Charles Xu

Sugests what to do before and during fundraising. Explains the terms in a term sheet. Offers negociation tips. See my notes here.

VC returns follow power-law distribution, so VC needs nontrivial allocations in home-run winners operating in huge markets. Connect with VC through relationships. Cold emails hardly work. For series-A term sheets, push for having the capital "P" Preferred vote on voluntary conversion. Avoid board observers, because they might chime in discussions and their presence crowds the room and discourages straight talks. Preferred and common investors are not always aligned, particularly with acquisitions + liquidation preferences. The Board has fiduciary duty only the common shareholders.

Aim for an order-of-magnitude improvement. Hire part-time experts rather than full-time trainees. Track unit economics and working capital. Conduct early, low-cost tests of your ideas. In this order: Idea, Technology, Product, Market, Economics, Scale. Keep your top performer happy and committed. Surprise them with bonuses, options refresh, larger scope or work. Reference check VC: talk to portfolio companies, former associates and partners. Deal directly with the decision makers at the VC. Dilution is relative; Out of cash is terminal. Always be thinking about the next round. Terms from prior rounds are hard to eliminate. Prioritize vanilla terms (no excessive liquidation preferences or ratchet), indicator of an aligned investor. Allow 6+ months for fundraising. Create urgency and scarcity. Don't share who else you are talking to.

Delaware C Corp for startups. No LLC. Limited liability, ability to allocate ownership, easier recruiting & fundraising, reduced co-founder risk Prefer Delaware because of better legal ecosystem, investor preference, ease of filing, board flexibility, privacy.

The real progress for startups is not how many JIRA tickets we closed but how fast we gain validated learnings—what creates value for customers and their willingness to pay—while minimizing waste. The book offers a systemic approach to PMF. See my notes here.

Navigating job levels and politics are not real personal growth. The only failure in your twenties is inaction. Ask for forgiveness, not permission. Do, fail, learn. Find every opportunity to work with the best of the best, because they will lead you to the career you want. With not enough data, some decisions must be opinion-driven, where you convince others with storytelling. Storytelling is the heart of sales and marketing. The story: you have a track record of good decisions, you analyzed risks and prepared mitigation, you truly understand your customers and their needs, and your proposal will benefit the business. People won't remember how you started but how you left. A great analogy allows a customer to instantly grasp a difficult feature. E.g. "1,000 songs in your pocket". If your company is disruptive, prepared for strong reactions and emotions. Write a press release before building products. It crystallizes what features matter. Practice delayed intuition. Research and prototype before committing. The first 25 hires come down to your vision and network. Hire seed crystals. Always start the pitching process when you don't actually need money. Keep asking what's the next step to get us to a yes? Any stock or cash you give as a commission should vest over time. Build a relationship-first sales culture. Keep meetings on track with agenda: "Let's talk about this outside the meeting, we still have lots to cover". If there was any controversial topic, the CEO should go to every board member, one-on-one, to walk them through it before the meeting. Perks should be subsidized but not free.

Easiest way to raise funding is building a great business. Each $1,000 in MRR adds $60,000 in company value (assuming 5x multiple). To go from PMF to escape velocity: ICP, marketing channels, moats, pricing, team, strategies, funnel bottlenecks. Avoid feature requests that don't align with the product's strengths or vision. Say no to many good ideas to prioritize the best ones. Understand the problem behind customer feature requests, not just the requested solution. Compete against bigger competitors through pricing, innovative sales models, and superior product offerings. Understand reasons behind losing deals (features, pricing, compliance). Differentiate to avoid commoditization. Network effects and integrations can be effective moats. Pricing should reflect value. Underpricing can hinder growth. Expansion revenue should align with customer success and value metrics. Charge significantly more for enterprise plans. Consider freemium models only for simple, low-support, viral products. Regularly review and adjust pricing strategies. Balance marketing efforts between quick-result and long-term strategies. Track marketing effectiveness. Avoid excessive marketing spend before PMF. Qualify sales leads before demos to save time. Delegate roles not tasks when building a team.

Competition is for losers. 0 to 1 is different from 1 to n. Every moment in business happens only once. It is easier to copy than to create. Leanness is a methodology, not a goal. Making small changes to things that already exist might lead you to a local maximum, but it won't help you find the global maximum.

