium.com/duties-of-startup-directors-and-the-rule-of-common-maximization-9a2814b2fe2a

Founders need to understand investor priorities before they require investor action. The investor’s ‘zone of indifference’ describes an issue that can be problematic. In this episode, Heidi explains what it is, when it comes into play, and how to identify the likelihood of an investor landing in the ‘zone of indifference.'

More information: https://www.threshold.vc/podcast/understanding-your-investorrsquos-zone-of-indifference

Further reading:

• As promised, here’s a post written by Evan Epstein about fiduciary duties of venture-backed directors. It’s a must read! https://evan-epstein.medium.com/duties-of-startup-directors-and-the-rule-of-common-maximization-9a2814b2fe2a
• And if you want to go deep on the seminal case on this topic, the Trados case, here’s an in-depth podcast about it with Evan and Vice Chancellor J. Travis Laster of the Delaware court: https://boardroom-governance.com/episodes/travis-laster
• Here’s a great primer on preferred stock: https://darroweverett.com/preferred-stock-primer-value-protective-provisions-analysis/#:~:text=Preferred%20stock%20sits%20between%20debt,liquidation%20events%20and%20dividend%20payouts"
• Here’s a breakdown of simple preferred versus participating preferred and how it impacts the zone of indifference: https://veecee.co/understanding-liquidation-preferences-and-the-zone-of-indifference