Só fundadores de série com conhecimento forte de domínio, e tração obtém financiamento rapidamente. Para a maioria dos fundadores, levantando uma rodada de investimento sede é muito mais trabalho, mas há um método para a loucura.
Muitas vezes escrevo aqui sobre o levantamento de capital. Capital permite que as startups possam ir mais rápido e gerar crescimento. No entanto, o aumento de capital não é simples, pelo menos para a maioria dos fundadores.
Vamos começar com o que é provavelmente o pior cenário – você é um fundador que esta sozinho, logo após a faculdade, com uma ideia em um espaço onde você não tem nada experiência. Ou seja, você não tem equipe, nem produto, nem tração, nenhuma experiência em geral, e nenhuma experiência nesse espaço especificamente.
Este caso extremo ilustra as razões pelas quais os investidores estão céticos – esta é uma situação de investimento muito arriscada. Ou seja, você pode ser brilhante, e você pode construir um negócio massivamente incrível, MAS esta claro que e uma aposta muito arriscada.
Investidores, particularmente os investidores anjo, procuram maneiras de reduzir o risco quando eles estão investindo em uma empresa. É por isso que os fundadores, que se financiam mais rápido são os que reduzem o RISCO DE INVESTIMENTO.
Abaixo discutimos os perfis dos fundadores que os investidores gravitam no seu entorno e tendem a investir em.
1. Fundadores de série
Você já sabe disso, mas vou dizer de qualquer maneira. O mundo não é justo.
Fundadores de série que já foram bem sucedidos são MUITO MAIS PROPENSOS a obter financiamento.
Eu já conheci muitos investidores que simplesmente não investem em fundadores que estão fazendo um negocio pela primeira vez. Eles não são pessoas más. Não é apenas uma parte da sua estratégia de investimento.
Quando esses investidores conseguem dinheiro do seus LPs (parceiros limitados, ou seja, investidores que dão dinheiro aos investidores), prometendo-lhes em seus decks que vão se concentrar apenas em empreendedores de serie. Isso não é diferente de um investidor dizendo que só vai se concentrar em cuidados de saúde ou que eles só vão investir em empresas de NYC. É uma estratégia de investimento, e como eu pessoalmente não acredito em investimento dessa forma, eu reconheço que é uma estratégia perfeitamente legítima.
Investir em fundadores de série com expertise de domínio faz sentido.
Em primeiro lugar, fundadores de série evitam cometer erros bobos em praticamente qualquer aspecto do negócio que os fundadores pela primeira vez fazem. Fundadores de série sabem intuitivamente o que não devem de fazer.
Eles sabem o que NÃO vai funcionar. Por causa disso, eles tendem a executar melhor, crescer empresas mais inteligentes, e obter um rendimento mais rápido. Nem sempre, mas essa é a percepção dos investidores.
2. Fundadores com o conhecimento de domínio
Quando você está começando um negócio em um espaço que você não sabe muito sobre isso, você está em uma desvantagem MASSIVA.
Pense nisso, quando você não sabe algo, você tem que estudá-lo. Para coisas como a física ou a assuntos internacionais, você vai para a faculdade. Você leva anos para aprender, e você tem que pagar para a sua aprendizagem.
Quando você começa um negócio em um espaço que você não estão familiarizado com, os investidores sentem que eles estão te pagando para você aprender o negócio. Isto é, você não está executando imediatamente, primeiro você está aprendendo.
Os investidores não são a sua mãe e seu pai; eles não querem pagar pela sua educação.
Os investidores estão atraídos a fundadores com o conhecimento de domínio. Investidores falam sobre o chamado ajuste fundador-mercado.
Por que esses fundadores estão fazendo este negócio? A resposta que os investidores estão procurando é – os fundadores conhecem muito bem o espaço e identificaram uma oportunidade. Os fundadores sabem que há uma oportunidade com base em seu bom conhecimento de domínio e anos de experiência no espaço.
3. Fundadores com tração
Enquanto seu negócio é apenas uma ideia, os investidores vão achar um 1 milhão de razões pelas quais ele não vai funcionar. Mas se você continua crescendo semana a semana, mês a mês, e crescer seu rendimento e clientes, eventualmente, todas as objeções irão embora.
Os investidores não podem resistir o crescimento de financiamento. Os investidores não podem resistir a tração financeira.
Crescimento e tração são indicadores de um ajuste de mercado e produto.
Eles são indicadores de que o negócio está realmente funcionando. Se você fez um startup antes ou se você conhece o espaço ou não, já não importa. Crescimento e tração significa que você descobriu o segredo e está funcionando, por isso os investidores querem ir a bordo.
4. Fundadores com a experiência e network
Se você não é um fundador de série e não tem uma tonelada de experiência de domínio ou tração, você ainda pode obter financiamento, mas é MUITO MAIS DIFÍCIL.
Há um padrão na indústria, onde fundadores que saem de empresas de tecnologia como Google e Facebook obtém financiamento. Se você passou anos e se provou em um papel de produto ou de engenharia em uma dessas empresas Top Tech, os potenciais investidores tendem a te levar mais a sério.
Isso é porque você provavelmente vem recomendado de uma forte rede de ex-alunos desses lugares que podem atestar sobre você e apresentá-lo aos investidores. Por exemplo, você trabalhou com um dos fundadores cuja empresa foi adquirida. Quando essa pessoa te apresenta aos seus investidores, os investidores estarão prestando atenção.
De certa forma, essa dinâmica não é muito diferente de se formar de uma escola de nível superior. Você se inclina em uma forte rede e alavanca as suas conexões para obter uma introdução aos investidores.
5. Orientados pela missão, Founders intelectualmente honestos
Alguns fundadores claramente destacam do resto. Você pode perceber o quão fixados eles são. Estes fundadores não vão embora e não vão desistir, não importa o quê. Os investidores muitas vezes se referem a esses fundadores como Conduzido pela missão.
Além de ser orientados pela missão, estes fundadores estão profundamente autoconscientes e intelectualmente honestos. Eles são socráticos e introspectivos.
Fundadores orientados a sua missão estão em uma viagem de descoberta. Eles têm um norte verdadeiro, mas são flexíveis sobre o caminho específico que manda eles lá.
Eles irradiam poder e grandiosidade, e fora que possam ser jovens e inexperientes e precoces, eles conseguem convencer os investidores com sua mistura de entusiasmo e conhecimento. Fundadores orientados com a missão tem energia contagiante que atrai investidores. Os investidores decidem lançar os dados juntamente com estes fundadores.
Ao levantar capital, pensa sobre os tipos de fundadores que tendem a obter financiamento. Qual desses fundadores é você?
Este blog foi traduzido por @SamyRusso
Este post foi traduzido por @SamyRusso
A chance favorece as mentes preparadas’ – Louis Pasteur
Um dos objetivos das companhias passando por Techstars e outras aceleradoras e assegurar financiamento. A maioria das companhias vem com o foco de acelera o seu negocio e depois assegurar capital para continua a acelera o crescimento. Como o acionista comum na empresa, Techstars está completamente alinhada com estes objetivos.
A realidade é que a maioria dos startups precisam de conseguir o financiamento para crescer e se tornar empresas reais. Não é típico que você ou a sua aceleradora podem ganhar dinheiro se você não consegui recursos, e certamente muito improvável que alguém possa ganhar dinheiro se a sua empresa não cresce.
Então, nós o amamos quando as empresas conseguem financiamento.
Mas nós já vimos um padrão claro com as empresas que se apressam em conseguir financiamento muito cedo – eles realmente têm mais dificuldade em fechar o financiamento. Por quê? Aqui estão os 9 pegadinhas de investimento seed que vai ajudar você a entender o que está errado.
Falta de Preparação
Para estar pronto para conseguir recursos, você precisa ter um bom conhecimento do problema que você está resolvendo – por que você começou este negócio; o ecossistema do seu negócio – clientes, oportunidades de mercado, a concorrência, ir ao mercado, canais de distribuição, preços, e muitas outras coisas. Vão te fazer muitas perguntas e, em seguida, alguns dos potenciais investidores. Se você não estiver preparado vai entrar e vai ser um grande turn-off.
Falta de tração
Muito poucas empresas obtem financiamento seed sem algum tipo de tração. A menos que você seja parte de uma equipe de empreendedores de série e, mesmo assim, os investidores esperam que vocês tenham tração do cliente / usuário. Isso não significa que você tenha ajuste perfeito do mercado do produto. Isso significa que tem primeiros indícios de que existe um problema e sua solução / produto vai ter uma chance de abordá-lo.