Great startups prioritize distribution over product. Product itself is not defensive because of too many great engineers and second-mover advantages. Raise prices to test PMF, fund distribution and R&D, and grow faster. Delegate. Audit your calendar regularly. Say no more often. Passing 50 hires, hold weekly staff meetings and start layering in HR. Empower smart people. Communicate context, not exert control. One of the cofounders should be dominant. Board members should be people who you wish to hire but are out of reach otherwise. Take a lower valuation if necessary to get the right board. Talk to board members individually for open-ended brainstorming. Key determinant of candidate conversion is how quickly you interview + make an offer. Reference check everyone: "If this person joined my company, would you join?" Spend 30–50% of their time early on (scaling from 3 to 15 people) on recruiting.

Raise your standards, B players drive A players out. Hire people ahead of their own curve. Hire for aptitude over experience. Give people the career opportunity of a lifetime, a huge motivation. Coaching struggling teammates to a better place is possible but rare. Regardless of open headcounts, maintain a top-talent list and check in periodically because 1) if you wait until an opening, you can only tap the then-current suboptimal supply. 2) people currently occupying these roles might leave or could not grow as fast as the company. Staff ahead of need. Recruiting never stops. Trust is earned by delivering your promises. Always underpromise and overdeliver. Publicly admit regrettable decisions, which encourages everyone to do so. Apply focus and urgency. Time kills all deals. Time introduces risks, such as new entrants. The faster we separate from the competition, the more likely we are to succeed. “Priority” is a singular word. The moment you have many, you actually have none. Great execution is rarer than great strategy. Growth trumps everything else as a driver and predictor of long-term success. Once a start-up begins showing profits, investors conclude that either it doesn't know how to invest in further growth or that it has run out of growth opportunities.

Strategy and execution are both critical. Simple rules can bridge the gap between strategy and execution. Simple rules allow people to act without deliberating every decision. E.g. how frontline medics decide who gets medical care. Simple rules drive alignment across organizations and produce better decisions than more complicated models can, particularly when time and information are limited. 4-6 is the optimal number of rules. Three types of rules: 1) Boundary rules—whether to pursue or reject an opportunity, 2) Priority rules—rank options given limited resources, 3) Stopping rules—when to reverse or exit.

Do the things that don't scale. Prioritize growth and speed over efficiency. Good insights, but could be condensed into just one chapter.

Self-disclosure strengthens relationships, despite risk of being misunderstood. Stretch your relationship comfort zone 15% at a time. To communicate well we must express facts/cognitions and feelings/emotions. Emotions assign meaning, intensity, and importance to facts. Showing your vulnerability often brings people closer. Stick to your reality. Make no assumption about others. It is a profound difference between “I feel irritated and dismissed” and “I feel that you don’t care.”

Inquire instead of assuming intentions. Elaborate my emotions, and listen to theirs. Intentions, emotions, and identities are complex. I cannot control but prepare for others' reaction. Explore joint contributions to the dispute. Start with mines to avoid their defensiveness, but include theirs. People want to be heard. Listen actively by paraphrasing, eye contact, notes taking, and deep questions.

Negotiation is everywhere in life. The fixed pie mentality is not appropriate, because you will see the same people again. No need to grab all the value. Never lie because people always find out. Don’t give the numbers too early because you did not know everything at first. Practice is the only way to improve. Emphasize fairness and win-win. It is way easier to negotiate what is the right criteria and standard than to directly negotiate the price.

Mirroring upwards invites elaboration. Mirroring downwards (late-night FM DJ voice) builds empathy, trust, and calmness. Humans are emotional, sometimes irrational. Label the counterpart's emotion and motivation to get them to say "that's right". "No" is not the end of negotiation. Explore alternatives.

Give before you take. You gain trust by helping others. Trust solidifies relationships. Relationships build institutions. Build the relationships long before you need them. Be audacious. Respect the gatekeeper (e.g. assistants) who will make or break your access to the decision makers. Follow up frequently. Forward relevant articles to your network. Go to conferences to meet people, not to learn new knowledge. You engender life-bonding loyalty when you help others with their health, wealth, and children. Build an online presence with personal, generous, and candid messages.

