What’s the best way to use your board well?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Selectively engage your investors in the recruiting process. Use them when they can help. Use them to close an important candidate. Use them to get a second or third opinion on a particularly important hire. Don’t give your investors control over your hiring decisions but engage them as trusted advisors.

What’s the best way to use your board well?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Expose your investors to your team. Give them a sense of the culture of the company and the composition of the team. Give your best and brightest “air time” with your investors. Your employees will like it and so will your investors. I really enjoy being invited to speak to an all hands meeting, or to have lunch with the team, or to go play paintball with a couple portfolio companies.

What’s the best way to understand your company’s financial position?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays From The Archives: Cash Flow – AVC

Cash flow is really easy to calculate. It’s the difference between your cash balance at the start of whatever period you are measuring and the end of that period. Let’s say you start the year with $1mm in cash and end the year with $2mm in cash. Your cash flow for the year is positive by $1mm. If you start the year with $1mm in cash and end the year with no cash, your cash flow for the year is negative by $1mm.

What’s the best way to understand your company’s financial position?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Accounting From The Archives – AVC

If you have a company, you must have financial records for it. And they must be accurate and up to date. I do not recommend doing this yourself. I recommend hiring a part-time bookkeeper to maintain your financial records at the start. A good one will save you all sorts of headaches. As your company grows, eventually you will need a full time accounting person, then several, and at some point your finance organization could be quite large. There… (read more)

What’s the best way to understand your company’s financial position?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays From The Archives: The Profit and Loss Statement – AVC

A profit and loss statement is a report of the changes in the income and expense accounts over a set period of time. The most common periods of time are months, quarters, and years, although you can produce a P&L report for any period.

What’s the best way to understand your company’s financial position?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays From The Archives: The Profit and Loss Statement – AVC

Numbers don’t tell you everything about a business. That is very true. A P&L can only tell you so much about a business. It won’t tell you if the product is good and getting better. It won’t tell you how the morale of the company is. It won’t tell you if the management team is executing well. And it won’t tell you if the company has the right long term strategy. Actually it will tell you all of that but after it is too late to do anything about i… (read more)

What’s the best way to use crowfunding platforms?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Decoupling Advisory From Custody – AVC

I think the idea of a 10 year fund where the VCs have custody of the LPs’ capital and make all the decisions is not going to be the norm. Companies like our portfolio company CircleUp and AngelList are building important new platforms and paving the way with regulators to allow the same kind of thing that is happening in the stock market to happen in the venture capital market. And that’s a good thing. Change is good, even in my own business.

What’s the best way to use your blog?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Feature Friday: A/B Testing Headlines On WordPress – AVC

AVC community member Shana Carp has been building a neat service that A/B tests headlines for WordPress posts and helps you figure out the one that will bring the most traffic. It’s called BayesianWitch. You can sign up here and add the plugin to your WordPress.

What’s the best way to understand investor behavior?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Power Of Diversification – AVC

When you are an investor, there are days when some of your investments are doing great and some are doing badly. If you are broadly diversified, those days are easier to take. If you are all in on one investment, then those days are brutal. Entrepreneurs go all in and are rewarded accordingly when they hit it. Investors should not go all in. They should be diversified.