Sendo puxado para dentro do Fundraising
Então você não estava pensando em levantar dinheiro, mas você se encontrou com um grupo de investidores, e eles disseram que você realmente deve fazer. Outros fundadores do seu entorno te disseram que você deve fazê-lo também. Você, então, decidi em dar-lhe um tiro. É um erro. Você não está pronto – você não se preparo, você não planejou isso. Não levante recursos no relvado e no tempo de outras pessoas. Controla o seu destino através da preparação, marcando as caixas e, em seguida, indo e levantando dinheiro. Ninguém está indo embora, e os investidores não vão dizer não a uma reunião com você mais tarde, se você disse não a eles quando você não estava pronto.
Perseguindo as pessoas erradas
Este é um grande problema, e isso é ruim. Todos os investidores são diferentes. Eles gostam de diferentes setores. Eles escrevem cheques de diferentes tamanhos. Só porque eles são investidores não significa que eles são tem que se o investidor certo para você. Fazendo uma pesquisa, entendendo o que um determinado investidor gosta e por que você pode ser um candidato é importante. É igualmente importante obter uma introdução de alguém que você conhece e que também conheça o investidor.
Não fazendo um bom pitch para Angels e VCs
Angel investidores, micro VCs e VCs são todos muito diferentes em termos de seus objetivos e estilos e, consequentemente, como eles precisam ser abordados e como fazer o pitch. Um investidor Angel que escreve cheques de 25K-50K pode querer um par de reuniões e um micro VC que escreve cheques 100K-250K estará envolvido por um mês e podem ou não investir. VCs demoram mais, eles escrevem os cheques maiores, e gostam de lead rounds e tomar lugares no conselho. Se você não entende como envolver cada categoria de investidores corretamente, você vai perder tempo e pode não obter o resultado desejado.
Não tendo uma estratégia global
Mesmo que você saiba que você está indo atrás de que e porque, você ainda precisa de uma estratégia. Uma estratégia implicaria planejar todo o processo de captação de recursos, com quem se reunir primeiro, e com quem se reunir mais tarde. Você começa por levantar alguns quantos milhares de anjos, ou você vai direto para VCs? Tomando as decisões certas sobre a sua estratégia de financiamento, especialmente se você é um fundador fazendo isso pela primeira vez, é realmente importante. Não tendo uma estratégia aumenta a chance de não captar o capital que você precisa para crescer o seu negócio.
O problema “Eu sou especial”
Mas é claro que você é! Eu também. Quando você vai a um cassino e joga, você pensa – todos esses otários em torno de mim, eles vão perder, mas eu? Não não. Eu sou um vencedor. E isso é triste, porque como empreendedor você realmente é especial. Todos nós somos essa raça corajosa, incansável, louca, e imparável. Mas a realidade é que não é uma boa aposta para fazer quando se trata de financiamento seed. Você estará melhor estando preparado e ganhando por causa disso.
Não percebendo que você está em uma corrida
Quando você está de captando recurso, a palavra viaja ao redor. Os investidores são pessoas, e eles falam. Não porque eles são ruins ou contra você. É natural comparar as notas em qualquer indústria, e VCs não são a exceção. Quando você está indo captar recursos, você precisa fazê-lo rapidamente e manter todas as conversas alinhadas. Uma vez que você começar captar, você tem que correr a corrida até que esteja concluído ou você decida parar, porque simplesmente não está dando certo. Perceber que esta é a corrida antes de entrar.
Ficando sem balas
Pode ser uma analogia engraçada, mas faz sentido. No início do processo, você tem uma arma carregada e você começa a disparar tiros e ter todas essas grandes conversas. Em algum momento, especialmente em um ecossistema menor, você percebi que você já conversou com praticamente todos. Não há ninguém faltando. Você disparou todos os seus tiros, e sua arma está agora vazia.
A má notícia é que se você já se reuniu com todos os investidores, e eles não lhe escreverão um cheque, então você não pode voltar a eles no próximo mês e tentar de novo. A boa notícia é que se você volta a eles em 6 meses, e mostra o progresso, e o seu, desta vez, você receberá o cheque. Demora algum tempo para recarregar a arma, e as únicas balas permitidas na recarga são as balas de tração reais.
Como e quando conseguir financiamento
Então como você realmente ganha isso e obtém financiamento? Duas coisas – preparação e tração. Tenha todas as suas coisas em ordem. Sua plataforma, o seu pitch, a sua estratégia de financiamento, com quem que você está indo falar e por porque, consiga as introduções, etc. Esteja preparado.
Mas mesmo se você estiver preparado, pode não ser suficiente neste dia e idade. Vemos cada vez menos pessoas financiando ideias e plataformas. Os investidores querem ver tração cedo. Algum tipo de indicação de que não só é a sua ideia muito boa, mas que você conversou com os clientes, construiu o MVP, e ter algum tipo de tração – prova de que você pode fazê-lo e ele pode funcionar.
E se você acha que é muito difícil e complicado, peça ajuda! Converse com colegas empreendedores que fizeram isso antes. Aplique a TechStars e nós podemos ajudá-lo a acelerar o seu negócio e conseguir o financiamento. Realmente pensa muito bem do financiamento. Se prepara. Seja atencioso. Ganhe.
Last week we wrote about questions that investors ask founders during investor meetings. This week we are reversing the table and talking about questions that founders need to ask investors.
Most founders spend little time asking investors questions, and that’s too bad. Good investors love it when you ask them questions, because it shows that you are thoughtful and don’t think of them as just a walking wallet.
By asking the right questions, you can avoid happy ears, avoid a MAYBE, and really qualify investors in your funnel. By asking questions and getting clear answers, you minimize the chance of wasting your time with investors who will not invest.
1. Are you interested in potentially investing in my company, and if so, what are the next steps?
No first meeting should end without you asking this question. Be direct. Do not be shy. Whether you are meeting an Angel investor or a VC, ask this question before you end the meeting. Every investor by the end of the meeting will make up his/her mind.
They will not decide to invest, that basically never happens or happens very rarely. Most likely though, the investor will decide to pass, because most investors pass on most companies. And some investors will want to continue the conversation.
By asking this simple and direct question, you will know exactly where you stand. If the investor indicates interest in continuing the conversation, then ask about the next steps. Listen carefully to what the investor is saying.
For example, if the investor says keep me posted, or I am traveling the next few weeks or I have a lot of things I am working on – this is known as a soft NO or definitely not now. When an investor is vague, assume he / she is not interested.
On the other hand, if the investor proposes to set up a follow up meeting or a call in the next week or so, this means there is interest. Listen carefully to what the next steps are and decide if the interest is real.
2. What is your investment process, and how long does it take?
If the investor is interested in taking the next steps, you need to ask about the whole investment process. The process will vary widely depending on the type of investor.
Let’s start with an individual angel investor. Most likely, the process will be 2-3 meetings and some diligence and reference calls. It is pretty light, and depending on the check size and where you are in your round, it is totally fine to ask to commit in the end of the second meeting.
Some angels like to co-invest with others, and that often prolongs the process. If others are involved, this means more pitching and more coordination between the group or a syndicate. Ask how long will this take, what will be total check size and actively manage this process. Often times, co-investors will drag the process and the initial angel may change her mind about investing.
Similarly, angel groups have a clear process that is typically not fast and involves multiple meetings and diligence calls.
Typically, a formal angel group will assign a team of angels to an investment committee for each deal. You will need to meet with them at least a few times and then, if things go well, present to the entire angel group. After that, there maybe more diligence.
The process for Micro VC and VC firms varies, but in general takes 3-4 meetings to get a positive decision. Every firm meets regularly to evaluate the deal flow. When you hear that you will be talked about during the partner meeting this week, in general, this a positive thing, but be ready for a quick NO coming out of that meeting.
If the VC is engaged, you should be meeting with more and more partners in the firm as the process unfolds. For larger checks, you will be invited to present at a partner meeting. That would be a critical meeting for a YES decision. If a firm has a seed program and writes smaller checks, then you might be able to get a positive answer without presenting to the entire partnership. Read 8 Things You Need to Know about Raising Venture Capital for more details about raising from VC.
3. What is your check size?
Another important question to ask is the check size, because you want to know your result in case you are successful. Knowing the check size helps influence the timeline and, frankly, the effort you put into this particular pitch. For example, if you are raising a $1MM round you can’t spend a ton of time with people who write $25K checks. You simply won’t be able to get to the finish line if you focus on those.
What you are looking for is to start your round with smaller checks, but quickly move to bigger ones as you have more and more committed. For $1MM round for example, you want to spend most of your time on $50K, $100K and hopefully get one check of $250K or more.
Oftentimes you will hear a range. An angel can say I invest $25K-$200K, or a VC invests anywhere from $300K to $5MM.
