Snapchat’s young founder also had advice for budding entrepreneurs about accepting capital and the nuances of working with venture capitalists. A number of the questions focused on Snapchat’s early days, including about the first financing round.
Spiegel advised to never accept if someone says terms are “standard,” and described a right of first refusal term in the Snapchat convertible note seed round of requiring access to 50% or effectively the majority of the Series A round that came the following year.
Spiegel said this kind of term can discourage possible investors who seek to own a larger stake and so may not bid at all. This and other terms were unwound over time, he said. “The big, simple takeaway is anytime you hear ‘standard terms,’ keep asking why, and why, and why, and why,” he said.
Asked about the difference between entrepreneurship in college compared to after college, Spiegel cited the need to balance but ultimately needing to make a choice to go for building a meaningful company.
“I think some point as early as sophomore year my classes started taking a hit because I was working on projects all the time, but if you’re ok with getting bad grades, then it doesn’t really matter,” Spiegel said.
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