MBA Mondays Live: Employee Equity - Archive and Feedback

The first MBA Mondays Live class was last monday night.

I had an incredible time and I can't wait to do it again. There isn't much better in life than standing up in front a bunch of eager learners teaching something you know well.

The archive and photos from the event is permantly hosted on this link.

Here's the video of the entire class.

I'd like to get feedback on the class so I can improve it. So I've created a google form with a few questions on it. If you attended or watched the class and have five minutes to give me feedback please click here and fill out the form. I appreciate it.

I have watched the first fifteen minutes of the class and I've got some work to do on my delivery, speed (I was rushing), and crispness. And there are two math mistakes on the whiteboard. That really bugs me. The final dilution number for the founders in the dilution table should be 58.5% not 64.5%. And the number of shares to issue the CFO should be 75k shares not 46k shares. This first class feels a lot like the beta that it was.

My plan is to teach this same material live again, probably a couple more times. If I don't sell out, that will tell me that everyone who didn't get into the first class watched the livestream or the archive and that I should move on to a new topic. But I'm not sure that is the case so I will test that out. I don't plan to livestream this class again since we already have a video version it.

As I develop additional classes, I will livestream and archive the final class on the topic when I've got the material and pacing nailed down. That was a big takeaway from this experience.

All in all, this went extremely well. The basic setup of an in person class with a livestream and an archive is a format that works. I plan to use it to teach as much of the MBA Mondays material as I can in the coming years. That's exciting to me.

#MBA Mondays

Comments (Archived):

  1. Thomas

    I am at work. I stopped working and i am watching the video, and a few tears are falling from my eyes :)I wonna so much have my own company.

    1. fredwilson

      do it

    2. Carl Rahn Griffith

      You certainly have one of the key attributes. Passion.To echo Fred – Go For It!

    3. kidmercury

      after you get started you’ll be crying for a different reason :)but seems like you should do it. entrepreneurship is a sickness and it sounds like you are infected.¬†

      1. Matt A. Myers

        At how things are going now, I think eventually my tears will be of joy.

    4. Mark Essel

      You’ll have much less free time to absorb this type of information once you begin, so you’ll have to use it sparingly.

  2. Matt A. Myers

    I love seeing Fred The Teacher in action! ūüôā

  3. awaldstein

    Fred…I think this series has huge possibilities.You had fun, are passionate about the topic, speak from experience and from the heart.My advice to myself and clients about speaking, is that perfection is overrated. Personality, passion and connection with the audience trump everything else.

    1. JimHirshfield

      Couldn’t have said it better myself. His self criticism is over stated.

    2. Carl Rahn Griffith

      Some of the most vacuous and pretentious TEDx talks are from super-slick speakers.All sizzle, no steak.You’ve got a great balance of sizzle and steak, Fred! ūüėČ

      1. awaldstein

        Agree.It’s all about connection.I remember sitting in a huge auditorium listing to Bill Clinton talk about the middle east. Every person in that room, including myself, felt that they were having a private conversation with him.Perfection is in the connection.

        1. Carl Rahn Griffith

          Know what you mean, Arnold – that must have been quite an experience – when I was on a business trip to Houston once I was at a presentation where Jim Lovell was the (unexpected) guest speaker – has been the only time I have ever experienced the ‘you could hear a pin drop’ scenario.Not everyone has the stories he – or Bill C – has, of course. But, it is the person within that can transform any topic and so get empathy with the audience.Maybe a future topic here one of these days – not ‘presentation skills’ (Zzzzz) as such but something a bit more esoteric/human I suppose; the power of personality and empathy when communicating to people.I suspect we are going full circle and the personal/emotive (not corporate) pitch is more important than ever – more than any number of slick .ppt’s etc. Too many startups pitch as if they were corporates…

          1. awaldstein

            Balancing personal disclosures, honest humility as a poise and a focused point of view is the gestalt of successful communications. And of course, the key (and challenge) to connecting through ‘gestures’ online.The Clinton experience was some 12 years ago.I remember him responding to a question about how to balance partnerships with countries like Israel and Palestine. His response was an anecdote from his Grandmother who said to him as a child ‘that to have friends you need to be a friend’.That was his guideline for international politics!

          2. Carl Rahn Griffith

            Gestalt. Indeed. Brings back my cognitive studies, many moons ago…¬†

          3. awaldstein

            If you believe as I do that the web is all about people, social design as it rolls down to UX and out to sharing and dynamically around communities is everything.

          4. ShanaC

            now if only international politics ran that way…

    3. kidmercury

      wanted to join in here on the bashing of fred for bashing himself. i agree. perfection is overrated. people go to concerts for the live thrill, if they wanted perfection they’d listen to the album at home.¬†

      1. awaldstein

        I caught about 15 minutes of the presentation live.Fred’s got game! That’s all there is to say.

      2. fredwilson

        right

      3. jason wright

        NOT bashing at all. There’s no comment on perfection. Improvement is the game here, and not just for Professor Fred.Mercury is a very poisonous substance. That…would be bashing. LOL.

    4. John Revay

      Agree – Fred enjoyed giving the talk. It was in his room, he is passionate about the topic, audience was connected.