Ranges, in general, aren’t great because they lack clarity. There may be complexity or another message behind them. For example, an angel who says $25K-$200K may only invest $25K personally and then syndicate out the rest. The syndicate may or may not come through, so you can’t count on that money.
Similarly, when a VC names a range, it might actually mean that they do seed exceptionally rarely. If you dig in, you will find out that the only $500K check the VC wrote was for a serial founder they knew from before and that their minimum is $2MM for other investments. This is important to understand, because if you are raising $1MM they aren’t the right investor for you for now.
4. How many more investments are you planning to make this year?
Surprisingly for founders, not all investors may be actively investing. Even more surprisingly, they would still take meetings to learn about the company. Angel Investors may be out of cash and tell you they aren’t liquid. Or they could plan for, say 6 investments per year and already did 5. In that case they would be much harder to get the check from.
Number of investments per year is called pacing, and the disciplined investors pay a lot of attention to it because they want to be investing continuously through the year. For example, if a VC has a seed program, and you are talking to them in October, and they decided to fund 10 deals a year and they already funded all 10, there are no more checks left. With this information, the founder should reduce the chance of being funded by this firm to basically 0.
Another, much more subtle issue with VC would be capacity. Some partners just don’t have the bandwidth to take on any more investments. In that case, they would still meet with the founders, but they just can’t invest. Asking about ability to invest upfront saves a lot of time.
5. Who else needs to be involved to make the decision to invest?
ABC in sales is to find a champion and to find who can cut the check. Similarly with fundraising, when you are dealing with angel groups and venture firms, it is important to understand who will be involved in making the decision.
Some angels tell you that they co-invest with friends. This can be both a good thing or a bad thing. The good is that there may be more capital available if you succeed, the bad is that the decision is distributed. Be sure to meet everyone who is involved in making a decision, don’t let other people present the business on your behalf.
Similar with VC firms, understanding the process of decision making is important. In most VC firms, associates will not be able to make a decision without involving a partner. Which partner is making a decision? Can you meet them? Again, making sure that you meet with the decision maker is critical on the path to getting a YES. Another way to think about this is that if you don’t meet the partner, it is basically a NO.
6. What is the last company backed, and why?
This is a simple but relevant question. You are testing for how quickly the answer comes, how enthusiastic the investor is and when was the investment made.
It can be quite telling one way or another. Has it been a really long time since last investment? If so, what does it mean? Is it that the investor has a high bar or is it that they don’t have capital left to invest this year? Ask about the number of planned investments question and you will have the answer.
You also want to hear the WHY. What made the investor write the check? Was it an amazing founder, vision, market, etc? Listen carefully to the answer, as it should be helpful to figure out what the investor will look for in your startup.
7. Have you invested in a competitor, or evaluating investing in one?
You should ask this question 100 percent of the time, because unfortunately, some investors will not tell you this unless you ask.
If an investor invested in a competitor, even if it is not a super close competitor, the chance of you getting a check from them is close to 0. It really is 0. VCs don’t invest in competitors, and angels avoid doing it too. The reason is that it is hard to help both companies, since they are competing. It is essentially a conflict of interest.
Evaluating investing in a competitor is much more subtle. It is typical that when a venture firm is planning to make an investment in the space, they do a lot of digging and research. Part of the research is that they would reach out to all competitors and try to get more information. A VC is trying to do its best to pick the best company in the space.
You may get a call from an associate of a firm saying that the firm is interested in the space and wants to talk. You will be asked a lot of questions, and at times, even move through the process only to find out in the end that it was a so-called “brain suck”.
This may seem very unfair to the founders, but it is the reality of what’s happening in the market. To avoid wasting time and getting hurt, ask about competitive investments or research upfront.
8. What are your concerns about our business?
This is a great question that Steve Schlafman from RRE ventures suggested founders ask.
Why wouldn’t you invest in my company? How do you see the risk here? What do you think won’t work / I am doing wrong?
By asking this question directly, you are accomplishing several things. First, you are signaling that you are open to feedback and value it. Secondly, that you respect the opinion of this investor.
More importantly, you are likely getting valuable information, a perspective of an investor who sees dozens and hundreds of companies per month.
The concerns will range from market size, to acquisition channels, to competition and pricing. Having this information can help you work through the concerns and address them during the investment process.
9. What is your follow on strategy?
Some investors follow on. i.e. put more money into the companies, and some don’t. Both strategies are perfectly fine, but it pays off to know.
Specifically, if you are raising money from angels, say $1MM round, and most of your backers do not follow on, this means that you may have a hard time raising a second seed. Most companies need more capital before they get to series A, and most of this capital comes from insiders – investors who already invested. If most of your insiders don’t follow on, you will need to go outside to raise more capital. This can be tricky, especially when you are post seed and before series A.
With VC firms, the dynamic is different. Some VC firms deploy a smaller amount of capital at the seed stage with the idea of leading series A. The follow on strategy is to lead series A. However, there is a potential issue that founders need to be aware of – IF the firm decides to not lead series A, there may be a signaling issue to the rest of the market. It pays off to connect with other founders that the firm backed to get the color on this dynamic.
10. How do you help companies you back?
Many investors talk about being a value add in addition to $. Ask how exactly does this particular investor help and ask for specific examples involving companies the investor backed.
Some investors come with a massive network. Some larger VC firms will help you recruit and scale. Some smaller angels are great at pricing and financial modeling. Some investors really understand distribution.
Whatever it is, investors like being asked this question and it is helpful for the founders to know.
11. Who are some of the founders you backed that I can talk to?
Much like how investors reference check founders, the founders should reference check investors. Ask for 2-3 founders that this investor has worked with.
You don’t necessarily need to connect with them after your firm’s meeting with the investor, but it is a good question to ask and see what the answer is.
Great investors will have raving references from the founders they supported and less than great investors will be reluctant to name names.
And now we want to hear from you. Founders, please tell us what questions you asked investors during the first meeting that you found helpful.
Applications for the Q1 2017 accelerator programs close October 15. Apply today.
We are delighted to introduce 15 Startups that are finishing our Summer 2016 Program today. As with our previous classes, this was a diverse group of founders solving a wide range of problems.
In addition to 6 teams from NYC, we had teams from Rochester, Atlanta, San Francisco, two teams from Philadelphia, a team from the UK, a team from France and two teams from Canada. Of these 15 companies, five have women CEOs.
The founders have made real progress, and grew their revenues and customers during the program. Here are Techstars NYC Summer 2016 Investor Pitches:
Electronic Gaming Federation organizes and produces college sports.
Forestry offers developers a new way to build and manage websites.
Grubbly Farms is producing a sustainable, insect based, food source for pets, aquaculture, and livestock.
Healthie is a web and mobile platform for dietitians and nutritionists to manage their practice.
IOPipe provides a toolbox for developing, monitoring, and operating serverless applications.
Leblum lets consumers buy top quality flowers directly from the growers.
MindMate is a platform for Alzheimer’s patients, families and care centers.
MyFin is the easiest way to manage and save your money.
OnFrontiers is a platform that helps businesses connect with experts around the world.
Patch Homes provides home equity financing at 0% interest and no monthly payments.
Pollen is a marketing automation platform that enables online retailers to acquire new users more simply and cost effectively than Facebook and Google.
ProcessOut is the smart router for payments that saves money by optimizing each transaction.
Purple is the easiest way to stay on top of the news and be informed. Ever.
Skopenow is a people search engine for discovering fraud and evaluating risk.
Skywatch provides API access to the world’s satellite data.
Thank you Mentors and Speakers
As always, we’ve had an amazing support from our mentors. They spent the time with the founders, gave feedback and engaged during the program.
Here is the thank you video that founders made for mentors:
We also had an amazing group of mentors who held weekly office hours, and focused on covering specific verticals.
Every week during the all hands companies did shout outs and thanked most helpful mentors. We are excited to present Most Helpful Mentor Awards for Summer 2016 Program:
Most Helpful Overall Mentors award for Techstars Summer 2016 goes to Kevin King, Dane Atkinson, Chris Fraser, Soraya Dorabi and Maya Baratz Jordan!
We also had amazing speakers who came to share their stories, and give founders feedback on their companies. Fireside chats were fun, insightful and really engaging.
What Founders Learned in the Program
Tyler Schrodt, CEO of EGF:
Take the advice of your mentors seriously, but your path is ultimately your choice.
Fundraising is a full time job.
Scott Gallant, CEO of Forestry:
The importance of building a personal network of mentors and peers
How to prepare for fundraising (the best coaching on the planet)
Sean Warner, CEO of Grubbly Farms:
Networking – you always here networking is important, but seeing the outreach that Techstars has taught us how to properly utilize our / Techstars network, mainly looking at mentor engagement.
Defining growth through KPIs – there are many ways to monitor growth and though qualitative measurements are important, quantitative measurements are easier to distinguish growth over time.
