Founders research
My experience teaches me having an experienced, accomplished entrepreneur as a close consigliere is a huge advantage in a startup. For me, the best practice here is a post-exit startup founder investing angel money into the company as early as possible. There are other formats I’ve seen that can work.
On the other hand, I’ve seen too many first-time founders with no mentorship trying to fight an uphill battle and my heart goes out to them. I can go on and on for hours about the disadvantages of doing your first startup without extremely strong mentors but I think that at this point, after so much has been written and said all over the internet, if you don’t already know this you will probably never do. It’s grim, I know, but I want to focus on “how” and not on “why” — I believe the “why” is self-explanatory.
1. The Theory:
There is no reason not to have an experienced and accomplished startup founder mentor you, and there are many advantages to have one. Starting a startup without such assistance is a mistake. It is certainly doable, in Israel, to have at least one consigliere at the highest level. To validate that theory I went over 250 tech companies that had at least one Israeli founder, since 2001, and can be considered “significant”, and manually named all founders.
2. Reality:
In the past few months, I spoke with just over 170 founders, 99% of them first-timers. I gathered many conclusions and assumptions, and always finding myself back with the same thought in mind: “this has an answer, and people you can easily reach have that answer, and you’re not getting it”. This thought is not to say I have the answer because I rarely do, it is to say I had many questions and I saw firsthand how beneficial it could be to have someone that can share answers with you. Vast majority of founders independently do multiple things that were done so many times before.
The problem (meaning, not getting support) has two root causes, from what I witness: Some of the founders don’t think of getting advice as a routine practice; some of the founders take advice from the wrong people. This is not the core of this post but for further clarity, I will elaborate. If you are more interested in the thesis and my data skip forward, please.
2.1. No advice. Many founders think of advice as an occasional thing. I work, and when I have to make a hard decision I look for advice. This neglects the 1,001 thoughts that actually run through one’s head while starting a venture. The anxiety and concern, the “not knowing what you don’t know”. Going a week without bouncing your thoughts against a solid wall leads to bad decisions.
2.2. Bad advice. I have previously written a post about bad actors giving bad advice. I’ll just add here in a very concise way that in my opinion, if you are starting a business, the kind of expertise you need your mentor to have is starting a business. That’s a must-have pre-requisite. Even if you are dealing with a marketing challenge or a business model challenge, it is still crucial that you will first have the advice of someone that built, in person, a successful business (preferably with some shared characteristics to your own). More than a marketing expert. And that is not relating to the tons of “experts” that are not even experts of what they claim to be.
There is a major, huge even, pit hole to avoid here at all cost, which is not having mentorship or having a bad one. Bad mentorship is worst than no mentorship (usually costs more time and money).
3. Solution:
Get to someone (or a few) that built a successful business in your space. This is a flexible definition. Let’s break down get, built, successful, and “your space”, from the bottom up.
Your space: define it as you like. Could be as vague as “software” and could be specified as “an e-commerce marketing automation platform for South American medium-size sellers”. Could be a company with a similar go-to-market strategy, could be a company that had a similar target audience.
Successful: that’s simple. Your mentor should be more successful than you see yourself being in the next 2–3 years.
Built: was the founder or one of the founders of.
Get: best practice is to have someone like this invest $ in your company for equity. You gain his full interest and also send a strong message about their belief in your company. Second, best is that person being a business friend (first big customer, former boss, or just someone you admire professionally). The third option is to get someone like this to assist by granting them equity with no investment. If it’s done right it can work, but it rarely is done right. This category also contains most bad actors who are “professional advisors”.
4. What to do:
Obviously, there are many ways that work. What worked for me is, in extreme abriviation, is to establish a personal connection with the desired person, get them siked about what you’re doing, be willing to receive help, and convince them to invest.
This starts with networking (again linking back to a previous post I wrote) and basic human interaction skills to get people to like you. I was never great at it but I got better. One of my co-founders is probably an Israeli all-time best at it. Go to places, engage in conversations, convey enthusiasm about what you’re doing. Be positive and make people want to hear more and tell their friends about it.
After a connection has been established and the said person is interested in engaging, comes your turn to open your ears and heart for some tough love. Be willing to get criticism and to have self-doubts. I had more than once seen great advice gone to waste because of founders not being mature enough to take it. If this all was successful, you can approach your mentor with an offer to invest, and this is a subject to a (long) separate post.
5. Stats:
I created an anonymized list, with no names. It’s not 1:1 with the stats I’m using here below because a few people were crazy enough to start more than one company on my list (so they are counted once on the full list but twice on the anonymized list).
The theory I had was that getting to a potential mentor is practical and even accessible. So I counted them. The rules were company founded post-2001, pre-2019, raised more than $10m, and is now private & active, or sold, or traded publicly. 214 companies passed the bar, and I made an exception for 12 more (3 not VC backed, 2 founded in 2020, 6 founded pre 2001, one dead company). There are a few I probably missed so let’s round this up to 240.
I found 538 different founders. Following my 5% error assumption, please refer to 565 relevant people in Israel. Look for them and try to reach them.
There are 120,000 employees in those companies and they raised around $40 billion dollars combined. 156 companies employe more than 100 employees and 136 of the companies were founded after 2010. 22 companies who were founded post-2015 had already raised more than $50m (again, this does not count companies started in 2020 and 2021, but for Wiz and one more that is still in stealth mode).
137 founders started 54 companies who now employ more than 500 employees each. 63 founders started 27 companies who are traded publicly today (not all in the NASDAQ). 48 founders started 19 companies who raised more than $500m per company.
There are roughly 10m people in Israel, 60% ages 15 to 64. This means that, in very rough numbers, one out of every 10,000 people in Israel in the relevant ages started a successful company. I really can’t see a reason, if you are starting a company, that you will not be able to get to at least one of those 565 relevant people. These numbers can be narrowed down much further (say ages 30 to 64) and an average person already knows a few thousand people as it is.
I thought about making the list public but had two counterarguments win over. First, the list holds the names of people that don’t necessarily want anything to do with the industry (or with me). They didn’t ask to be on it. Second, if I’m urging founders to define success independently, and to define their space independently, why would the list be even valuable? It’s just for reference. The list is based on Crunchbase and Linkedin primarily, and also a bit of validation from SNC and Israeli press.
I strongly recommend every first-time founder to search for the companies which reached the level of success YOU seek for yourself, in the space YOU see as your own.
If approached, I will gladly share this information in accordance to the context.