    5. Mark Essel

      Too much polish hurts KickStarter videos, if I remember correctly

    6. BillMcNeely

      I like Fred’s use of the AAR (After Action Review) Harvard Business Review had a great article on the AAR back in July 2005. Here is the link http://hbr.org/2005/07/lear

  4. jason wright

    When it comes to content that can be tricky to get right when standing up there in the spotlight (like math calculations) it’s sometimes good preparation to have those detailed bits already written down on a small piece of paper and taped to the edge of the board for a quick reference when writing out on the board during the class. Then you don’t stumble and your mind is free to focus on the broader point the bits are being used to illustrate.¬†We all know our weaknesses and we should be able to spot which bits of the session are likely to be the stumbles – just write them down beforehand and tape. Preparation is 90% of a successful class, but the 10% of energy and enthusiasm and delivery is what makes the class a good experience for the facing staring back at you.Next time take your jacket off, theatrically roll up your shirt sleeves, and look like you’re really up for it, even if on the inside you already are. The faces need to know it. Grab their attention from the get go. ¬†There’s also the ‘front row’ technique to help cross the divide between you and the faces. If you get stuck with something and someone on the front row comes up with the answer (like with the math problem, although it was not the right answer) just offer the marker pen and invite them to come up and write it on the board. Only do it if you know their answer is the correct one – we don’t want to embarrass people.The other possibility (if space allows) is to have one or two channels set between the chairs that allow you to walk toward the back wall. Then you can write a point on the board, walk amongst the faces, see what they see on the board, elicit responses, and be a part of the ‘crowd’. It creates a sense of togetherness and breaks down any barriers. A silent class is a killer.

    1. fredwilson

      i had the numbers on a sheet of paper over at the corner of the classi just wanted to do it without referring to themmy bad

      1. Carl Rahn Griffith

        Not a problem as I see it, Fred – it’s an interactive whiteboard talk and chalk session to explain the principles at a human level – not an Excel, thankfully! ūüėČ

      2. Jonathan Whistman

        I teach often and I always start my first thing on the whiteboard by saying, ” The whiteboard’s spell-check function is broken today…so no apologies”Always gets a chuckle and then I am less self-conscious when I make mistakes.Great job BTW!

    2. mikenolan99

      Great suggestions…I’d also suggest an element of “Team Based Learning” – during the lecture, challenge teams of students to work on a short project together… a specific question that they can truly work together on. (What exit valuation does this company need to produce $X for the founders?) – and then each team presents how they got to their answer.TBL is a great tool – I’d encourage anyone teaching to review the methods…

  5. John Revay

    I was lucky to be able to attend.I thought timing was just fine (one thought if timing was a concern for you is to place a clock someone in the room where you can periodically glance at – like there is most class rms).Essentially three main themes I took away.1. JLMs quote everyone goes to the pay window – include all employees.2. Dilution happens – fact of life ( I thought the whiteboard stuff was on point; Founders, Founder hires, Seed, Option pool, and Institutional investors).3. Issue employee based equity based on dollar value vs % of Company.I meant to ask a question about # 3 – if this is the norm today, the norm for companies that Fred is involved in, or more comp theory.Your comment about the math – I wasn’t concerned about the actual # being right – I got the point.Like the comments to blog post, I thought many of the questions were good. The great thing about asking Fred questions is that he answers from experience.

  6. Ariel Di Stefano

    Fred,This is excellent. I will watch it again together with my partner so we can get the action points on this subject. Thanks again.

  7. kidmercury

    hope there is a DVD…..and on amazon…..merchandise bundles…..oh! and google hangouts, i’m in the process of experimenting with that as a premium interaction service. problem is scalability……which i think can get reconciled via peer production (i.e. get your guest posters, trusted colleagues, etc in on the action)

    1. Carl Rahn Griffith

      ūüėČ

  8. John Revay

    Fred I was glad to receive an auto email from skill share asking for feedback this AMI already commented to you that I thought Skill Share would have simple tools to allow presenter to;A. send out an email about advance prep – scanning MBA Monday posts on related topicB. Polling participants – questions, level of existing knowledge of subject matter.C. Feedback after course – again I got an email this AM.These can not be expensive tools to create.

    1. William Mougayar

      I liked the feedback email after the class, but it should have been sent within 24 hours of the event. OpenTable sends you that feedback email within 24 hours, and Meetup sends it to you before the event is even finished!

      1. John Revay

        Hi William – it was nice seeing you at the class. I got your note – I will send a reply later tonight. Head line Meeting w/ Fred day after only went ok – worried we were not prepared enough & our timing wasn’t down. His advice was spot on. Talk w/ you soon

    2. CThomps

      Not super familiar with livestream, but can it accept live questions from the audience watching the live feed??

  9. Sharon

    It takes courage and confidence to watch yourself, observe yourself. I admire how accepting you are to just be you.  That is the biggest magnet for the audience.  

    1. CThomps

      Agree with this.  Amazing how Fred with his accomplishments will still watch his game film and self-assess.

  10. JLM

    Fabulous passion. You can’t fake passion. Very well done. Well played.You are a natural communicator and thus the only issue — the only issue — is do you want the class to be a “conversation” or a well developed nugget of learning — an “instruction”.If it is the former, keep it informal and natural and one off. Go w/ the flow each and every time coming back to the core subject matter.If it is the latter, use a bit more organization. Formal lesson outline, handout of everything you are going to put on the board, use a scrivener or PPT slides and keep your focus on the learning, the message.Repeat the questions before answering them. Folks at home might not have understood the question or heard them. Very small point.It would be interesting to poll the class as to their experience — How many of you own equity in a start up? How many company founders here? Pose some questions to them.Summarize at the end and plug your next class. Develop a following and sell tickets right on the spot to the next class.This was a natural and excellent broadening of your communication empire and any constructive criticism anyone might share is only the difference between a 350′ and 450′ home run. They are both home runs.Well played and congratulations.

    1. Tom Labus

      This was an upper deck shot on Opening Day!!

      1. JLM

        Indeed. Aptly put.

    2. John Revay

      JLM – you have many nuggets of learning that you share w/ us – well commented

      1. BillMcNeely

        I am feeling a JLM and Fred MBA Monday Live session in the future!