Erica Jain, CEO of Healthie:
How to focus on the important stuff: Techstars has a tradition of “big rocks” – the premise being that you can fill your days with lots of activities, but at the end of the day, if you don’t execute on certain things – whether it’s achieving a certain metric or reaching a milestone – the company isn’t actually moving forward, even if you’re “always busy”.
That relationships are everything: Whether it’s with employees, mentors, co-founders, customers, or investors, building strong and genuine connections is ridiculously important, and incredibly rewarding.
Adam Johnson, CEO of IOPipe:
The power of giving first. There’s so much energy and momentum within our class by helping each other out. No requests were unanswered during our time at Techstars. The give first mentality did not end with our class, many alumnus and friends of Techstars went out of their way to help out. It was simply amazing.
I was surprised by how much impact the high energy of all the startups going through the Techstars program had on IOpipe. It was a constant motivator to keep pushing for as much progress and growth as we could within a short amount of time. Our investors have been so impressed by how far we’ve come in a short three months. Techstars definitely played a huge part in that.
Setting weekly big rock milestones to push us harder every week has been a great motivator for us to keep the eye on the ball, and re-think what’s most important for us. IOpipe will continue this exercise long after our time at Techstars.
Sarah Corrigan, CEO of LeBlum:
Don’t abuse the Pivot. Intuition and data combined are sufficient guides and indicators of whether or not your company has a reason to exist. Consider peoples’ doubts, but never cater to them.
Accept Criticism Gracefully. A start-up starts out scrappy but eventually has to evolve into a well organized operation of systems and standards. As a founder that means that you to have to be willing to accept faults, recognize what needs to improve and be willing to make changes – without delay. So, don’t be a sh!tty human, and if you are being one – stop being a sh!tty human, immediately.
Susanne Mitschke, CEO of MindMate:
Pick ONE KPI and execute ONLY on that
Say “NO” to stuff that doesn’t move the needle! Be hard on that!
Nathaniel Harley, CEO My Fin
Marketing automation – how to think about the different states – activation, magic moment, and retention. Being very early and in product building mode, we really honed in on the activation state…. need to still work on magic moment / retention. I obviously learned this before, but it’s much different for MyFin than it was for Spoon. App is very different than content site.
Prioritization – as a team, we’ve gotten much better at doing daily sprints, focusing on what’s most important, and constantly re-prioritizing based on where we’re at, feedback, etc.
Positioning – one of the hardest things to do is narrow down the focus of the company into a few sentences. It’s been extremely helpful to get down to the essence of what we’re building, and how to articulate to people.
Sahil Gupta, CEO of Patch Homes:
Be firm yet flexible in my approach. Whether is product, market strategy or fundraising – listen to what people are saying.
Become better at using data to validate hypothesis and drive decision making.
Zack Werner, CEO of Pollen:
I have been raising money for a long time, and TS helped me get a MUCH better understanding of how to talk to investors and create a funnel for investment.
It was great for my team to learn how to operate in the same space and with a structure for operation.
Rebecca Harris, CEO of Purple:
How to define KPIs, set goals for growing them, and develop a process for achieving those goals.
I learned so much about fundraising.
Rob Douglas, CEO of Skopenow:
Thinking like a CEO – Growth strategies (sales and business development), pricing, getting ready for scaling, and finding the right hires.
Understanding the VC world – the ins, outs, and in-betweens of VC communication from intros to closings…#ABC
Thank you Associates!
Huge thank you to our associates, they’ve done an amazing job! Sara, Alli, Susan, Jay, Kashif, Dan, Mike and Oliver – massive thank you for your hard work and dedication – you were SUPER HELPFUL to founders and Techstars.
Tweets from Investors and Founders
Good luck, Techstars NYC Summer 2016!
At Techstars, we have a culture of innovation and experimentation. Our strength stems from our diversity and distributed nature. Every Techstars location adds its own local flavor and experiments constantly. We tweak the program content, how we engage mentors and corporate partners, and also how we help our founders connect with investors. We then share what works and what doesn’t to make the network better over time.
No matter if you are going to a program in NY, Boston or Cape Town, you will get the very best Techstars Demo Day experience.
A New Take on an Old Idea
Since early 2007, our Demo Days have consistently attracted hundreds of investors and community members. Demo Days are powerful community celebrations and an effective way to connect the founders and investors. Techstars companies have now raised more than $2.5B and Demo Day has been a huge part of that success.
For the past couple of years, we’ve been experimenting with additional ways we can improve and optimize this connection in addition to Demo Days.
It started back in Boulder in 2014 when Nicole Glaros, then a Managing Director and now Chief Product Officer at Techstars, launched an investor-only Demo Day for active investors.
The idea and the formula was quite simple: investors were split into groups with about 20 investors per room. The CEOs walked from one room to another and gave their Demo Day Pitch. After the pitch, investors did a quick Q&A and the founder moved onto the next room. The investors had contact information for every founder and were able to reach out directly.
This was followed by the traditional Demo Day, which was more of a community celebration, and most of the investors who were at the private event also attended that Demo Day.
An Improved Experience for Everyone Involved
This new format was an instant success. Both investors and founders loved the intimacy of the setting and the ability to interact and ask questions. Over the next few years, other Techstars programs experimented with a version of this setup, including our Seattle and Chicago programs. Jenny Fielding just ran an invite-only investor Demo Day for our FinTech program in NYC.
Our Chicago program recently rented 10 suites in a hotel with eight active investors per room. The only folks who participated were people who wrote checks in a previous class. CEOs did the pitches followed by Q&A. In addition, Chicago added another tweak – investors had five minutes to discuss the company amongst themselves. Once again, investors and founders loved the format.
This year Techstars NYC is building on the experiments from other cities and rolling our own experiment. We are introducing Exclusive Investor Preview and Investor only Demo Day.
The Investor Preview
The Investor Preview is invite-only and takes place before the Demo Day. To get invited, you need to have invested in at least one Techstars NYC company within the last four years. Each investor is pre-matched by us with six companies based on their investment focus. Before the preview, investors get elevator pitches from all companies in the class and can ask to swap out one or more companies. Similarly, founders can opt-out of the meetings with investors whom they don’t want to meet.
During the preview, each investor comes in for 2.5 hours and has six 25 minute meetings. During the first five minutes of the meeting, the investor watches the video of the company pitch and then spends 20 minutes doing Q&A with the CEO. After that, the investor moves onto the next company. When there is a mutual interest to continue, the founder and investor exchange contact information. So far we’ve gotten hugely positive feedback on this format from both investors and the founders.
For the Investor only Demo Day we are trying a new format as well.
The Investor Only Demo Day
Again, the Demo Day is invite-only for investors, but it is not required that you have previously invested in one of our companies. The Demo Day on 9/29 will take place in the Techstars NYC office, where 15 CEOs will have stations much like you would have at a conference. We issued 200 investor tickets for 10 a.m., 200 investor tickets for 11 a.m., 200 investor tickets for noon, etc.
When investors come in, they can quickly connect with each CEO or go to a theater space to watch video pitches. Techstars staff will walk around and help investors quickly send the contact information to all companies they want to follow up with.
We anticipate an amazing turn out this coming Thursday and look forward to everyone’s feedback.
The best companies constantly tweak and iterate. At Techstars, experimentation and improvement are part of our DNA. This is what we tell our founders and this is what we constantly do internally. Not only do we have cool new tweaks this year, we’ve already been thinking about new things that we will be doing in 2017.
Do you have ideas for how we can enhance Demo Days or do anything else better? Please leave a comment here or email me at email@example.com.
We’ve written a lot here about fundraising and how it is a complicated, and at times, confusing process. To fundraise effectively you need to prepare and have a strategy, understand different types of investors, understand how much to raise and create an investor pipeline.
We also talked about a fundraising deck and how you put it together. In addition to the deck, it is helpful to prepare answers to typical questions that investors tend to ask.
Below we discuss the typical questions you will hear from investors and discuss how you might go about answering them.
1. Who are your customers, and what problem are you solving for them?
Investors are looking for a simple and clear answer of who you are selling to. They also are looking to understand how clearly you know the pain point, and how big of a problem it is for the customers.
This question also opens up a conversation about founder-market-fit, as well as helps investors think about the size of the opportunity.
2. What is unique about your solution? What is your unique insight?
Investors want to understand how you are proposing to solve the problem, but more importantly, they are looking if you have unique insight. Has anyone else thought about this before? How is it different from other solutions? Do you have a secret?
Seriously, investors want to know this because the more differentiated you are, the more defensible the business might become in the future.
