28 episodes

The Startup Solution tackles the make-or-break situations that entrepreneurs face, offering clear advice on how to survive and thrive in an early-stage company. Who’s it for? Founders, startup execs, and investors who want to learn from real-world situations, unpacked by Heidi Roizen, a “recovering" entrepreneur and current VC who has seen it all through 40 years and 40 boards.

Heidi uses a case method to unpack a new situation in each episode, breaking down why it’s a big deal and talking about how it was solved or could have been solved. The situations are from her direct experience, though all names and details have been changed to uphold our commitment to the Entrepreneur Protection Program.

Heidi has spent 40 years in the tech startup world, the first dozen years as an entrepreneur herself, and since then, 25 years as a venture capitalist. She’s served on over 40 boards, from seed stage to public companies. She also co-leads the Threshold Venture Fellows program at Stanford University and is a partner at Threshold Ventures.

The Startup Solution Threshold Ventures

    • Business
    • 5.0 • 37 Ratings

The Startup Solution tackles the make-or-break situations that entrepreneurs face, offering clear advice on how to survive and thrive in an early-stage company. Who’s it for? Founders, startup execs, and investors who want to learn from real-world situations, unpacked by Heidi Roizen, a “recovering" entrepreneur and current VC who has seen it all through 40 years and 40 boards.

Heidi uses a case method to unpack a new situation in each episode, breaking down why it’s a big deal and talking about how it was solved or could have been solved. The situations are from her direct experience, though all names and details have been changed to uphold our commitment to the Entrepreneur Protection Program.

Heidi has spent 40 years in the tech startup world, the first dozen years as an entrepreneur herself, and since then, 25 years as a venture capitalist. She’s served on over 40 boards, from seed stage to public companies. She also co-leads the Threshold Venture Fellows program at Stanford University and is a partner at Threshold Ventures.

    The Case of the Compromised Capital

    The Case of the Compromised Capital

    A person with a big online presence is calling out Athena for the seed investment she received from a big corporation that appears to be in opposition with Athena’s company’s mission. Heidi points out why founders need to know as much as they can about potential investors before they take their money to avoid being blindsided by an association that may lead to reputational fallout.
     More Information: https://www.threshold.vc/podcast/the-case-of-the-compromised-capital
    Further Reading: 
    Spot on to the topic in this podcast, Should Climate Tech Startups Accept Money From Big Oil?: https://sifted.eu/articles/climate-tech-startups-big-oil-gas An article about tainted donors, though topics also relevant to tainted investors, Tainted Money and Tainted Donors:  A Growing Crisis: https://johnsoncenter.org/blog/tainted-money-and-tainted-donors-a-growing-crisis Business Insider’s take on the topic: https://www.businessinsider.com/startups-silicon-valley-jeffrey-epstein-problem-2019-8 An article highlighting increasing concern about taking money from Chinese investors due to geopolitical clouds on the horizon: https://www.wired.com/story/chinese-venture-capital-silicon-valley-party-over Here’s the apology statement from Joi Ito, former director of MIT’s Media Lab, about taking money from Jeffrey Epstein: https://www.media.mit.edu/posts/my-apology-regarding-jeffrey-epstein/ Interesting Quora thread on “Catch and Kill” startup M&A: https://www.quora.com/Why-do-big-companies-acquire-and-then-kill-promising-startups

    • 13 min
    The Case of the Verbal Term Sheet

    The Case of the Verbal Term Sheet

    Rudy, a founder in fund-raising mode, received a verbal term sheet. A what? Heidi informs Rudy that there is no such thing as a verbal term sheet and flags all the other issues with the investor’s offer. In this episode, Heidi resets Rudy’s expectations of what is involved in the fund-raising process, including the time it will take to properly diligence investors.
     More information: https://www.threshold.vc/podcast/the-case-of-the-verbal-term-sheet
    Further Reading:
    Here’s a great piece about whether Term Sheets are legally binding, and what happens to your reputation if you renege on one. Term sheets are typically non-binding in that neither side is obligated to close the deal. But what is usually binding is confidentiality and exclusivity: https://www.jdsupra.com/legalnews/are-term-sheets-really-nonbinding-1765649/ Y Combinator has a great piece on seed fundraising, which goes into detail about debt versus equity here: https://www.ycombinator.com/library/4A-a-guide-to-seed-fundraising Here’s a good post on SAFEs versus convertible notes: https://blog.hubspot.com/sales/safe-vs-convertible-note And, finally, seed-stage investor Chris Neumann on how to diligence a VC: https://chrisneumann.com/archives/how-to-diligence-a-vc 
     