    3. PhilipSugar

      “You are a natural communicator and thus the only issue — the only issue — is do you want the class to be a “conversation” or a well developed nugget of learning — an “instruction”.”This is a great quote. ¬†One I have been thinking about quite a bit ¬†this week. ¬†I swore off Powerpoints more than 15 years ago, and I hate giving out an outline before my talk because I just watch everybody put their head down and not engage.I gave two “identical” talks last week. ¬†Identical because from my perspective I thought they both went great. ¬†(you can see from my blog I don’t always think this way)I always ask for feedback, and I ask in a way that I think most people provide me the honest response. ¬†One response was I lacked structure, and I had to have somebody redo via WebEx, the other was it was the best ever.I think its a military thing, because for me Monday morning meetings are about the last thing I ever want to do. ¬†I might be at the gym at 5am, but the last damn place I want is to be in a room with people at 7am on a Monday.

      1. JLM

        Everyone has different learning styles, different ways of processing information. That is uniquely their own challenge.

        1. PhilipSugar

          Yes and speaking……Watch how many less ums and aahs when Fred has when he is answering questions.I am the same way.

          1. JLM

            The key to public speaking is to speak one notch slower than you think so your thoughts are out in front of you forming the words before you speak them.

          2. fredwilson

            the ums and ahs come out when i don’t know what i am doing

    4. fredwilson

      great advice. thanks!

  11. Remo Siegwart

    Congrats to your first MBA Mondays live class! I’ve really enjoyed to watch the class on video, but it would be great if you could repeat the questions from the audience into the microphone for the viewers at home.Keep up the good work!

  12. Scott Barnett

    Funny, when you did the CFO example I was yelling at my computer “75K!!!” :-)When I worked at Bell Labs in the late 80’s, I was getting my Masters at Columbia part time. They used to ‘stream’ the classes live to a room at ATT Holmdel. It was half duplex, so it was a bit choppy, but it was nice to be able to participate on days I couldn’t get into the city from NJ. Maybe you can do the same (full duplex now though please ūüôā ??This was well worth the time and a great complement to your blogs. Keep going!I will fill out your form later tonight….

  13. Luke Chamberlin

    Hello Fred, I had a great time at your class and it was nice to meet you in person.Even through I had read most of the information before as posts on AVC, hearing it delivered all at once changed my understanding of the subject. I’m going to leave more detailed feedback on your form.

  14. This video inspires me to keep on doing what I am doing right now until I succeed. Thanks for sharing your wisdom and knowledge on a subject most of us newbies are still trying to understand. I’ll expect another round next Monday, alright? Thanks very much.

  15. testtest

    could try having someone online at the same time. bridge the gap between you and the online peeps watching.a tweet out before you start could get more people engaged with the live stream. was kinda expecting it and keeping an eye out.

  16. Tom Labus

    These are business issues that everyone needs to know whether you plan on starting a business or just work for someone.No one teaches you this stuff and most people don’t know what’s accurate or right and just try to bluff it since they don’t want to say “I don’t know”.You should have an “amnesty period” at the end when people can ask anything they don’t understand (no matter how stupid) under the cover of amnesty.This will open doors that you have not even considered.Bob Ross doing finance.

    1. fredwilson

      AMA. cool idea.

  17. kirklove

    Pimp, Iconoclast, and now Teacher.‚ÄstBravo

    1. fredwilson

      Can you add Punk to that list please?

      1. JLM

        You are a mensch not a punk.

        1. fredwilson

          ok, then both

  18. LIAD

    if someone doesn’t take the video screen grab above, photoshop a big doobie into Fred’s left hand and a sign saying ‘will teach for cash’ into his right, a comic moment will be lost forever.

    1. RichardF

       definitely a contender for canv.as

    2. Andy

      Employee equity is faaar out man

  19. Mark Essel

    Is this the beginning of a slow transition from full time VC to investor/teacher?Steve Blank is doing some of his best work as an entrepreneurial educator. I can’t keep up with all the practical knowledge he’s shared.

    1. fredwilson

      if i can do both, i would

  20. mikenolan99

    Great job, Fred.¬† Your blog has inspired my own teaching – great to see you in the classroom.AVC.com has been required reading for my MBA students – now they’ll have to watch your lectures.¬† Of course, sooner or later they may stop listening to me!

    1. fredwilson

      never

  21. MargaretNKinnley

    Each of us has walked out of a meeting. A pitch. A speech. And said…”Nailed it’. Feels amazing and pushes you forward through the days you are a bit off.http://goo.gl/0hxbj

  22. Kevin Friedman

    Thanks so much Fred. My main takeaway was a pearl I’ll always remember:”Move away from %-based equity distribution to some kind of $-based valuation ASAP”That’s going to be extremely helpful for our early stage startup and give us a framework to treat our early hires fairly. So thanks again.Can I ask you question? What is it about teaching this class that makes you excited? Just curious because you obviously already reach a huge audience with your blog and you could have just posted a video, for example.

    1. fredwilson

      the IRL personal interaction with people

  23. ZekeV

    Another reason you don’t need a 409A valuation on a restricted stock grant at founding is b/c you generally make an 83(b) election to include the full value within income on the grant date, rather than when it vests. And in many cases, the transaction is also not taxable regardless of difference between fair market value on grant, versus the price paid, because it is a contribution of property for stock to a controlled corporation under Sec. 351, in which neither the corporation nor the transferors recognize any gain or loss. Phew.But on a less nerdy note, I recently volunteered to speak on the same topic over at NYU-Poly Dumbo, and it was painful to watch myself on video. My law partner suggested to me that my talk would be improved if I structured the entire thing around one case study, rather than trying to cover the topic generally. This is just so freakin complicated once you start thinking about it, that it is almost impossible to cover in even close to an exhaustive way in a short talk.¬†

    1. fredwilson

      that is good advice

  24. Don

    Great series, thank you! Two questions:1. Could you elaborate on the proper % of companies for the Founding Team, Early stage. You used 5% for the stake in the ground but I have heard 20% is more appropriate for the founding team. Could you discuss the different members of a founding team (e.g. VP Engineering, General Mgr who makes trains run on time, etc)2. What if the company is an LLC instead of a C-Corp. How do we think about these different incorporation options?thxdon

    1. fredwilson

      20% would be on the high side in my experience. but we are doing a survey on that and i will have a ton of data to share soon.

