Sell Less

🔗 Houck’s Picks

My favorite finds of the week.

Fundraising

• Jesse Middleton on the biggest misconception in fundraising (Link)

• Colin Gardner on what not to tell people about your investors (Link)

• Chris Saum shares two fundraising red flags he’s seeing lately (Link)

Growth

• Paul Yacoubian on what not to put your sales team in charge of (Link)

ICYMI

• Ben Lang on how Jack Dorsey says any company can now be a mini-AGI (Link)

• Eurie Kim on the trait that all the best founders she’s backed share (Link)

• Harsh Makadia on what most people get wrong about AI in business (Link)

• Shweta’s hot take about first-time founders (Link)

• Taylor Shapiro on how the most important work is the invisible work (Link)

 Opportunity: AI Personal Trainer For Execs

Some of the best advice I got earlier on in my own journey as a founder was to sell things to people who have money to spend.

The quality bar will be higher but the ticket size, willingness to try (for the right offer), and revenue stability are all better.

Here’s another opportunity that fits that mold:

There’s probably a venture-scale shot you could take here, but also forward this to your friend who’s a personal trainer. You could change their life by telling them to spend a couple weeks learning the basics of OpenClaw and starting to scale their business even just a bit.

🧠 Framework: The Chain of Success

This week’s framework comes from Nascent Startups and is a pretty straightforward analogy:

Imagine your startup is a sequential machine (or chain) of things that need to go right in order for it to succeed.

Nascent identifies those as:

1. Paying customers

2. Team

3. Product

4. Marketing

5. Sales

6. Legal

I would encourage you to think strategically about the right things, and right order, for your particular startup.

Regardless of your chain, Nascent’s three takeaways are worth considering:

1. Fragility → The chain can break at any time, and it’s easy for this to happen. Too easy. Protect your chain.

2. Signal → Don’t build a link in the chain until you have some early insight that doing so will hold for the longterm.

3. Focus → You’ll need, as the founder, to shift your attention between the various links based on where you see weakness (to reinforce) or strength (to double down on).

📈 Trend: Founders Are Selling Less Per Round

When we negotiated the terms of our Series A with a16z, we held on to our equity tightly and pushed hard on valuation.

Honestly, we were too stingy (especially since we had only raised one previous round rather than the normal two) and should have prioritized more capital and/or letting more folks in the round.

(And fwiw, I also wouldn’t recommend this because it puts you in a tougher position for the next round. You have more work to do to grow into your valuation.)

But, since then, it’s become something of a trend.

Realistically, the obviously acknowledged transformational power of LLMs and the inability of legacy competitors to compete is giving founders more leverage than ever in valuation negotiations… and they’re using it.

Here’s data from Carta showing that, at basically every stage, founders are selling less equity per round:

You can argue this either means they’re taking less capital (unlikely given the massive investment interest in AI-native companies by GPs) or, more likely, that valuations are up.

Inflation, a willingness to “overpay” just to get into deals, and more trends are likely converging into this.

I’d love to see someone overlay this with whether similar dynamics played out during the dotcom era, or the post-App Store rise of mobile apps…

💬 Quote: It Comes Down To Pain Endurance

Hey, founder… you’re signing up for something that is going to suck sometimes.

It’s going to be painful.

You’ll make tradeoffs that surprise you, sacrifice things you thought would be near-non-negotiables, and of course deal with rejection.

The reason most startups fail is simply because there’s some pain threshold that’s too much for the founders to navigate and manage successfully.