‘Don’t wait to be perfect:’ 4 top startup tips from a unicorn’s founder and investor

It’s not the easiest time to be a female CEO, says Aileen Lee.

The longtime venture capitalist—who is also known for coining the term “unicorn” for private companies valued at $1 billion or more—says that the stressful moment we’re all living in has led people to be more critical of female and young CEOs than they would be otherwise.

“You’ve just got to be super careful about everything you do because people are just looking to throw stones at every female CEO out there,” says Lee, who is the founder of venture capital firm Cowboy Ventures.

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It’s one of the many matters she hopes she can help Guild Education co-founder and CEO Rachel Carlson navigate. Lee was an early investor in the education technology startup that hit unicorn status last year. The two spoke last week as part of Fortune Most Powerful Women’s “Paying It Forward” virtual series.

Guild works with companies to offer tuition reimbursement, online programs, and degrees to their employees. And Carlson says that one of her challenges right now is being a mission-driven company amid the pandemic. “Our employees expect more out of us, and that’s okay” she said, “but in this chapter it’s been really, really hard to acknowledge when we can’t do as much as we had hoped.”

Carlson gave the example of childcare. Guild is building a daycare center, but it can’t open due to COVID-19. “At the end of the day there’s only so many things I can do to step into the homes of our employees,” she says.  

During the session, Carlson and Lee offered up some tips to startup founders.

Don’t wait to be perfect

Carlson says that she knew a lot about Lee before the two met—she’d heard her speak in one of her Stanford business school classes, and she had a classmate who worked for her. But Lee was the last person Carlson talked to in the entire fundraising cycle because she wanted to make sure she’d perfected her pitch before she connected with the people she admired most. “I’ve slowly gotten better at that,” she says.

Lee notes that despite what’s going on in the broader economy, it’s a “total bull market all the time” in tech-related business. “Investors are more open than ever to basically see you early and give you feedback,” she says, adding that startups may get offers sooner than they expect because people are “quite preemptive nowadays.” Don’t wait until your idea or pitch deck is perfect, she says, before meeting with a small handful of people.

Look for advisors, not just investors

Carlson says she’s learned that building relationships can be powerful, but that doesn’t mean relationships with 100 investors. Get to know a few people well—not because you want them to invest in your next round but because they can help you look around the next corner.

Build a board that meets your needs

Carlson says early on, whenever Lee or Michael Dearing, one of her professors at Stanford, would give her a piece of advice, she felt like it was the gospel. She would go home and tell her now-husband about it and lay awake at night thinking about it.

At one point, she decided that she should move the business to her hometown of Denver, where she knew she wanted to raise her family. But Dearing told her, “That’s like leaving Italy in the Renaissance. You’re in San Francisco for a reason.” She went home told her husband, “Okay, we can’t move to Denver.” She says she’s learned how to bring board members the right topics but not with “0% conviction or 100% conviction,” and identify where she wants their help refining her thought process. (She did, in fact, move to Denver.)

Lee says that boards are essential in helping articulate the key risks to the business and in identifying areas where the business should accelerate. The big question to ask is, “What are the skill sets you need to have around the table,” she says. As the company scales, you want to change who’s on the board to meet your new needs. “A shared value system and a level of trust is really important because it’s easy to get sideways,” she says.

Find investors and customers who fit your mission

Carlson says that she was always transparent with every investor that Guild was going to be a B-corp, which balance purpose and profit. The company is now pursuing becoming a public benefit corporation, which has a legal framework that holds a company accountable for its bottom line from profit and social impact perspective. “It sets a bar for us,” Carlson says. “It’s really helped lay the table stakes of what we believe in and care about.”

A year and a half ago, Carlson says Guild was in conversation with a pizza chain, when its CEO said some racist things. Guild didn’t want to deny frontline pizza delivery staff the chance to participate in the program, but also didn’t want to be “band-aid tied to simply helping them repair their brand,” Carlson says. Guild ended up walking because the chain didn’t have the budget. “These are tough conversations you have to have internally,” she says.

Lee says that in tech in particular, there are lots of challenges around gender and inclusion of underrepresented groups. She says Cowboy Ventures will have a conversation with a potential portfolio company, and say, “Tech has a bad reputation for a good reason.” If they partner up, “we’re partnering to build a modern company that has an inclusive culture and goes out of its way to hire and take chances on people and build a diverse team. You have to be down for that.”

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