  25. William Mougayar

    I enjoyed being there tremendously and I’m not saying it to please Fred. The best parts were when you deviated from the agenda and what you already covered in previous posts and we heard spontaneous remarks, as well as when you were answering questions. 4 tidbits I suggest for improvement:1. Consider 1.5 hr format instead of 1 hr. I felt the whole session was “rushed” a bit including the Q&A.2. Ask the attendees ahead of time to answer “Is there a burning question on your mind you’d like answered at the end of the class”. That way you can frame your content to cover that pro-actively, and you get a sense of what’s on the attendees’ mind beforehand.3. Have a Twitter hashcode for the event. Some were using @fredwilson, others #skillshare or @skillshare, etc.. It wasn’t consistent.4. Do it again. Rinse and repeat.

    1. fredwilson

      great feedback. thanks

  26. gleslie

    Really enjoyed watching the stream and will try to catch class live at some point on a new topic. You definitely have a natural ability to teach. My only feedback has to do with the combination of pre-reading material and what you cover in the lecture.The lecture could have stood alone without the pre-reading. I think the lecture could be even more valuable if more time was spent covering practical applications from your years of experience. Quickly review the topic/calculations from the pre-reading and then help us understand the pros and cons of the decisions that have to be made. Would love to hear some examples of different start ups that used different employee equity distributions and why that worked or didn’t for their business.

    1. fredwilson

      yup. that is consistent feedback. and very good feedback. thanks

  27. Muneeb Ali

    Now the only thing that’s missing is you getting emails from students starting with “Dear Prof. Wilson”!

  28. sigmaalgebra

    Welcome to teaching!You did fine.When I got a Bachelor’s in math, the next year I was a math grad student and ‘Graduate Associate’ assigned to teach trigonometry.¬† The book had already been selected.¬† So, I glanced at the book, thought about when the tests would be, picked how much of the book to explain, walked into class, and explained.¬† It worked fine.Later taught calculus, college algebra, and ‘new math’ for elementary school teachers.¬† At another university taught an introduction to computing.¬† At another university, as a prof, taught optimization and some computing.¬† In all cases, I knew the material well and proceeded much as I had for the trig class.¬† What you did is comparable and fine.More generally, I’ve sat in a LOT of lectures; again what you did was fine.For the way a B-school usually works, your lecture was in the style of an explanation from a ‘practitioner’ which for the subject is appropriate.¬† One reason such content is so rare in B-schools is that the profs so rarely have the knowledge from the practical experience, e.g., in this subject comparable with what you have!Maybe if you want to look like you are making an academic A+ effort you could (1) look at your video and extract some ‘central issues’, e.g., everyone goes to the ‘pay window’ and at the same time, the IRS 409K regulation, keep everyone from having to send cash to the IRS before reaching the pay window, company stock repurchase rights, the roles of common and preferred stock, the standard ways of providing employees with equity, and (2) formulate a list of ‘objectives’, e.g., simplicity, transparency, fairness, preserve company cash, retain founder control, motivate employees, retain important employees, make the investors rich, make the founders richer!¬† Then at the beginning of the lecture list (1) and (2) and make the lecture about how to do well using (1) to get (2).Academic physics-envy theory icing on the cake might be a clean ‘optimal’ way to get (2) from (1) although I doubt that any such can exist.¬† Lacking any such theory, another approach to academic icing might be some descriptive statistics of what has been common or even just a list of some real cases.But what’s actually important is what you did and not attempts at inappropriate academic make-work, junk-think, busy-work, prof-scam nonsense!¬†

    1. JamesHRH

      Your keyboard is Dvorak’d, right?

  29. Jim

    Fred,I watched the livestream and enjoyed it. What I guess I expected were practical “Fred Wilson Stories” – this is what worked at this company and this is what didn’t work at this company.Your “experiences” are MUCH MUCH MUCH more valuable than facts – that’s your MVP in teaching. Please share experiences – this is what happened here, this is why stock option pool didn’t work at x, company Y didn’t have a big enough option pool and it caused…JLM captivates me because he shares his stoies/experiences wrapped around his facts.¬†

    1. LE

      “Your “experiences” are MUCH MUCH MUCH more valuable than facts”¬†Although that wasn’t the purpose of the lecture obviously, agree with this 100%.The important thing to me is normally the factors involved in choosing one path vs. another and the war stories are good ways to illustrate this.¬†

    2. fredwilson

      that is great feedback. i am trying to figure out if i need to do the foundational stuff before i get into stories

  30. Sari

    I attended as well, and I think that perfect math definitely wasn’t the takeaway for somebody who is having their first exposure to employee equity here in your class — although I can certainly understand how it would be for those who aren’t so wet behind the ears. In that case, clarify away!!! On my end, you gave us a very clear framework for how to think about equity; how the decisions you make impact hiring practices, the health of your company, tax considerations…everything.¬† Actually, I think this class would have been really useful not just for founders but for people considering employment at startups. Anyway, thank you!!!!

  31. John

    How much of the company stock should board of director members get? If you bring in independent board members, how do you properly compensate them? Will VC’s invest in a startup without a board in place? So it seems that you should have included a in your math setting aside a certain percentage for board member compensation.

    1. fredwilson

      you can use a portion of your employee pool for that

  32. ShanaC

    First issue”I disagree with @sigmaalgebra’s approach. Just because you are using a lecture style used in a university classroom doesn’t mean it is a good style.From a pedagogy perspective, you need to be actively checking in if your students understand what is going on. By minute 8, you’ve introduced 3 different events that would effect employee equity. By this point, I would have expected you to do the following-Thrown out a bunch of numbers to the class asking everyone to do 1 example of sharing equity with the first hire, prefunding.-Thrown out a bunch of numbers to the class using a funding event asking them to calculate the percentages.From there, you need to get the class (everyone) to give you his/her results. The reason is feedback: you will know if your students understand the material, you will know which students need more help, and you will be better able to pace the material.Note: I stole this from pedagogy material from teach for america types. You may want to find out what they are giving their teaching fellows in terms of material so that your classes become more effective.

