Almost three years ago I wrote about why I work for equity, not fees. A few months later I described how I evaluate a startup in 30 minutes. Since then I have said many more yeses and far more noes. The model hasn’t changed: I don’t charge fees, I take a stake, and if I don’t deliver results, I don’t get paid. What has changed is the filter. It is stricter, more personal and, I hope, more honest.
It’s the end of the year, the time when I tidy up my calendar and my commitments. So I wrote down what has settled after three more years of working with startups, including a pandemic that stress-tested almost every business plan out there. This is not an evaluation method, I already have one of those. It’s the list of reasons I do or don’t join a company and, above all, how I say no.
Founders, but over the long run
Now, as in 2019, everything starts with people. The difference is that I no longer look only at how they handle a meeting, but at what kind of partners they will be three years from now, when things go wrong. Because, one way or another, things go wrong for everyone.
- Integrity. I’m not looking for perfect people, I’m looking for people who tell the truth even when it’s inconvenient. A founder who lies to a small customer today will lie to an investor tomorrow and, at some point, to me.
- Obsession. Not pitch-deck enthusiasm, but the quiet stubbornness of someone who would work on this problem even if nobody paid them. Without it, the first hard year is also the last.
- Whether they really want to learn. Many say they want feedback. Few use it. What matters is what they do after I tell them something uncomfortable, not what they say on the spot.
- How they treat people. Their team, their suppliers, the people who can’t do anything for them. A company’s culture is usually the founder’s behavior multiplied by the headcount.
Can I move the needle? If not, I say no
This has become the main question. My equity is only justified if I bring something the company can’t easily buy elsewhere. My experience is fairly clear: e-commerce, marketing automation, online media, international expansion, and my networks in Romania and in Cyprus, where I have lived since 2018. That’s where I can change something concrete, from how an online store builds customer retention to how a Romanian company enters a new market.
If a great project is in a field where I have nothing to add, I say no, however much I like it. I’ve come to believe the worst disservice you can do a founder is to take a seat on the cap table without actually helping. I’ve written before about what makes a good mentor, and I stand by it: a name on a slide is not advice.
Market timing and the path to revenue
The pandemic taught me to pay more attention to timing. In 2020 I watched e-commerce grow in a few months as much as it normally would in years, and at the same time I watched good businesses frozen overnight. I don’t try to predict the future. I just ask whether what is happening in the market right now works for the project or against it, and whether the founders have a plan for both scenarios.
Then I want to see a clear path to revenue. Not necessarily profit in year one, but a clear answer to “who pays, for what, and when”. In 2021, with plenty of money sloshing around, I’ve seen quite a few projects treat monetization as a problem for later. For an advisor paid in equity, “we’ll figure it out later” often means “never”.
My time, which doesn’t multiply
I work with many startups in parallel, I split my time between countries, and I have a family I’d like to see in person, not just on a screen. So before any yes, I ask myself honestly: how much time does this project need, and do I have it? If a company needs someone almost full-time and I can offer a few hours a week, pretending otherwise helps neither of us. Better to suggest they find someone else or make a hire.
What we expect from an exit
I now have this conversation much earlier than I used to. Some founders want to build a company they will run for the rest of their lives. Others want to sell in five years. Some want big investors, others want to grow from revenue. All of these are legitimate. The trouble starts only when each side has a different movie playing in their head. If I think we’re heading for a sale and the founder won’t hear of it, we both lose good years over a conversation we didn’t have at the start.
The red lines
There are a few situations where I don’t negotiate at all:
- Shady business models. If the company makes money only because customers don’t understand what they’re buying, I’m out.
- Regulatory games. Working in a new area where the rules are still being written is one thing. A model that depends entirely on a loophole that could close tomorrow is another.
- Founders who hide the numbers. Small numbers don’t scare me. Numbers nobody will show me do.
- Industries I avoid. There are a few sectors I won’t touch, whatever the upside, because I wouldn’t want to explain to my kids what I do there.
A yes from this year
So it doesn’t sound like all I do is turn people down: in October I became a business advisor at Devinoso, an AI-optimized affiliate network built for influencers. It passed the filter because it fits exactly what I know: performance marketing, affiliate marketing, online. I wrote about this space over the summer, when I explained why influencers need proper tracking. It’s one of the few yeses of 2021, and I’m curious to see what we’ll build.
How I say no, and what a founder can learn from it
A badly delivered no leaves someone discouraged and with no information. A well delivered no can be worth more than a yes. I try to stick to a few rules: I answer quickly and don’t leave people waiting for weeks; I give the real reason, even when it’s awkward; I make a clear distinction between “this isn’t for me” and “I don’t believe in the project”, because they are very different things; and, when I can, I point them to someone better suited.
For founders, my advice is simple: ask why. A no from someone who listened carefully is free feedback. If you hear it from several people, about the same thing, it’s not bad luck, it’s a signal. And if the only reason is that I’m not the right person, move on without a second thought.
How do you choose the projects you invest your time in? And if you’re a founder, what’s the most useful no you’ve ever received?