First Light Founder and TechStars Alumni Austin Veith Reveals his Biggest Mistakes Made in Business
By Space Coast Daily // August 25, 2022
As the founder of multiple companies over the past 20+ years, Austin Veith knows a thing or two about making mistakes in business. Despite his successes, he is quick to admit that he has experienced failures as well – sometimes on a grand scale. But Veith is determined to learn from his mistakes and is happy to give advice to other founders so that they can avoid the same pitfalls.
Austin Veith himself is open and honest; he gives well-thought-out answers to the questions posed to him, and he doesn’t sugarcoat his experiences. He began his entrepreneurial career early in life, pinpointing opportunities that he couldn’t pass up.
After finding success in college with a transport company providing tours for college students, he later opened a tanning salon near the University of Colorado in Boulder. He then recognized the global potential of technology companies, and in 2005 founded his first tech company, TravelFli.
TravelFl later became UsingMiles, but poor business decisions led to Austin Veith being removed as CEO of his own company shortly after closing their Series-A. Austin Veith takes full responsibility for his managerial failures, but learned two important lessons from the experience: the guidance of mentors is invaluable, and you should always research the venture capital companies that you’re partnering with.
Armed with this new knowledge, Austin Veith delved back into entrepreneurship in 2009, with UsedTunes. Much like UsingMiles, UsedTunes required partnerships with some of the largest companies in the world. Austin Veith noticed a pattern and recognized that he seemed to be attracted to projects that involved building digital marketplaces in highly regulated industries – a very difficult niche to break into.
Now, Austin Veith runs First Light, a small-scale startup factory, helping founders who have unique ideas in complex or highly regulated industries. First Light not only builds the technology but also helps build the whole company, handling everything from business formation and legal, to hiring and partnership development.
First Light has continued to find success as a development and consulting firm. Through this work, Austin Veith is able to convey what he’s learned to other founders of startups, admitting that if he were to start again, he would do things very differently:
“First, I would search for more mentors. Hopefully, I would have found one that would have shown me that my youthful overconfidence was a weakness and did not in fact give me the appearance of strength that I thought it did. Second, I would listen more and talk less. Third, I would always get a second or even third opinion on major business decisions from people outside of the company, especially when it came to legal opinions from attorneys. Fourth, I would pay myself,” he says. Another recommendation from Austin Veith is to “Take contemporaneous notes on everything. This has saved me dozens of times when disputes inevitably arise.”
Elaborating on his mistake of not paying himself a salary as a first-time founder, Austin Veith says, “I don’t think people talk enough about founder salary. I’ve become a big believer that as a founder, you MUST pay yourself.
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 so that your needs are met and you are not making business decisions from a place of financial insecurity.
Not taking a salary and putting yourself in a difficult financial position isn’t some kind of noble act. In fact, unless you are already wealthy or have other means to pay your bills, it is just flat-out dumb to not pay yourself. It may even deter smart investors because if you are stressed about paying your mortgage or making your car payment, you will not be in the right headspace to be making the best decisions for the company.”
He is also adamant about researching venture capital firms to partner with: “The due diligence process is a two-way street. Investors or VCs are not your bosses. 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., etc.
There are multiple benefits to running diligence on investors. First, it will weed out the imposters, especially at the angel level. Second, sophisticated investors will hopefully gain confidence that you are the kind of founder who does the WORK. Third, your chances of finding investors that are the best possible match for your company and your goals, go way up.”
Austin Veith continues to learn from his past mistakes, sometimes forgoing partnerships and funding opportunities that while appealing, aren’t the right fit for his company. He has developed the skill of gently parting ways so that bridges aren’t burned and the door is open for referrals and future business deals.
Although Austin Veith is confident he has made more than his share of mistakes in business in during his time with TechStars, his successes prove that those mistakes were just stepping stones on the path to greater things. Not repeating past mistakes could be considered one of his greatest success stories.
Learn more about TechStars alumni Austin Veith in this recent article.