    1. LE

      ”¬†you need to be actively checking in if your students understand what is going on”I call this “yetta nodding”. You look at the people in the audience. The portion of them nodding their head vs. deer in headlights ratio needs to be above 60% (arbitrary the concept is what’s important).

      1. fredwilson

        my dad was a professor. he would throw an eraser at anyone who was sleeping in class.

    2. sigmaalgebra

      Sorry Shana,The main goal of Fred’s lecture was to communicate information about employee equity.Was he successful? Let’s see: From the questions it was clear that the audience had no trouble following the lecture and ‘got it’ and even asked questions more detailed than the lecture. So, net, the main purpose, to communicate content, was achieved well.The lecture was clear enough that any B student in college or even high school could easily have taken notes and walked out with the key content of a nice document and enough to have produced a polished version of the ‘class notes’. So, again, the purpose of communicating content was achieved.Shana, that was GOOD work and SUCCESS, goal achieved. When we achieve a goal that well, we don’t hover there and try to critique and polish it for no good reason but move on to more productive work.Given this success, other considerations would be from wasteful window dressing down to wastes of time down to distractions. In particular, given the success, necessarily the ‘style’ was quite sufficient for the need.> Just because you are using a lecture style used in a university classroom doesn’t mean it is a good style.Actually, I would claim that, for the purpose of the lecture — information on employee equity — using a lecture style that is broadly the most successful in university classrooms in more advanced content in more technical subjects is almost certainly and necessarily “a good style”, and here’s why: Without a doubt, far and away, by a huge margin, nearly all the most advanced, complicated, and difficult information presented in our civilization is presented in good form via a fairly standard, good university style in university classrooms and seminars. In comparison, nearly everything else in our civilization is baby talk babbling.In particular, in a high quality university course, style little better than what Fred used is the best there is in academics and sufficient for a student who takes notes to end with a document that is close to a polished text in the subject. I have several sets of such notes on my bookshelf. To get an absolutely beautiful presentation of ergodic theory, Banach space theory, the Lindeberg-Feller conditions, the astounding application of the law of the iterated logarithm to excursions of Brownian motion, the completeness of L^2, continuous time, countable state space Markov processes, the Kuhn-Tucker conditions, Fourier transforms of L^1 functions, the Gershgorin circle theorems, and much more, I need take only a few steps to a shelf in my library with my manuscript class notes.Once in Manhattan at a fund raising event for the graduate school I went to I was talking with my favorite professor and his dean and said of the professor’s course, “Best course of any kind I ever took in school. Powerful material, beautifully presented. Each day it was a shame to erase the board.”. And the professor did each lecture with notes on a few sheets of paper, a piece of chalk, and a blackboard. That was as good as it gets.I’ve heard lectures by E. Cinlar at Princeton, M. Avellaneda at Courant, F. Almgren at Princeton, J. Doob at University of Illinois, S. Eilenberg at Columbia, E. Stein at Princeton, and many more, and there was nothing about their style much better or much different than what Fred did. The style in common was quite sufficient for some of the most advanced content on the planet. Huge experience gives overwhelming evidence that for the purposes under consideration looking for something different and better is just digging in the wrong place.There is a video clip of A. Wiles lecturing on his solution to Fermat’s last theorem, one of the most spectacular accomplishments of the human mind in all of history, and his style was not much different or better than Fred’s.Here’s the crucial point of the style of Wiles, Wilson, etc.: The lecturer is a bright guy, really knows his material, presents it sequentially and logically in the way he understands it which, then, is almost certainly a good way to receive and learn it. Beyond that he should start writing in the upper left corner of the board, speak and write clearly, and face the audience most of the time. For a bright person who understands his content well, what he includes and excludes just from following the way he understands is tough to improve on.Trying to add elements of style promises a third wheel on a bicycle, a fifth wheel on a wagon, and mammary glands on a boar hog; modifying the style promises to extract defeat from the jaws of victory.When we have Michelangelo painting the ceiling, we don’t call in house painters to say how to improve the technique!”Things should be as simple as possible but not simpler.”.Shana, accept the good news: For the purpose, Fred’s style is about as good as it gets. Any significant change promises to be worse.Shana, it appears that you believe that a style much better than what Fred used and I described as the best from academics is doable in practice soon, and to me the evidence is overwhelming that such a belief is not correct. Following that belief risks an emphasis of style over content that can hurt the content, and clearly we don’t want that.

      1. ShanaC

        Point 1a) I have no problem with his lecture style. He communicates very clearly. Even so, he still has to gauge whether students understand, since people learn through different ways. Point 1b) even though the lecture was beautiful for your favorite professor, how did said professor know that the vast majority of his students understood the material? Feedback loops are necessary.Point 2) I think the reliance on lecturing in math and CS classes is a hinderance for people to pick up math and CS, mostly because it never exposes the teachers to what they need to review and what they don’t need to review. I’ve been in classes with plenty of students who did fine on exams because they were spitting back material exactly as the lecture was set up, but had no idea how to apply said material – this is a problem that is only solved through getting feedback mechanisms up and running.

    3. fredwilson

      your suggestion to get feedback was the reason i created the google form. so thank you for that. i have gotten 72 responses so far. that’s a ton of useful feedback!

      1. ShanaC

        And I hope you use said feedback!

  33. JamesHRH

    I am all day away from a window to watch the archive ( but I will ).I would just like to support Fred in his self criticism.Improvement is always the right attitude!

