Entrepreneur Office Hours - Issue #134
Lesson's from a child's lemonade stand
If you’ve been reading my articles for a while, you know I love when children (usually mine) help me see the entrepreneurial world in new ways. Well… it happened again. I bumped into a group of kids in my neighborhood running a lemonade stand, and I definitely got more out of my $4 cup of lemonade than I’d expected (or they’d intended). Specifically, I came away with a valuable new insight about fundraising.
SI figured all of you would benefit from that insight, too, so I’ve shared it in this issue’s first article. I’ve also got another article I think you’ll enjoy if you’re looking for more fundraising advice. It’s about how (and why) to fundraise if you’re a pre-revenue startup.
Once you’re done with those, you can check out this issue’s Q&A where I answer a question about whether or not it’s a good idea to hire people with law degrees for your startup. (Not lawyers… just people with law degrees.) You may not have had to deal with this, but I’ve run into it a few times. It’s a surprisingly interesting question and somewhat difficult to deal with.
Does anyone else have experience hiring people with legal backgrounds? Were they good or bad? I’m curious to know what the community thinks about whether or not lawyers make good startup employees.
Your Startup’s Fundraising Pitch Is too Childish
When a group of neighborhood kids asked me to invest in their lemonade stand, it reminded me of the problems with how inexperienced entrepreneurs usually ask for investment.
A Brief Guide to Raising Venture Capital for Pre-Revenue Startups
Yes, some companies raise VC pre-revenue, but just because you can raise VC pre-revenue doesn't mean you should. How do you know whether your startup is one of them?
Office Hours Q&A
Loved your answer about finding a good law firm in the last issue.
What’s your take on hiring lawyers to work for you? Not hiring in a legal capacity, but I feel like I’ve had lots of people with law degrees applying for jobs.
Do they make good startup employees? Why or why not?
I’ve actually had lots of people with law degrees apply for jobs over the years. I’ve hired a few, too. I should probably avoid making too many broad generalizations about “hiring lawyers” because, as I mentioned in my previous post, they exist on a bell curve. Some are great, some are terrible, and most are in between. Because of this, I want to be careful about definitely stating whether or not lawyers, in general, are good or bad startup employees.
Instead, when thinking about hiring someone with a legal background, you should be careful to consider what their training taught them. Law school teaches a very specific set of skills and knowledge. It’s not, generally, startup-related knowledge, but that doesn’t make it bad knowledge. However, in the startup world, it can be a bit tricky to deal with.
Two particular types of lawyer-specific skills come to mind as problematic.
The first is risk tolerance. In general, lawyers (in a professional capacity) are not very risk tolerant. And why would they be? They’re trained to understand laws and all the ramifications of not following laws. Imagine if you spent three years studying lots of rules and the consequences for breaking them. You probably wouldn’t be eager to experiment or push boundaries, either.
As you can probably imagine, this lack of willingness to experiment can be problematic in the startup industry where experimentation is a huge part of the work. Mind you, I’m not saying you should be actively trying to break laws. I’m just noting that lots of startups operate in legal gray areas or without the kinds of legal protections in place that larger, more established companies have. This might seem fine to you, the founder, but a lawyer might not be as excited for things like “handshake deals.”
The second major problem I’ve had with hiring lawyers is they tend to be very bad writers. Or, rather, they produce a type of writing that’s not ideal for clear and concise communication.
Again, why would we expect otherwise? Legal writing is a highly specialized skill designed to simultaneously produce a certain amount of specificity and vagueness. (If you’ve ever read a contract, you know exactly what I mean by this.) This type of writing isn’t inherently good or bad, but it can be problematic for startups where clear, concise communication is critical. Because of this, if you’re considering hiring a lawyer, make sure the person can write in ways you and your team will be able to understand and act on.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!