3. How does your product actually work?
Investors naturally want to see the demo of your product, because a demo is worth 1,000 words. A lot of investors want to fund product-obsessed founders – founders who get lost in details of the product, who are super thoughtful and nerdy about features they built, and really understand customer needs.
Always show your product to investors and make the demo awesome.
4. What are your KPIs? How do you measure growth? How do you know you have product market fit?
What numbers do you use to drive the business? Lack of clarity or hesitation is a major red flag for investors. If you as a founder aren’t clear about your metrics or not measuring the right things, investors won’t believe that you can grow the business.
Investors want to make sure you understand and measure your conversion and sales funnels, activation, retention, magic moment, churn, CAC, LTV, etc. Investors want to know how you think about KPIs, look at your dashboard and understand how you think about growth.
They will likely dig in on how you think about attaining product market fit as well.
5. What is your traction to date?
The question of traction is really two-fold. First, investors are literally asking what is your traction. Second, and more important, how do you define traction?
Many founders mistake progress or effort for traction. On the other hand, investors think of traction as revenue and paying customers or significant growth in weekly and monthly active users.
6. What is the size of this opportunity/total addressable market?
How big is your market – a question that matters to a lot of investors. Why? Because VCs economics force them to only focus on very large markets. VCs look for big markets with lots of money so that when they own 20 percent of your business, they get a meaningful amount to return all or a portion of their fund when you exit. Otherwise, they don’t make money.
In addition, investors expect you to size accessible markets and do the calculation bottom up. Too many founders say they are in $1BN+ markets without realizing that, because of their business model, they can’t be addressed.
Spend time sizing up your actual addressable market using your pricing and growth projections.
7. What are your CAC and LTV?
This is another typical question that investors ask founders during each round of financing to establish how fluent they are in the business.
In the early days, founders are expected to know the terms and have an idea of what the numbers are, but it’s fine to say that you are early, and the numbers are likely to change in the future (typically CAC goes up and LTV goes down).
The cost of user acquisition conversation leads to the conversation about channels, marketing and advertising spend. If you are B2B company with direct sales, you will talk about cost of sales and how it will change at scale.
Life-time value of the customer is equally important. How long does it take to pay back the amount it cost to acquire this customer? How much money will you make on the average customer?
The LTV conversation touches on churn, revenue per customer and enables investors to understand how you think about your whole customer lifecycle.
8. What is your business model?
Naturally, investors want to understand how you make money. They want to know who your customers are and how are you planning to charge them. This question combines not just pricing, but strategy and tactics. If you make money indirectly, via advertising, they would then focus on how your acquire customers.
If you are a marketplace, the conversation turns to whether you are going after supply or demand and the incentives to be on the platform. What will be the expected average revenue per user? Will you have recurring revenue? All these questions get explored when investors ask about your business model.
9. How did you come up with your pricing?
This is probably a less common question in the early stage, but it is an important one. Investors are looking for you to demonstrate that you’ve done customer research and competitor research. They are also looking for you to acknowledge that you are early and the pricing is likely to change.
In addition, if you are currently free or have a free tier, investors will look to understand when are you planning to get rid of it and what the implications will be.
10. What are your unit economics?
Unit economics give essentially an inductive case for your business. For example, for Uber, a unit would be either one ride or one driver, depending on how you model it.
The key thing in unit economics analysis is to capture all associated costs and revenues and then see if you are actually making money. Some startups have poor unit economics initially and say they will optimize costs later.
Many investors, however, are now weary of this approach because as you scale, new challenges and new unforeseen costs may arise.
11. What is your go to market strategy?
The go to market strategy question is a really important one and is often misunderstood. Investors ask this typically when founders say that their product works for everyone. Investors are skeptical, as experience says that focusing on a vertical or a segment is typically better.
For example, if you are building developer tools, you could initially focus on freelancers and individual developers. Then once the product is solid, you can move upstream to mid and large enterprises. Tesla had the opposite strategy. It first made a high end car and has been moving downstream.
You can also focus on a specific vertical. For example, if you are a security software provider, you can first focus on insurance companies or law enforcement agencies. Having a focus narrows down the opportunity but allows you to really perfect the product and sales.
When talking about your go to market, investors are really looking to understand your strategy and why you think it will work.
12. What are your customer acquisition and distribution channels?
How are you planning to acquire customers? In the consumer world, you have paid and unpaid means. You can advertise or you can use content marketing, social channels and word of mouth. Investors want to understand how deeply you understand your channels.
The challenge is that most obvious channels often do not really work or aren’t cost effective. That is when you start your CAC via Google or Facebook ads is just too high. Investors are looking to understand if you figured out a growth hack / have an insight on how to acquire customers quickly and efficiently.
In the B2B world, investors want to know if you have an unfair advantage, like you’ve worked in the space before and have a rich rolodex. They are looking to understand if you are able to secure key partnerships that can help you distribute the product faster and win the market faster.
13. Why now?
This is a question that often goes unasked, but is certainly on the investors mind. Timing is everything, and really understanding why now is the time for your company to win is important. The VC industry is full of examples when something was too early or too late, and as a result, it didn’t work or didn’t get as big.
Before Facebook, there was Friendster, before Google there was Alta Vista. Even Uber wasn’t the first company to think of on demand rides, and AirBnB wasn’t the first company to let people host people in their apartments.
Before the current wave of VR and AI, there were at least 3 other waves. Why do we believe now is different? Why do we believe now it will actually happen? Some argue that we finally have enough cheap computing power and have evolved other key technologies necessary for VR and AI to go mainstream.
When investors are asking “Why Now?”, they are really asking about conditions of the market, context and state of society – dozens of factors that will make a difference between success or failure this time around.
14. Why you? What is YOUR Founder-Market-Fit?
We’ve written here before about the importance of Founder-Market-Fit and how most investors pay close attention to it. Investors don’t want to fund accidental founders. They want to fund people with deep domain expertise, massive vision and passion. Investors want to get to the bottom of why you started the business – do you have unique insight and unfair advantage?
15. Where did you grow up? Where did you go to school and work?
In addition to understanding if you know the space, investors want to understand if you are resilient and smart. The question about where you grew up is really a question about how hard you have had to fight through your life to get to where you are. If you grew up in a well to do family where you didn’t have to struggle, investors may not be as excited about funding you compared to, let’s say, an immigrant.
There are no hard and fast rules of course, but the environment you grow up in often defines your level of resilience. When things get difficult, and they always do, will you walk away? When you get knocked down, will you get back up?
When asked where you went to school, people look to see if you went to a top school, what you studied and what you learned. Sometimes this conversation leads to a common connection. Sometimes it is just a starting point for learning more about you. Investors are looking to assess your level of intellectual curiosity and honesty.
16. How did you meet your co-founders?
This is another interesting question that doesn’t have a clear cut right answer, but is telling to investors. If you say you met at a hackathon 3 months ago, what you are saying is that you don’t really know each other well. Investors may think that the connection between you and your co-founders isn’t solid. If you are saying that you’ve been friends since high school, investors know that you trust each other.
However, they also know that you haven’t worked together. Friends don’t always make the best business partners, and startups have ruined thousands of friendships.
Most likely, investors are looking to hear that you worked together before, ideally in another startup and ideally for a while. This would imply that you get along socially, but more importantly, you can make things together under a stressful environment.
17. Who are your competitors and how are you different?
We’ve written here before how to think about competition. Investors are looking to understand how knowledgable you are about competitors and what is different about you. If you say you don’t have competition or if you bad mouth them, it is a red flag. Simply acknowledge competitors, and highlight what they are doing well. Explain how you are different and why.
18. What is your vision, your true north?
Some founders stumble on this question and this is a red flag for investors, particularly for VCs who want to back founders with big vision. What do you want your company to be in 10 years? This question reveals not only how you think about the business long term, but whether you plan for it to exist a decade or more. If your plan is to sell quick, you won’t have a broad long tem vision.
Similarly, a question about your true north is an important one. It reveals what you aren’t willing to compromise on. Great companies are always flexible on their path, but not flexible on the destination.
19. What milestones will you achieve with this financing?
We touched on this topic in our How Much Capital Should You Raise post. This topic is complex and founders often approach it with a naiveté. A typical answer might be expressed in terms of specific product milestones and scaling of the team. This is not what investors are looking for. They want to understand tangible business milestones you will reach with the capital you are given.
There are really two outcomes investors are looking for – either profitability, which is very rare in early stage startups, or the follow on financing. That is, investors are asking if you get funding and then execute and hit specific milestones, will you be fundable again? For example, if your plan says you raise $1MM, and then grow 20 percent MoM to achieve $40MRR in 12 months, to you this may sound great, but to investors it is clear that it will not be enough to raise a series A.
It makes sense to really think through your milestones and where you want to land and why.
