Tom NoraFounder/CEO/Investor - SW Startups.

I help startup CEOs and founders properly LAUNCH, BUILD, RAISE.

I have led several M&A deals, held the Chairman position, and have been Geschaftsfuhrer(CEO) of a German software company.

CS degree, software engineering background. Advisor to 3M, Pinterest, Apple, IBM.


Recent Answers

Wow, sounds like you have an amazing profit margin. The key is GROWTH. Continuous and stable, with the ability to predict future growth.

Therefore, your market niche is very important, to feed the growth curve within an order of magnitude and can't be too vague.

As others have mentioned, investors look for a $100-200 million valuation potential, as well as the ability to morph or expand as needed.

Contact me if you want to discuss more.

A slow growth company with stubborn founders is very frustrating and all too common; I've been an investor with a couple of these and it's like pushing a boulder up hill - they often just don't get it.

However, companies likes these often have unlocked assets within them that should be set free. If the founders own a majority it's difficult because they want to continue to control the company and keep their salary/lifestyle going. They also just lack the DNA to accept risk and challenge. Sometimes their goals get scaled back due to fear, etc.

A couple of things I try to explain:
1. Running a business at no or low growth is very precarious - it's hard to keep it from slipping into negative growth and losing that salary and value.

2. Let others share the risk of failure, hire outsider that can try something new without risking the entire business. I've taken this role many times with pretty good results.

3. Sometimes the problem is that the founders don't want any change that would make them look weak. Subconsciously they will let the company fail before they'll let someone else look better than them at building their business. In this case there isn't much hope, just walk away.

The bottom line is that venture funds are supposed to have a few of these, counter balanced by big winners. That's the game - focus on the winners.

tl;dr start your own networking group

I'm a startup consultant, helping startups with 2nd round funding, growth strategies, technology integration.

I moved back to Los Angeles in 2011 It was my hometown and just starting to become the very strong startup ecosystem it is today. Young people were moving there to have the ideal combination of So Cal living and startup success.

As I tried to navigate the new scene I found a few things had changed:
1. Many more "startup people" were in town than ever in L.A. history.
2. Some strong technical people and professional entrepreneurs were moving there, an indicator that So Cal had a future as a startup town.
3. About 80% of the people I met were posers, hustlers, or wantrepreneurs, looking for either instant success or trying to sell something to me.

I went to several meetups and conferences and parties, but most of the people I met were the wantrepreneurs. So I started my own meetup group, and the results were amazing. I met literally thousands of people and wound up doing business with several. Today, 5 years later, I'm still close to hundreds of the people I met from 2011-2014.

So my recommendation is to start your own meetup group, specific to your interests. If you use their search engine does a lot of the recruiting for you. It takes a lot of work on your part and the willingness to play "host" but the rewards are pretty amazing.

Bottom Line: There is a big difference between paying someone nothing ongoing and paying them even a small amount. The other answer where they were paid only $18,000 is still very different than no ongoing pay.

When you ask someone to commit their time and talent with no guaranteed return you'd better have a pretty convincing reason. what if your product doesn't work? What if you change your mind?

Many experienced entrepreneurs will advise people to never work for free, especially bus dev, and I would usually agree.

One option is to give them some equity up front, show that you're willing to take a risk. It would force you to choose wisely and treat them with more respect.

In most cases, this means your employee is already gone. I've been the guy in many situations who "saved" an employee who was leaving. Whether that required offering a non-scheduled pay raise or bonus or not, they usually left within 6 months. When an employee tells you this they're either trying to scare you into giving them something or want to leave.

Once the conversation starts, they are putting themselves in a pickle regarding the loyalty to their current employer, and most likely are building some loyalty to the new employer.

Let's say they stay, or are pondering the decision for a long time. You as the employer will never trust them as much as before and will feel like you were manipulated into talking them into staying. And they will feel a bit strange, kind of like telling a significant other that you're thinking about leaving.

And what happens if they stay and this comes up again in 6 months? We know the answer to that.

Are you underpaying them? It still probably doesn't matter, too late to fix that now. Also, both sides will have a delayed reaction, thinking everything is O.K. at first then growing their discomfort and/or resentment.

Just the fact that you're posting this question means you're likely frustrated.

You can't force them to stick with a decision, most employment is at will. What you can do is give them incentive. Where this has worked best for me is when we work together to sincerely analyze the employees strengths, weaknesses, desires to maybe restructure their job in several small ways. It's not always the money.

Contact me if you'd like to discuss more or if I can help you with this.

Tom Nora

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