Daily Archives: June 5, 2012

John Gapper

The dismal performance of Facebook’s initial public offering, after several years in which it was expected to crown the emergence on public markets of social networks, is bound to dampen the mood in Silicon Valley.

Paul Graham, who runs Y Combinator, a start-up incubator, says the effect will be what you might expect – early-stage valuations will suffer. His email to portfolio companies, obtained by Business Insider, contains this warning:

“If you haven’t raised money yet, lower your expectations for fundraising. How much should you lower them? We don’t know yet how hard it will be to raise money or what will happen to valuations for those who do. Which means it’s more important than ever to be flexible about the valuation you expect and the amount you want to raise (which, odd as it may seem, are connected). First talk to investors about whether they want to invest at all, then negotiate price.”

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Of the many career appraisals I’ve perpetrated on team members, two stand out. In one, I spent so long probing the weaknesses of a star performer they eventually asked: “Was there anything good about my performance last year?” In the other, I added a colleague’s lofty goal to the box on the form labelled “career aspiration”, only to be told by my own manager to go back and inform my team member that the dream was way beyond their reach.