20. How much will you be burning per month?
This is a pretty straightforward question that follows from your financial model. A few things to pay attention too: a) Your HR costs should roughly be 70K-100K per head. b) Investors will look for clarity around advertising spend — in the early days, before strong product market fit you should not me spending a lot of money to acquire customers and c) Investors will look for any outliers, anything that jumps out as out of ordinary or unusual.
21. What will be your MoM growth in customers and revenue?
Another straightforward question based on your financial model. As a startup, you need to make a growth assumption. The trick is that you don’t have a ton of historical data to back it up. Whatever data you do have, include it in the model and explain it, because it helps establish credibility.
Also, avoid cookie-cutter 20 percent MoM year round growth assumption, as it may come across as sloppy. Really think through seasonality and other factors that may influence your growth. Do your customers pay you right away or not? Does your cash in the door trail booked revenue? Reflect all the nuances in the model and your revenue forecast.
22. When will you be profitable?
Historically, many of the best startups have reinvested their revenues into the business and sacrificed profitability in favor of growth. Since the financing market has become tighter, profitability is fashionable again. Becoming profitable is important for many reasons, but the main one is that it allows you to become self sufficient and control your destiny.
When you are profitable, you are no longer in need of external capital in order to survive. Investors are looking to understand how you think about profitability, and tie this to the conversation about your burn and the need for follow on financing.
23. Why is your business defensible?
VCs want to know what happens to your business over time. Assuming you can get a lift off, investors want to know what happens year 5, year 10, etc. Why? Because this is a typical horizon over which more successful startups go public or get acquired for a significant return. Long-term defensibility is difficult to predict. That’s why many investors look for natural monopolies, winner take all markets and businesses with network effects.
This is a complex and important topic that is less likely to be top of mind for the founders, but is certainly something investors are paying a lot of attention to.
24. What is your intellectual property?
If you are startup that is creating a new technology, investors want to know about your IP. Are there things here that can be patented? What is the true innovation in your business? While software patents haven’t been effective in recent years, depending on the type of your business and depending on what kind of investors you are talking to, IP can be an important topic.
25. What is your tech stack?
This question will be particularly relevant for startups that are working in AI, VR, dev tools and other areas that require deep tech. Some investors, particularly technical ones, will want to nerd out with you on your stack.
26. What are the key risks in your business?
This is one of the hardest questions investors will ask you – why might you fail? This question is a probe for a) how do you think about risks in your business b) do you acknowledge risks and c) most importantly, are you self-aware and intellectually honest. Great founders bring up and face risks head on. They don’t try to shove them under the rug and ignore them.
Risks vastly range from building incorrect products, to the market not being there and to key distribution deals falling apart. Whatever it is, be prepared to talk about risks and show that you’ve been deeply thinking about them.
27. Who is the natural acquirer for your business?
Investors aren’t likely to ask you this question, but they will certainly think about it. Investors are putting money into your business to make more money, and historically, since the IPO market is tight, most successful companies are acquired.
Although you have no plan to sell your company, it is good to think about who might bite in the future and why.
28. How much capital did you raise so far and on what terms?
This is a simple question – just tell investors exactly how much you raised, whether you did it on the note or via equity. Don’t stumble or hesitate, because that would be a red flag.
29. Who are your existing investors?
This is another straightforward question.
30. How much capital are you raising and what are the terms?
You should have clarity on how much you are raising based on the financial model. Depending on where you are in the fundraising process, you may not have the terms set yet. If you don’t have the terms set, then just say so – investors will completely understand.
And now please tell us what we missed. Share the questions that investors asked you during your fundraising conversations.
Este artículo fue traducido por Lucía Tróchez – @lulutro
La suerte favorece a las mentes preparadas – Louis Pasteur.
Uno de los objetivos de las compañías que pasan por Techstars y otras aceleradoras es asegurar financiamiento. La mayoría de las compañías entran enfocándose en acelerar sus negocios y luego asegurar capital para continuar con su crecimiento acelerado. Como accionista de la compañía, Techstars está completamente alineado a estos objetivos.
La realidad es que la mayoría de las startups necesitan levantar capital para crecer y convertirse en compañías reales. No es típico que tu o tu aceleradora pueda generar dinero si no haces levantamiento de capital, y ciertamente muy poco probable que nadie genere dinero si tu compañía no crece.
Entonces nos encanta cuando las compañías consiguen inversión.
Pero hemos visto un patrón claro con las compañías que se involucran en inversión desde un comienzo — de hecho, tienen más dificultad cerrando ese financiamiento. ¿Por qué? Aquí ahi 9 razones de inversión semilla que te puede ayudar a entender lo que va mal.
1. Falta de preparación
Para estar listo para levantar capital, necesitas tener un conocimiento profundo del problema que estás resolviendo– por qué empezaste este negocio; tu ecosistema de negocio – tus usuarios, oportunidad de mercado, competencia, mercado potencial, canales de distribución, precios, y muchas otras cosas más. Te van a preguntar muchas preguntas y más de parte de los potenciales inversionistas. Si no estás preparado se va a notar y va a ser malo para tí.
2. Falta de tracción
Muy pocas compañías llegan a buscar inversión semilla con algún tipo de tracción. A no ser que sea un equipo de emprendedores en serie exitosos, y aún así, los inversionistas esperan tracción de usuarios/clientes. Esto no significa un ajuste de mercado/producto perfecto. Significa tener evidencia temprana de que hay un problema y que tu solución / producto tiene un buena posibilidad de resolverlo.
3. Ser atraído hacia levantamiento de capital
Entonces no estabas pensando en levantar dinero, pero conociste un montón de inversionistas, y te dijeron que realmente deberías. Otros fundadores a tu alrededor te dijeron lo mismos. Entonces dices, ‘¿Por qué no?, lo voy a intentar.’ Es un error. No estás listo – no estás preparado, no lo estás planeando. No levantes capital en territorio y tiempo ajenos. Controla tu destino preparándote, revisando cada detalle y saliendo a levantar el capital. Nadie se va a ir, y los inversionistas no te van a decir que no a una reunión más adelante si les dijiste que no cuando no estabas listo.
4. Perseguir a las personas equivocadas
Esta es una de las principales razones, y es mala. Todos los inversionistas son diferentes. A cada uno le gustan verticales específicas. Escriben cheques de diferentes tamaños. Sólamente porque son un inversionista no significa que son el inversionista indicado para ti. Investigar y entender lo que a un inversionista en particular le gusta y por qué tu podrías encajar bien con él es importante. Así como también es importante conseguir una introducción a través de alguien que te conoce a ti y al inversionista.
5. No hacer el Pitch a los ángeles inversionistas y VCs correctamente
Los ángeles inversionistas, micro VCs y VCs son todos diferentes en términos de sus objetivos y estilos y consecuentemente en cómo deberían ser contactados y cómo presentar el pitch. Un ángel inversionista que escribe un cheque de $25K USD- $50K USD puede querer un par de reuniones, y un micro VC que escribe cheques de $100K USD – $250K USD puede estar enganchado por un mes y puede o no liderar. Los VCs se toman más tiempo, escriben los cheques más grandes y les gusta liderar rondas y tomar asientos en la junta de asesores. Si no entiendes cómo enganchar a cada uno correctamente, perderás tu tiempo y puede que no obtengas el resultado que deseas.
6. No tener una estrategia general
Incluso si sabes a quién acercarte y por qué, todavía necesitas una estrategia. Una estrategia que conlleva la planeación del proceso completo de levantamiento de capital, con quién reunirte primero, y con quién después. ¿Empiezas por levantar un par de cien miles de ángeles primero, o vas directo a los VCs? Tomar las decisiones correctas acerca de tu estrategia de financiamiento, especialmente si eres un fundador primerizo, es realmente importante. No tener un plan incrementa tu posibilidad de no levantar el capital que necesitas para crecer tu negocio.
7. El problema de ‘Soy especial’
¡Pero por supuesto que lo eres! Yo también. ¿No lo somos todos? Cuando vas a un casino a jugar, piensas – pobres tontos a mi alrededor, todos van a perder, ¿pero yo? No, no, no. Yo soy un ganador. Y esto es triste por que como emprendedor realmente eres especial. Todos lo somos. Somos esta raza de individuos imparables, locos, con coraje, que no se rinde. Pero la realidad es que no es una buena apuesta cuando se refiere a inversión semilla. Estás mejor cuando estás preparado y vas a ganar por esa misma razón.
8. No darte cuenta que estás corriendo una carrera
Cuando estás haciendo levantamiento de capital, se corre la voz. Los inversionistas son personas, y hablan. No por que son malos o en contra de tí. Es natural comparar notas en cualquier industria y los VCs no son la excepción. Cuando sales a levantar, necesitas hacerlo rápido y tratar de alinear todas las conversaciones. Una vez empiezas, tienes que correr hasta que termines o hasta que decidas detenerte por que simplemente no está funcionando. Dáte cuenta de lo que es esta carrera antes de que empieces a correrla.