交朋友看机缘，但更要经营。快速建立连接的办法是找和对方的共同点。赞美是打消隔阂的第一步。销售的核心是为客户创造价值。麻烦或帮助弱连接的人可以把弱连接转化成强连接。经过中间人推荐认识是捷径。向上交往需要充分的准备。话题的准备工作占成功的80%。从一切可能的渠道了解对方，包括他的出生地、职业、教育、公司、家庭、爱好、公益，找到和对方的共同点。拜访大咖时，带小礼品，无需贵重，但有心意，比如说他喜欢艺术，可以送一个世界著名博物馆的画册；她喜欢历史，你可以送一本好的历史传记。主动做活动或者会议的志愿者、组织者能创造向上社交的机会。提前到达会场能减少出席社交场合的压力和恐惧。主动邀请约饭能克服社交恐惧，获得主场优势，掌控时间地点。不熟的人从约午饭开始，午餐不占用个人和家庭的时间，接受邀请的概率要比晚餐大。"您好，我下周三正好到您公司附近办事，不知午饭您有安排了吗？希望和您在附近吃个便饭，聊一聊。"约不熟的人要告知见面目的和想聊的事情，同时间接地提出你自己的价值，比如："姐，我最近在某银行做私人银行的开放业务，因为您的人脉广泛，很想跟您取取经，也看看我能对您的业务有什么帮助没有。您下周有时间一起吃个饭吗？" 邀请一些可能有合力的人一起吃饭，告知被邀请者其他一起出席的人，可能会引起他们的兴趣。如果你认识餐厅的主厨，在那里请客就更棒了，他能提前帮你安排最好的座位和菜品，期间还能出来和你寒暄几句，问问客人吃得怎么样。

Most jobs are filled by contacts through personal relationships. Networking meeting goals: Gather information, Add new contacts, Gain an evangelist. Always be prepared for your meetings. Leave such impression: You are positive (upbeat tone, language); You are strategic (you know why you are there); You are organized (keep track on topics and time, take notes); You are gracious (grateful for their time); You follow through (prompt follow-up, meaningful ongoing interactions). Ask how you can help them. Gently ask for referrals. Bad: "Who else do you know that might be interested in buying from my line of custom clothing?" Good: "Who do you know someone interested in fashion?"

In decision making, human often resort to shortcut/reflex, such as reciprocation, consistency between commitment and action, conforming with those similar to us, adherence to authority, preference to folks we like, and equating scarcity with value. Awareness of such routines keeps oneself alerted to exploiters and magnifies your influence in work and life.

A good manager improves collective outcome with multiplier effects. Focus on purpose, people, and process. Prepare for meetings. Feedback is a gift. Manage expectations. Trust, delegate, grow.

Be kind, not nice. Practice continuous feedback. Delegate. Listen. Empathize. Build personal connections. Praise in public; criticize in private. What you measure, you improve. Set expectations. Process is risk management. Be curious, ask questions, learn. Better to talk about learning instead of structure, transparency instead of process. Culture is how the things get done, without people having to think about it.

People quit bad managers, not companies. Direct reports watch everything you do ("toxic tandem"). Watch your tone of voice, the way you look at people, the use of nicknames, a memory for faces, names and dates. These details refine your relationships. Effective leaders are both competent and benevolent. Humans prefer hierarchical relationships. The challenge is not to reinvent management but dampen known drawbacks.

Prioritize the audience needs. Use simple, concise words. Vocal variety (volume, speed, tone) maintains listener engagement. When presenting, explain what the audience is looking at before elaborating. Avoid "inside jokes" or references that may exclude parts of your audience. Listening is more powerful than speaking. Take notes, ask follow-ups, maintain eye contact. Consistency between words and actions builds trust and credibility. Ensure goals are SMART (Specific, Measurable, Attainable, Relevant, Time-bound). Articulate the importance of goals, especially from the perspective of your followers.

Every office is political. You can't avoid it. Use politics to get more things done. Look for personal similarities that make it easier for you to connect professionally to your colleagues and boss. Don't slip down to your colleague’s level, always take a higher road, call your colleague on the bad behavior. Build positive relationship with your boss instead of looking for ways to dethrone the pet. Build a network outside of your employer. To be looped in big projects, express interest in them. "I know I’m not on that assignment, but could I sit in on a status meeting to learn more about it?’" Once you’re in the room, offer to pitch in. Raise your hand for any role to start with. Very few people rise to the top of their profession without allies. Form more than one allies. It is critical to have them backing your promotion. Build relationships before you need them. Transparency builds trust. Don’t align yourself too strongly or permanently with anyone. Review and prune alliances. Escalate peer conflicts to your boss as a last resort: "John, I don’t think you and I are getting anywhere trying to resolve this issue. Would you be willing to go with me to ask Lydia for her help in working through a solution?"