  34. LE

    So far I’ve watched 13 minutes of this.”speed (I was rushing)”I thought the delivery speed was fine.¬†And actually I would have preferred faster delivery.¬†One of the reasons I like to deal with New Yorkers, they talk fast. (I can cover a NY phone call 2 times faster then a midwest one.)For me, I thought to much time was spent on the math. The basic concept made sense for me in a snap and I didn’t need the specifics or the exact numbers. If I had to learn the specifics of every concept I need to employ I would get bogged down and never get anything done. I always encourage people to learn concepts and not specifics. ¬†Concepts allow you to changed easily when the situation change and you don’t get bogged down in memorizing facts, figures and things that are only relevant to one situation.Concept: “Place salmon on center rack on Hi. The Salmon is cooked when the fish starts to ooze oil and is slightly golden (shown with a picture) Check at about 7 minutes…. ¬†(Pizza places don’t cook by time they do visually..)Specifics: “Cook the salmon for 7 minutes (without mention of the concept) …”

  35. Dave W Baldwin

    Good job… I know the math error eats at you.Disagree with William’s suggestion re 1.5 hours.¬† Would be better to be toward 45 minutes.¬†If you are going to do it a couple more times, it will probably drop toward 50 minutes.Easier to then edit then place on DVD for classroom showings down the road.

  36. William Wagner

    You look like a wasted Gerard Butler on the thumbnail snapshot – sleep much?

    1. fredwilson

      no. that’s a problem.

  37. Rohan

    There’s a lot of great feedback here. My add-The best workshops I’ve attended always have me very involved.It happens by splitting the group into groups, giving them a small exercise, having them use their brains and then.. it’s back to the professor for the wrap up, and sometimes, the aha moment.So, the lecturer actually does less of the speaking/teaching and becomes a facilitator encouraging people. I find myself remembering stuff from such sessions a lot more..Perhaps it’s not applicable here and doesn’t fit in with the outcomes you’d like to achieve. Perhaps it is. Leave it to you to decide. ūüôā

    1. fredwilson

      i’ve thought about the workshop approach. not sure i could do it in an hour.

  38. jason wright

    Have you thought about having a faded ‘avc.com’ or ‘usv.com’ in the corner of the screen of every video you make, and / or in black lettering somewhere on the white board you use in class?avc might last longer than usv – you never know.

  39. Chris Ked

    HI,the class was great. I would like to thank you to share this with your audience in the archives. Looking forward to more MBA Mondays in the LIVE format.Streaming the video had a huge lag from time to time. I am sitting behind a 32mbit connection from Europe, so I expect everything to run smoothly =) However, I expect a decent load on the livestream servers.Have a great day.

  40. andyswan

    Awesome that it was open bar (just assuming based on the screen capture)

  41. Pete Griffiths

    Great stuff. Many thanks.

  42. JamesA

    Thanks Fred.  Thoroughly enjoyed the visual nature of this.

  43. Dasher

    Your sincerity for helping entrepreneurs comes across in this talk above all else. That is your USP so don’t reduce that in the name of perfection.¬†

  44. Vchopeful

    Fred – I’m at Columbia Business School and we need professors to be able to teach at the level that you do. ¬†This is truly valuable stuff. ¬†Keep it up!

    1. jason wright

       Professor Wilson.

  45. Alex Cantrell

    An excellent class. I filled out a response sheet. Already, I am 100% a fan of MBA mondays. As a student at a liberal arts school with no business or marketing classes, this is a treasure trove.

  46. Tom Allen

    Maybe it was because I read all the pre-work you suggested last week, but I actually found it went quite slowly. It certainly didn’t feel like you were rushing to me.Thanks for doing this. I sure hope you continue because it looks like it’ll become as valuable resource as MBA Mondays already is.

  47. Tom Allen

    Here’s a question I can’t find an answer to online – can the company just pay the employee’s tax bill? e.g. Company is worth $10M, it gives 5% to a key senior hire, who then has a $500k taxable income. Could the company instead give say 4% (in shares, not options, etc) + cash to pay that tax bill? Or is this possible but never happens in practice because the company needs the cash?I’m asking because in Australia our government thinks options are taxable immediately, even though they’re illiquid.

    1. jason wright

      ¬†“…our government thinks options are taxable immediately,….”Meaning that the beneficiary of the option has a tax liability at the time of the grant of the option, even if the right to exercise the option is three or four years away?Does Australia have a thriving startup culture?

      1. Tom Allen

        Yes, that’s basically the gist of it and it’s hurting startups because it takes away options as a way of securing talent.I think the startup culture is thriving despite this – Sydney and Melbourne were voted 21st and 22nd in a recent review of world startup hubs:¬†http://techcrunch.com/2012/…

    2. fredwilson

      yes, but you would need to gross it up for the additional taxes they will have to pay on it

  48. Esayas Gebremedhin

    Great lecture Fred, I believe this video recorded classes are easier to digest than the written ones. I call it the “soul view”.Most of the stuff you talk about is very insightful to me, but for some reason I feel like: “I wish you had given this lecture a half year ago.” Wishes don’t work in past tense, but there is a lot of lessons I gonna take away from this.

    1. fredwilson

      those that come after us will benefit more!

  49. Guillaume Ouellet

    Really interesting, this kind of information is hard to find out there in the wild.¬†It is extremely easy to listen to you.Maybe bring a calculator in front with you next time or assign a “student”? ūüėČ

  50. DanielHorowitz

    Awesome. MBA Mondays video series. Awesome. Making this sort of information more free and accessible. Awesome. (Although I’ll happily pay…) Teaching. Awesome. Can’t wait for the next one. Thanks and Congrats.¬†

  51. BillMcNeely

    Fred, This talk was timely! I am having a discussion this morning about¬†an acquirhire that involves¬†one of my startups I founded. This information will change¬†the conversation. Thanks ūüôā

  52. WayneLifestyle

    Its a very very important article. Thanks for this great post.