    • 16 min
    The Case of the Radical Recap

    The Case of the Radical Recap

    Simone is a founder in a challenging situation. The only financing she can raise comes with a catch – she needs to do a recap. Heidi reviews how Simone landed in this position, what a recap entails, and the best path forward for the company and investors.
     More information: https://www.threshold.vc/podcast/the-case-of-the-radical-recap
    Further Reading: 
    This is an excellent four-part series for entrepreneurs that explains how to navigate down rounds and recaps by Eric Ashman, highly recommended! https://www.linkedin.com/pulse/navigating-funding-roadblocks-intro-down-rounds-recaps-eric-ashman A great summary of the legal pitfalls and best practices for a cram down financing from the law firm Gibson, Dunn & Crutcher: https://www.gibsondunn.com/wp-content/uploads/documents/publications/Weirick-Wortmann-Stephens-Barinsky-DownRoundFinancings.pdf From the great Bill Gurley of Benchmark, a comprehensive tome about recaps and other forms of “the party is over” financings. He wrote it in 2016, but it is just as relevant today: https://abovethecrowd.com/2016/04/21/on-the-road-to-recap Here’s an interesting take from Joanne Wilson, an early-stage angel investor, on a recap of a seed company, with additional commentary by Brad Feld, my old partner and dear friend. It covers the danger of too many note financings and also talks about the people/reputation/relationship aspects of recapping a seed stage deal: https://gothamgal.com/2015/07/recapping-a-round  And here’s another interesting take from my fellow Stanford Lecturer and amazing entrepreneur Steve Blank about why recaps/cram downs are a bad idea. I don’t 100% agree with him, but I think his position is excellent food for thought: https://steveblank.com/2022/04/26/cram-down-a-test-of-character-for-vcs-and-founders

    • 16 min
    The Case of the Dubious Debt

    The Case of the Dubious Debt

    What do you do when you want to exercise your startup’s stock options but need to borrow money to do so? Do you take an interest-free loan from your company? Heidi counsels her former student Aisha on why that may sound like a great offer, but the devil is in the details. It’s likely that a loan could lead to painful financial consequences later.

    More Information: https://www.threshold.vc/podcast/the-case-of-the-dubious-debt

    Further Reading:
    Here it is, straight from the IRS, what capital gains are and the rate at which they are taxed:  https://www.irs.gov/taxtopics/tc409
    And also, straight from the IRS, how they look at forgiven loans as ordinary income: https://www.irs.gov/taxtopics/tc431
    And here’s a comprehensive Forbes article on using debt to exercise options:  https://www.forbes.com/sites/brucebrumberg/2021/09/20/financing-stock-option-exercises-in-private-companies-insights-from-a-top-financial-advisor/?sh=5f1fe75f2446

    • 14 min
    The Case of the 409a Freak-out

    The Case of the 409a Freak-out

    Many founders, like Alyssa, worry that a 409a valuation is considered a true market-based assessment of a company’s overall worth or potential. It is not. Heidi points out factors that influence a 409a valuation along with what is not reflected, namely, leadership, team quality, and disruptive potential. 
    More information: https://www.threshold.vc/podcast/the-case-of-the-409a-freak-out
    Further Reading:
    Carta provides a pretty comprehensive discussion of 409a’s here: https://rb.gy/z4vsky While we all think of 409a’s in the context of getting a valuation for common shares, it stems from The Internal Revenue Code, section 409a. A little ‘fun’ (if you think of the Enron bankruptcy as fun) history here: https://www.equityeffect.com/blog/irc-409a-overview-409a-valuations-explained/

    • 11 min
    The Case for the Independent Director

    The Case for the Independent Director

    An independent director can play a crucial role in mitigating conflicts of interest among board members while also providing valuable input. Heidi explains what an independent director does and why it’s important for a founder to include one on their board.
    More information:  https://www.threshold.vc/podcast/the-case-for-the-independent-director
    Further Reading:
    Every entrepreneur who raises capital should understand how preference structures work and the inherent pitfalls this creates in corporate governance. Excellent article on the topic here: https://thevcfactory.com/liquidation-preference-conflicts-venture-capital Fortune recently published an interesting piece on director independence. While it is mostly aimed at public companies, there are good considerations for private companies too: https://fortune.com/2023/10/16/modern-board-directors-independence PwC issued this handy guidebook to the whys and hows of adding independent directors to private boards, which you can find here: https://www.pwc.com/us/en/services/governance-insights-center/pwc-why-private-company-boards-need-outside-directors-v2.pdf A solid checklist from Underscore.vc for bringing on an independent director here: https://underscore.vc/startupsecrets/add-an-independent-director-to-your-board And finally, when you’re ready to actually look for that great independent director, theBoardlist (https://www.theboardlist.com) can be a great resource for you, as can Bolster (https://bolster.com).

    • 11 min

Customer Reviews

5.0 out of 5
37 Ratings

37 Ratings

TR Cape Cod ,

What more could you ask for?

Helpful, digestible, concise, practical, actionable. Delivered in a positive upbeat way. By someone who has seen it, lived it, mentored and taught it. What more could you ask for? Great job Heidi!

Zoe R.S. ,

About life

As I have listened to the episodes, my sense of the relevance and application of this has followed this path.

At first I thought, “This is really good for entrepreneurs.”

Then, I thought, “This is really good for anyone who works in pretty much any kind of business.”

Then, I thought, “This is about LIFE.”

Each episode, for me, ended up being about how to navigate life: showing up the way you hope you will in relation to other people, in hard situations involving a lack of experience and the mistakes that inevitably occur when there isn’t enough experience.

I also love Heidi’s voice. While telling about some quite cringey moments, her Kindest Elementary School Teacher voice is actually very calming to the nervous nervous system.

There is wisdom and mentoring in this podcast for living life.

AstronautTess ,

Laughing while learning

Such amazing information in the most entertaining and easy to digest way. Thanks Heidi!!

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