9. Acabarte las balas
Puede ser una analogía chistosa, pero tiene sentido. Al principio del proceso, tienes una pistola cargada y empiezas a disparar y tener estas conversaciones maravillosas. Luego, en algún momento, especialmente en un ecosistema más pequeño, encuentras que has hablado con prácticamente todos. Ya no hay nadie. Te acabaste con las balas, y ahora tienes una pistola vacía.
La mala noticia es que si ya te reuniste con todos los inversionistas y ninguno te escribió un cheque, ya no puedes regresar a pedirles dinero el próximo mes para volverlo a intentar. La buena noticia es que de hecho si puedes volver en 6 meses, mostrar tu progreso, y si estás siendo exitoso esta vez, lo más probable es que recibas un cheque, y las únicas balas que necesitas son las que tienen tracción.
Cómo y cuándo levantar capital
¿Entonces cómo ganas y consigues dinero? Dos cosas –preparación y tracción. Organiza tus cosas. Tu presentación, tu pitch, tu estrategia de fondeo, con quién vas a hablar y por qué, consigue las introducciones, etc. Está listo.
Pero aún si estás preparado, puede que no sea suficiente en este tiempo y era. Vemos menos y menos personas fondeando ideas y presentaciones. Los inversionistas quieren ver tracción temprana. Algún tipo de indicación que les diga que tu idea no es solamente buena, sino que también hablaste con clientes, construiste un producto mínimo viable, y tienes algo de tracción – prueba de que lo puedes hacer y puede que funcione.
Y si te parece muy desalentador y complicado, busca ayuda. Habla con amigos emprendedores que lo hayan hecho antes. Aplica a Techstars y te podemos ayudar a acelerar tu negocio y levantar capital. Piensa bien en el financiamiento. Prepárate. Sé considerado. Gana.
Startups are easily overwhelmed with ideas. They have a ton of their own, and they hear a lot of advice from others. How do you actually take all of the ideas and prioritize, focus, execute and grow?
Here is a simple system inspired by Agile software development that can help you do that. It’s a spin on the traditional to-do lists that helps you keep it simple and actually execute.
The key to getting things done is to set goals and divide time into chunks to hit each goal. If you don’t have goals, then you are just doing stuff, but not clearly making progress. Let’s call a chunk of time to hit a set of goals an “iteration.” The duration of any given iteration can vary – it can be 1 day or 2 weeks, but not much longer than that. At Techstars, for example, we measure time in weeks, since we are trying to accomplish a lot in just 13 weeks. Every week has its own set of goals, so every week is its own iteration. The tasks you do during the iteration go onto the Action List.
2. Action List
The first rule is that the Action List can only have 10 items (or less!) at any given time. The #1 to-do is what you are working on now. To-dos 2, 3 and 4 are pretty solid – unless there is a drastic change in your world, they will make it to the #1 spot soon and you will work on them. To-dos 5-10 are a little less solid; you might not actually get to them, or you may tweak or even delete some of them. But as of now, you do intend to execute them during this iteration.
That’s really it in terms of Action List setup. You work through it one to-do at a time. Intensely focus on each task and crush it. Make sure you do it as thoroughly and as completely as possible.
Every time you check off an item, take a quick moment to celebrate. Every small win is the opportunity to smile and relieve stress.
3. Idea List
This is what every single person, from CEO to an engineer to a social media manager, gets wrong. They get excited about a new idea, drop what they are working on, and start working on the new thing. This is the worst possible way to get things done. The task at hand is left unfinished. Most likely you will have to go back to it, but you will by then lose the context and the flow. Most likely you will keep adding new tasks, and you will find yourself context switching all the time. As a result, no tasks will be done well. You are going to create half-baked things and nothing will really work.
Remember, you are not necessarily smarter right now than you were 10 minutes ago or a day ago or a week ago. If you made a decision in the past to schedule the task, respect yourself and finish it.
Of course there are sometimes exceptional cases when you can cancel the task at hand, but it should be very rare. In any case, the new task shouldn’t replace what you are working on now.
It doesn’t even make sense to stick new ideas into the Action List yet. That list has already been prioritized, and it’s not yet clear where the new idea would fit. For that purpose, you will have another list, called the Idea List. The new tasks ALWAYS go to the bottom of the Idea List. ALWAYS.
The Idea List can also only have at most 10 items. Why? Because you don’t need to add every single idea you have or you hear to any list at all. In fact, quite the opposite – the default should be to NOT add. Every idea first needs to prove itself to you.
Like things in the real world, the ideas need to compete for your attention and win before they make it to the Idea List.
You need to hear an idea over and over from your customers, co-workers, advisors and yourself. Once it becomes obvious, then the idea will get a spot on the Idea List.
4. Prioritize: Append, Trim and Delete
Regardless of the length of your Iteration – 1 day or 2 weeks or anything in between – in the end of the Iteration, you will re-prioritize. To do that, first append all items from the Idea List to the bottom of the Action List. It does not matter if the Action List is empty or the Idea List is full.
You then re-prioritize everything based on your current understanding of the world and trim the Action List to again be 10 items only. After that, place the 4 runner-up ideas on the Idea List and discard the rest. Don’t be afraid of this step. The ideas will come back if they are great ideas.
Give this a try and let me know how it works out for you. Using another system? I would love to hear about it in the comments.
This post was originally published on Alex’s blog.
I am a big fan of A16Z podcasts, and they just released terrific episode on Network Effects.
Network Effects is an important and somewhat confusing topic.
The reason Network Effects are important is that the businesses with true Network Effects are highly defensible, have strong retention and engagement, exhibit characteristics of monopoly, and tend to last for a long time.
Definition of Network Effects
A Network Effect is achieved when adding new users creates value for existing users.
That is, the overall experience and value being inside the network increases with the addition of new users.
How exactly does it work?
Users want something from each other. Each user in such a network is both producer and consumer.
For example, I write blog posts, and I also read them. I post tweets, and I read other people’s tweets. I check traffic on Waze and I also contribute to traffic reports on Waze.
In other words, I am both a producer and consumer. I am both a reader and a writer.
Businesses with Strong Network Effects
Let’s consider three different types of businesses with strong network effects – Social Networks, Multiplayer Games and Sensor Networks.
Let’s start with a canonical example – Facebook. It is famous for its Network Effects and organic growth. Facebook started at Harvard and grew deliberately and slowly to ensure strong connectivity. The more friends and family that joined, the more value existing users derived.
The core Network Effect is that basic activity on Facebook is sharing or posting to your network. Posts are the glue and the trigger.
Each Facebook user is both a producer and consumer, both the writer and the reader.
Next, let’s look at Twitter, which, much like Facebook, has strong Network Effects. The interesting thing about Twitter is that because it is based on a unidirectional “follow” relationship, it has stronger virality. News spreads a lot faster on Twitter. Yet, Facebook is a stronger network because of the family and friendship ties with personal photos acting as a super glue.
Another kind of business that has strong network effects are Multiplayer games.
By definition, these kinds of games are designed to be played with others. When new players join, existing players are better off. Just like how on Facebook we see formation of cliques of friends, in the Multiplayer games we see cliques of players.
The glue and the trigger for the Network Effects in games is the game itself and objects inside the game.
They provide touch points and the opportunities to co-create the game world for the players. The games are highly sticky because the players need to level up, and starting from scratch in these co-created worlds is very costly.
Lastly, consider Waze, a traffic app acquired by Google. Cleverly, Waze creators realized that people in traffic would be willing to share their location in exchange for being informed about the overall traffic patterns and alternative routes.
Each app writes data points and reads back the traffic. Each app is both a producer and consumer of information.
Network Effects and Virality
Next lets look at the difference between Network Effects and Virality, Marketplaces and Economies of Scale — terms often confused with Network Effects.
Virality is about something spreading quickly over an existing network. Network effects, on the other hand, are about creation of a brand new network.
For example, word of mouth is an example of virality – news about an attack in Paris travels quickly through Twitter. PokemonGo is another example of virality – millions of people raced to play the game. And of course, funny cat videos on YouTube are known to be viral.
Virality is great and is really important in successful businesses, but it doesn’t always last. All of the examples above are examples of short phenomenon that spike up and then go away. We don’t think of these events as sustainable over time. They are hits, or outliers, and not a solid foundation for the business.
To put it differently, virality doesn’t guarantee Network Effects, but Network Effects guarantee Virality.
Network Effects and Marketplaces
Next, let’s look at the relationship between Marketplaces and Network Effects.