  53. Robert Metcalf

    Fred. Thank you so much for this.¬†I keep running across founders that don’t seem to understand this subject, particularly when it comes to the founding team. When you haven’t raised money (or much), equity is all you have to offer your core team. And if you don’t structure it correctly, you don’t end up with a “if you go to the pay window, everyone goes to the pay window” scenario. And startups are too hard for it not to be worth everyone’s while

  54. Robert Metcalf

    Teaching note: think about repeating questions from the audience for clarity in the livestream. Stanford’s Entrepreneurial Thought Leaders (@ecorner) does a good job of reminded the speakers of this. Helps a lot in the recast.

  55. Robert Metcalf

    Ah, should have waited to the end, where you repeated questions during the Q&A. Would have been handy in the mid-lecture “interruptions”.

  56. Brad Lindenberg

    Hi Fred, I’ve just watched the video. It’s great.¬†What is your view around investing in international/overseas companies? A good example might be Soundcloud, which is based in Berlin as far as I understand. I assume they are not an LLC or INC?If the founders are willing to relocate to the US when funding is agreed, does it matter to you (specifically) if the company is¬†incorporated¬†overseas, or is it better to incorporate in the US from¬†day zero if that is viewed as the primary market but the founders are living outside of the US at the time of funding, but plan to relocate to NY within 1-3 months of being funded?¬†

    1. fredwilson

      we will do it for the right opportunity

      1. Brad Lindenberg

        Thanks… I plan to reach out in 4-5 weeks when my demo is ready…

  57. Dale Allyn

    Fred, it took me a while to find time to watch the video, but now have done so. I just wanted to add feedback as others have provided. From my p.o.v. you did great and I liked the pace. Really a good job.One of my pet peeves is that when questions are taken off-mic, they really should be repeated by the host. This was not done during the early discussion, but you did try to provide the question during the Q&A. However, after a few questions that reciting of the question was dropped or at least inconsistent, so online viewers were left to reverse engineer the answer to divine the question. Not a big deal, but not ideal either. I love the format, set up as discussion from your perspective of practical knowledge. Great refresher info, plus some new clarification (for me) on what can be an entangling topic. Again, great job. Thanks for doing it.

    1. fredwilson

      i wonder if we can mike the room in some way so that the audience can be heard on the video. i am going to look into that.

      1. Dale Allyn

        Fred, I think that would be great. There are “omni-directional” mics, and there are shotgun-style mic which would need to be directed toward the speaker (via an assistant) ‚Äď both fairly common and neither ideal I suppose. One problem with “miking the room” is the amplification of ambient noise. It would be great if there’s a noise-canceling option that would not require working on a “sound stage”.¬†The method of the host repeating or paraphrasing the question before answering is a bit “analogue”, but acceptable to me. But perhaps a couple omni-directionals in the back will be good enough without too much noise. It needn’t be perfect, just audible.¬†I really do think that the overall vibe of your presentation was very good and quite comfortable. Over-polish would diminish the experience IMO.¬†

      2. davidthomas8779

        I find that repeating the question often works better because it lets you translate the question into a coherent thought that you’re able to then answer.¬† Sometimes you get stream of consciousness questions that nobody understands.

  58. Ricardo Diz

    It’s amazing how much you give to the community! Thank you.¬†

  59. Emily Merkle

    the pleasure is ours.

  60. Ville

    Fred,¬†Great teaching. Didn’t quite understand one part, which to me is crucial in the very early stages of the company when it’s only you, your idea sketches and you have a few co-founder candidates in mind. Am not sure I understood how you advice giving equity to the Founding Team vs. co-founders, and how do you define each?¬†You said that you would definitely not give more than 10% of the company to any founding team member. How do you distinguish between a co-founder and a founding team member? If I have an idea I want to pursue and then find an engineer and a designer who said they will start working with me based on the little progress I have made ie. I am the product person with the product vision, but don’t write code nor push pixels. ¬†The founder would only drive product, keep the momentum and make problems go away. How much should he keep vs. give out?

    1. Ville

      By co-founders do you mean those who get only sweat equity and founding team are the low paid first hires?

  61. Jack Tai

    Thank you Fred! I was looking for something like this for a while! Thank you.

  62. Guy Malachi

    I wrote a post about this talk where it’s easier to see the multipliers and the calculations that Fred demonstrates: http://bit.ly/JDxQjp

    1. fredwilson

      Thanks so much for doing that

      1. Guy Malachi

        My pleasure, thanks for the talk Fred, great stuff.Looking forward to more similar classes from you.

  63. charlieok

    I’d like to learn more about the employee perspective.I’m interested in working on startups as an employee on the “founding team” — as the first technical team member for example.I know a lot about engineering but not a lot about business and finance. I want to know what kinds of questions to ask founders and how I might expect negotiations to go. Should I get my own lawyer in such a situation?Most of all, I want a strong sense that I am being dealt with fairly by the founders, investors and lawyers involved in the company.

  64. fredwilson

    can you elaborate?

  65. John Best

    Sure – the thing that’s always puzzled me is numbers/volumes of shares (I’ll leave type for now) versus ownership.e.g. The founder starts at 100% of the business (which therefore means 100% of the total shares).¬†As more owners are added, the business divided more, and more dilution happens, is there a greater *volume* of shares? Is there a new issue? If there is a new issue is it just a case of multiplication? What are the implications of a greater volume of shares?I was doing some reading in my local bookshop recently, but the livestream is much easier to follow (and, importantly free).

  66. CThomps

    I think Fred doing the whiteboarding live is the most engaging, but one consulting trick is to put up the data/math ahead of time and “reveal it” by peeling off taped up easel sheets in phases so that the facilitator can not worry about the weeds and making simple mistakes and just provide the color behind the numbers, which is the richest part. ¬†It has its tradeoffs, but just suggesting…

  67. fredwilson

    the company issues new shares. so you go from say 1mm shares outstanding to 1.25mm shares outstanding. in that scenario every existing shareholder gets diluted 20%

  68. John Best

    and that 20% is what gets assigned to the new owner/investor. That makes sense.Further, I found the founder/vesting stuff revelatory. I (in my naivete) hadn’t even considered my co-founders just walking.

