During his more than 20 years of starting and running companies, Austin Veith has learned a lot. He has learned about himself, and the projects that interest him the most; he has learned how to leverage the power of technology to increase revenue streams exponentially; he has learned practices to maximize the hours in a day; and he has learned (the hard way) some of the most difficult mistakes that first-time founders make when they’re green and under pressure.
Now the CEO of startup factory First Light, Veith is especially vocal about how founders can avoid the pitfalls of early venture capital funding. He is honest and candid about the challenges that face a young CEO who is accepting large investments while navigating a new concept in the public eye. After starting his first tech company in 2005, he was forced out of his own company and replaced shortly after he closed their Series-A funding.
Luckily, Veith took the experience as a lesson, and it has not deterred him from pursuing new projects in that he sees great potential. At First Light, he and his team take what he has learned and use it to help founders with unique ideas in complex or highly regulated industries bring their concepts to life. Giving the founders room to focus on growth strategies and funding, First Light builds the technology and all other aspects of the company: business formation, legal, hiring, partnership development, and more. They often take on the roles of an entire C-level team. It’s a service that Austin Veith could have benefited from when he was first getting started.
In addition to his company automating many of the most difficult tasks facing startups, Austin Veith has put together some advice that all founders could benefit from hearing, from finding a mentor to researching the venture capital firms that you’re partnering with. Here’s some of his most sage advice:
- Be prepared to work hard.
“To be very candid, I’ve found that nearly every time I’ve taken a shortcut, it comes back to bite me in the ass. That’s not to say there aren’t ways to work hard ‘smartly,’ but when you have the feeling that you should probably do this or that but choose the easy way, or even worse, choose the lazy way, it ends up taking way more effort than doing it the hard way the first time around,” Austin Veith says.
“Building a company from scratch requires stretches of complete dedication and focus. 12-16 hour days (for months on end), 7-day work weeks, etc. This is just how it is. It’s not easy. It’s also not sustainable for long periods of time, especially if you’re not a founder in your 20s.”
- Find mentors that can guide you.
Working closely with someone who has more experience than you do, especially in your field, can change the trajectory of your career. It’s no secret that mentors can offer support, encouragement, feedback, advice, and help you define and reach your goals. Many professionals credit the relationships with their mentors as instrumental to their rise to success, helping them to get there much more quickly than they could have on their own.
- Research everyone who wants to partner with you.
“The due diligence process is a two-way street. Investors or VCs are not your boss. You are not their subordinate. You are potential partners. You should research potential investors and ask just as many questions about them, their past, their vision, their goals, their team, etc., as they ask about you. Do not hold back, do not hesitate to reach out to other founders of companies in their portfolio, ask to see financials and sources of capital, etc.” he details.
There are multiple benefits to doing this type of research. You will weed out any investors with a poor track record, you will indicate your own commitment to your company and its future, and you’re more likely to end up with investors that are a better fit with your vision.
- Allot a reasonable salary for yourself, the founder.
When Veith recalls his first experience as a founder ending in failure, he attributes many of the issues to his own choice to not accept his budgeted salary to make those resources available to the company and to show investors how committed he was. What he thought of as a noble act instead left him worried about paying his bills and unable to focus fully on the growth of his company.
“A lot of first-time founders, myself included, have operated under the assumption that early investors do not want their money going towards founder salaries. It’s easy to see how founders may believe it shows their commitment to the company or how much they believe in its future success. The reality is most experienced early-stage or angel investors will be totally OK with you taking a reasonable salary. Nothing crazy, but enough that your needs are met, and you are able to focus 100% on building the company.”
Although Austin Veith is still at the helm of a startup, his work with First Light is very different from his first large-scale tech companies. With his more focused approach and years of experience under his belt, he has been able to avoid the mistakes he made early on in his career. He hopes other founders will heed his hard-earned advice and avoid messy embarrassments that can be hard to rebound from.