"Follow you passion" is a bad advice. A rare and valuable job requires rare and valuable skills (career capital). Acquiring more career capital with deliberate practice gives you the autonomy to pursuit the work you love. Deliberate practice means doing things that hurt: playing guitar pieces above your skill level, or practicing the tennis backhand that you suck at.

Detailed explanations of ISO, NSO, RSU, and taxes with lots of references. 83(b) election. Secondary markets. Right of first refusal. AMT trap. Liquidation overhang.

Learn in the public. Write a lot. Open source your knowledge. Good enough is better than best. Invest in new technologies. Know your tools.

Renting out your time or just working hard will not lead to financial freedom. 99% of effort is wasted. Wealth comes from judgment. Play long-term games with long-term people. Find a worthy mate; be worthy of a worthy mate. Find work that feels like play. All returns in life—wealth, relationships, knowledge—come from compound interest. Reading is faster than listening; doing is faster than watching. If you cannot decide, the answer is no.

Habits are compounding and shape who we are and what we will achieve. The best way to build a habit is to make it part of your identity (I am trying to quit smoking vs. I am not a smoker), attach the new habit to existing ones, make it small (atomic), and surround yourself with people who have the habits you want. Willpower is limited; instead, design the environment to support your habits.

The same grit that won Ali the championships drove him to ignore signs to quit. Constantly reevaluate after learning new info. Free up resources to pursue better opportunities. Define quitting criteria (a state and a date) before starting. The worst time to make a decision is when you're "in it." Quitting is about forecasting—decision making with uncertainty. Make decision based on probability, expectation, and distribution. There is no point building the pedestal if you can't train the monkey. Tackle the hardest part of the problem first. Pedestal-building creates the illusion of progress and sunk cost. Be wary of escalation of commitment to a losing course of action. Quitting on time feels like quitting too early. Diversify your opportunities, keep exploring even if you are comfortable. Don't wait to be forced to quit to start exploring alternatives.

Grant yourself permission instead of waiting for others to do so. Cold email the people you admire. If you are not failing sometimes, you are not taking enough risks. Do not burn bridges. You are not going to like everyone and not everyone is going to like you, but there is no need for enemies. To make good decision in dilemmas, think about how you want to tell the story in a future job interview. Recognize your mistake, apologize early and profusely.

There’s no such thing as not giving a fuck. You must give a fuck about something. Rude gas station attendants and boring day-time TV shows do not deserve your limited attention. Prioritize your life based on personal values. You learn what matters to you through emotions and psychological pain. Happiness is about doing, not being. Nothing is once-and-for-all. Life is full of problems. True happiness occurs only when you find the problems you enjoy having and enjoy solving.

We often confuse luck with skills, and noise with signals. Investment returns are unpredictable. Stay in the game. Manage risk to never get wiped out. View the past and the future with probability/uncertainty, but understand the difference between probability and expectation.

Aim to be reasonable, not rational. The highest form of wealth is the ability to do whatever wherever whenever. Note that financial independence is not exactly about maximizing returns. Few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.

Wall street in 2010s. High frequency trading is not market making. It creates twice the volume, no additional liquidity, and perhaps a slightly worse execution price for the public. I wonder if network switches and FPGA got so much faster because of it.

The last lecture delivered by Professor Randy Pausch after his pancreatic cancer diagnosis. Feel empowered to dream big and enable others' dreams. Try hard. Be kind.

Memoir by a young neurosurgeon faced with terminal cancer. A bit about dying, but more about being alive.

Hope is not a strategy. Build systems to automate ops. Have an error budget instead of aiming 100% uptime. Monitor latency, traffic, errors, saturation. Push actionable alerts. Blameless postmortems.

Be outcome-driven: detect, triage, diagnose, resolve incidents. Metrics are numerical summary and aggregation and thus more efficient to query than logs and traces. Choose metric labels that don't have infinite cardinality. Prometheus is a metric format and storage. Prometheus storage is not horizontally scalable. Thanos, Cortex, Mimir, M3 are OSS alternatives to Prometheus storage. To scale a metrics platform: reduce cardinality using aggregation, reduce retention period, reduce resolution, reduce sampling rate, reduce query load.

Reading it felt like I just replied to a "get rich quick" email spam. I appreciate the emphasis on time management and delegation, but unfortunately Mr. Ferris sees his employment no more than doing what was assigned, or merely an exchange for money with time. I have to look elsewhere for aspiration, leadership, empowerment, relationships, and growth.