Here's something nobody tells you about a behind-the-scenes look at how we use dilution: the conventional wisdom is mostly backwards.
People always ask me how we manage our portfolio of 13 companies. The answer is a disciplined system built around dilution. I'm giving you a transparent, behind-the-scenes look at our exact process, templates, and the software we use to track everything.
The Framework That Actually Works
I'm going to share the exact framework I use when evaluating a behind-the-scenes look at how we use dilution. It's not complicated, but it requires discipline.
Step 1: your team matters more than your technology This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: the data tells a different story than your gut Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly Nothing works perfectly the first time. The companies in my portfolio that nail a behind-the-scenes look at how we use dilution are the ones that treat it as an ongoing process, not a one-time project.
Why Most Approaches Fail
Let me be direct: about 70% of the approaches I see to a behind-the-scenes look at how we use dilution are fundamentally flawed. Not slightly off. Fundamentally flawed.
The root cause is usually one of three things:
- Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
- Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
- Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Counterintuitive Truth
Here's what surprised me most about a behind-the-scenes look at how we use dilution: the best practitioners do less, not more.
When I was building MovieLaLa, we tried to do everything at once. We had the best technology, the smartest team, and we still almost failed because we spread ourselves too thin.
The lesson I took from that experience, and from watching hundreds of other companies, is that simplicity beats complexity every time. It sounds simple. It's incredibly hard to execute.
The Numbers Don't Lie
I've tracked the performance of companies in my portfolio that take a behind-the-scenes look at how we use dilution seriously versus those that don't. The difference is stark.
Companies that invest early in a behind-the-scenes look at how we use dilution see, on average, 2-3x better outcomes within 18 months. That's not a small edge. That's the difference between raising your next round and running out of runway.
One of my portfolio companies went from struggling to profitable in under a year after they finally got serious about this. The founder told me later that they wished they'd started sooner.
This connects to broader themes around rolling funds, dilution, follow-on investing that I've been thinking about a lot lately.
Wrapping Up
I've shared a lot here, and I know it can feel overwhelming. But here's the thing about a behind-the-scenes look at how we use dilution: you don't need to get everything right on day one. You just need to get started and keep improving.
The founders in my portfolio who excel at a behind-the-scenes look at how we use dilution share one trait: they're relentlessly practical. They don't chase perfection. They chase progress.
That's the mindset I'd encourage you to adopt. Start where you are. Use what you have. Do what you can. And keep pushing forward.
As always, I'm rooting for you.
Frequently Asked Questions
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 200+ startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.