It would seem that businesses like Uber and Airbnb would have built-in Network Effects, and they do to an extent for some subset of the users, but it doesn’t appear to be true at scale.
Marketplaces have two sides — supply and demand, producers and consumers.
In the case of Uber and Airbnb, some producers happen to be consumers, but not all. Not all Uber drivers take Uber rides, and not all Uber riders are the drivers. Not all Airbnb hosts are also guests and not all Airbnb guests are hosts.
These, and other Marketplaces, have strong virality via word of mouth, but weak network effects.
Economies of Scale vs. Network Effects
In addition, Marketplaces and other businesses at scale achieve supply efficiency or economies of scale.
For example, UberPool becomes cheaper at scale. That is, once enough people want it, your rides get cheaper, so in a way, there is a Network Effect by virtue of more users joining.
Another example would be delivery services like Postmates. If the volume of the orders is low, then each delivery is a one off and expensive. As the volume increases and gets clustered, then deliveries become cheaper because you can aggregate deliveries together along the same route.
In general, the economies of scale are achieved as the business grows. For example, the business can negotiate with suppliers and get a discount in exchange for buying in bulk.
This has nothing to do with the Network Effects – it is related to monopolies and business defensibility.
In general, the businesses with bigger margins at scale become more powerful and more defensible.
Network Effects in Nature
Before we dive into the mechanics of Network Effects, let’s turn to nature which is full of Network Effects.
In science, they are called self-organizing networks. If you aren’t familiar with this concept, I highly recommend you read Complexity, which is one of my favorite science books.
Carbon-based life, the entire living world around us, is based on DNA and RNA, which has the fundamental ability to copy itself. More importantly, DNA and RNA likely emerged as a result of a process called auto-catalysis.
This may sound like a bunch of scientific gibberish, but it is actually really easy to understand and plays a key role in understanding Network Effects.
Imagine the basic blocks of life called A and B. One day they got together and created a new block called AB. Next, A and B blocks can be mixed with AB to form AAB or ABB. Next, you can make AAAB, AABB, BAAB, BABB and so on.
That is, simple combinations of basic blocks can create more and more complex blocks and chains. A virtuous cycle or feedback loop.
How to Engineer the Network Effects
Now we are ready to understand how you may engineer or check for Network Effects in a business.
Each node needs to be part of a simple feedback loop.
On Facebook, the users are readers and writers. Reading and writing creates a strong feedback loop. It is this loop that pulls the users back to use the service. Much like with basic building blocks of life, it is not one to one interactions that are so precious, it is the one to many interactions.
Groups of Facebook users – friends and family, constantly create and consume information, referencing each other, creating basic feedback loops and pulling each other back.
Facebook is a massively successful business because it is a self-organizing network fueled by Network Effects.
The defensibility of Facebook is the network structure and the ongoing Network Effects – the support and formation of new parts of the network. Users who try to leave are constantly being pulled back by their friends and families.
If you found this post helpful, please give examples of other types of businesses with strong Network Effects. Let’s have a discussion and debate!
Time is one of the things we, unfortunately, don’t have more of.
As the amount of information we have to deal with is accelerating, our time seems to be shrinking.
Here are 12 ways for giving back and being respectful of other people’s time.
1. Schedule Shorter Calls and Meetings
We have written here before about calendar management. One of the ways that time gets wasted is by booking more time for meetings than necessary.
For example, Google calendar and other booking tools often default to 1 hour. That’s a really big chunk of time and is rarely necessary.
By default, schedule 10-15 minute calls, and 20-30 minute in person meetings. Having shorter periods of time makes people skip small talk, and get straight to the point.
This makes conversations amazingly productive and people don’t feel like you are wasting their time.
2. Book Less Time Initially, Go Deeper As Necessary
Always start by booking a short discovery meeting instead of a long one. Get on the same page, identify key issues, and schedule follow ups.
With this approach, you accomplish several things – first, everyone is on the same page about scope of the problem and big picture.
Secondly, you figure out separate follow ups that need to be done and schedule additional meetings as needed. No time is wasted and everyone is feeling productive.
3. Try to Discuss One Topic per Meeting
A lot of meetings meander because people move from topic to topic. Try to have a rule of one topic per meeting. If you can get into a habit of doing this, you will be very productive.
Need to discuss multiple topics? Break them into separate shorter meetings.
With this strategy, it is a lot easier to stay focused, reach a conclusion and come up with the next steps.
Here is a system that I’ve been using for holding office hours at Techstars that works remarkably well. Divide a chunk of your calendar into time spots of 20 minutes each and allow people to book you for 20, 40 or 60 minutes.
The key — only 1 topic is allowed regardless of how much time is booked, so it is up to whoever is booking to think through how much time is needed.
4. Always Have An Agenda and Plan Time per Topic
For most internal meetings you can actually have 1 topic per meeting, but this strategy doesn’t work with, for example, board meetings.
In case you have to have a longer meeting, set the agenda and set the time allowed to discuss each topic on the agenda.
Unless you do that, there is a chance that the a topic will drag and you will never get to other topics. As a result, the whole meeting may run over and feel unproductive.
If you are out of time, sum up the takeaways and schedule a follow up. Don’t spend more time than you are budgeted.
5. Prepare and Send Materials in Advance
The meetings are remarkably unproductive when people aren’t prepared.
Getting everyone prepared is hard because it involves asking for more time.
For example, if you are running a board meeting, it is much better to send materials ahead of time so that the board members have time to review.
Another great strategy that Jeff Bezos instrumented at Amazon is to budget the time in the beginning of the meeting to review the materials. Either way, people need to invest more time to prepare to be productive in the meeting.
It is also helpful to ask people to write stuff down ahead of time. This way, everyone can think things through and really prepare. The culture of writing things down is a super effective tool and helps to avoid wasting time.
6. Summarize Each Meeting and Next Steps
Set aside the last 5 minutes of the meeting to summarize what was said and map out the next steps. Unless you do this, people will walk away from the meetings without a sense of progress and with the sense that time was wasted.
If there is a follow up meeting, be clear on what the topic / agenda will be, who is responsible, and communicate this to everyone. This way, people will feel engaged, positive and productive instead of feeling like their time was wasted.
7. End Calls and Meetings Early and Give Time Back
One of the most wonderful things you can do during a meeting or a call is to end it early.
If there is nothing to discuss, if you got through everything, then wrap it up. Say – we are done, I am giving you 5, 10, however many minutes back.
Get into the habit of doing that and people will LOVE you.
I make a point of repeating this a lot during the Techstars program – I am giving you time back. I am respectful and grateful for your time. By doing so, I hope that founders will start respecting their time, my time and other people’s time more.
8. Don’t Be Late
This is an obvious one, but it is important.
People who are constantly late aren’t aware that they waste other people’s time. There is no situation or reason why this would be okay.
If you happen to be late, always apologize and make it clear that you respect the other person’s time. It’s a seemingly small thing, but it really matters.
9. Don’t Cancel or Re-schedule Last Minute
Another pet peeve is cancelling the meeting last minute or on the same day. I am guilty of doing it a few times myself, and it is really bad.
Cancelling last moment is literally unacceptable if the person has to travel to meet with you because you just wasted hours of their time.
If the meeting is a call or a Google hangout, cancelling last minute isn’t ideal, but it is not as bad, since technically you are giving the person time back.
Still, it is not great because it throws people’s plans and routine off.
10. Don’t Ask for Last Minute Meetings
I’ve written about this topic in a whole post. When you ping people last minute and ask to meet, it is a bad vibe.
First of all, people most likely already have plans, so by reaching out to them last minute, you are implying that they aren’t busy.
More importantly, these unplanned meetings are rarely as productive. This is particularly true if the meeting is meant to be a working session, or there are specific asks. The last minute meetings aren’t great because the other person doesn’t have the context and isn’t prepared.
11. Send Less Email
Email is a beast. The more of it you send, the more of it you get.
Just making a bit of an effort to reduce the volume will help others and help you reduce the volume. See what you can cut out and see what doesn’t need a reply.
Most importantly, quickly move people to bcc when it makes sense, and avoid unnecessarily cc-ing people on your emails. Those add up to a massive waste of time.
12. Use Asynchronous Communication and Google
While Slack and texting are great in some respects, they cause constant context switching.
The loss of context is super costly, because people, after the interruption, have to get back to what they were doing and that takes time.
Do you really have to ask this question? Can you find the answer on Google or internal docs?
If you do have to ask a question, how urgent is it? Does it need to be immediate? If not, use asynchronous communication channels, such as email or tools like Voxer.
Be mindful of interruptions, they are total productivity killers and causes of stress.
And now, please share with us your productivity tips and ways you help others save time.
This was originally published on Alex’s Blog.