  69. fredwilson

    you have to address that founder vesting issue asap

  70. Matt A. Myers

    Yup, loosing even 10% ownership is a big hit – especially when you realize all of your efforts and them bailing (whether legitimate or not) will just be making them money.I think any reasonable person would understand the worries, and I think you’d want to have reasonable co-founders. If they’re not interested in vesting then they’re likely not a good option.

  71. John Best

    Agreed, I don’t want to fall foul of IP squabbles down the line.

  72. Carl Rahn Griffith

    When we talk of his (BC) undoubted charms, I always remember that episode of The Simpsons where he was being chastised by Homer for sleeping with Marge – and ended up in bed with Homer, and as I recall a stunned Homer saying “Boy, you’re good” lol…

  73. fredwilson

    that’s what i want to do

  74. awaldstein

    True…amazing individual.We are all performers though. The best are the most natural. And even the best have days when they are really in the zone.Each of us has walked out of a meeting. A pitch. A speech. And said…”Nailed it’. Feels amazing and pushes you forward through the days you are a bit off.

  75. Dave Pinsen

    The spell he casts is so strong that journalists often accept what he says unquestioningly. I noted an example of that in a letter to the FT last fall, “Questionable statistics on job creation”.

  76. kidmercury

    i thought the magic of bill clinton was how any journalist or witness who says anything bad about him magically gets “taken care of.”¬†clinton death list:¬†http://www.lizmichael.com/c…

  77. CThomps

    I saw Clinton speak this Thursday at the SustainableOperations Summit at the Hilton in NYC.¬†He certainly still has it–garners laughs, deep thoughts, and always endears himself to the audience.¬†One of the best takeaways I “evernoted” from hisdelivery was his strategy of “turning into” controversy/debate/conflict (like a point guard going right into the space of a shot blocker).¬† He told a cool storyabout how he announced his run in NH, which was the only state where he was unfavorable in New England, due to the heavy NRA crowd.¬† He picked the start of deer hunting season as the day, and their top bar hangout as the venue…promising them that if they miss even one hour of hunting due to his policies, they shouldn’t vote forhim.¬† But if they DIDNT, they owe him the vote.¬† He carried the state by 15pts (or something to that effect).¬†The most interesting part about “turning into”conflict, was addressing the ‘elephant in the room’ in personal interactions as a sign of respect for your adversary.¬† He said that people who ignore the elephant and just say “nice tie” and b/s pleasantries is the easy way out.¬†My read on this is that it‚Äôs not for leaders; not for the bold; not for those that seek progress.¬†Its DISRESPECT to the person holding the counterview.¬† I LOVE this concept.¬† His point was that you aren’t a true friend, or even respectful conversational participant, if you choose the easy way andchoose to focus on surface pleasantries instead of acknowledging with courage/candor your differences in a tactful way and how you could attempt to find mutual value/deeper understanding.¬†I think you risk being polarizing, but with skill, you are much more respected (perhaps like Clinton & Newt share) if you turn into the contact and don’t take a pass.¬†¬†It‚Äôs always something I knew was a risk in my game, but my intuition told me somehow it was a better ethos to embrace‚Ķthat it would somehow be a net positive in the long run.¬† It was great to hear a leader like Clinton unpack this and I think you get more skillful at practicing this and thus manage downside risk.¬† If you never do it, you just carry more risk by being unpracticed when you actually have to doit.¬†Anyone else hear this from Clinton Thursday or before?

  78. awaldstein

    Leaves of Grass…great point.

  79. Carl Rahn Griffith

    Re: Leaves of Grass. Didn’t realise it was a public domain publication – just downloaded it free to my iPad/iPhone Kindle. Thanks for that heads-up. Am not really familiar with works of WW in any detail, mea culpa. Shall seek to address that!

  80. Carl Rahn Griffith

    It’s a bit like a golf swing, or landing a ‘plane – or a host of other examples of things we strive to perfect but often come to us sweetly when we are least thinking about them! You just ‘know’ when you’ve hit the sweet spot.

  81. Matt A. Myers

    You’d make for a bad investment if that’s how you approach networking..

  82. Tom Labus

    But that TA may not have the experience and stories to add.

  83. Matt A. Myers

    The first time I knew of Fred was when I went to a conference in Miami a few years back (FOWA; Future of Web Applications). The topic was the same. That was the first web/tech conference I went to, and I ate it all up, loved every moment of it, because it was new to me, and was teaching me an important part of information I’d need to know along my path; Good/funny story relating to that if you want a read entitled: My Man Crush,¬†http://mattamyers.tumblr.co…I’m sure this comes into play with Fred’s purpose trying to connect with new entrepreneurs, first-time entrepreneurs, and educating people is probably the best way of doing that. And here I am now. :)It’s nice to connect with new people too, and as it may be a refresher for some, I think it’s beneficial to get the message out as many times as possible – as it’s a good foundation to contrast other possibilities with, and promoted by a very successful VC.¬†It can also be confirmation for some leaders if they are doing things right, or wrong.

  84. fredwilson

    I deleted that comnent. Trash me all they want. Gotham Gal is another story

  85. Matt A. Myers

    I figured you / someone would – I just thought maybe something being said might make them think twice before posting something similar again….. perhaps futile.

  86. Sari

    ¬†Not sure what the comment was, but anybody who trashed your wife hasn’t tried her chocolate chip cookie recipe.

  87. LE

    One of the ways you can connect is by making eye contact with all of the members of the audience on a rotating basis.¬†Note also the “finger pointing” that the Clinton’s and other politicians use which works in larger crowds which you probably won’t want to use, lest you look phony (but it works see first 10 seconds of this video):http://www.youtube.com/watc