Traction Trumps Team When Going For The Million Dollar Round?

Raising Funds, Venture Hacks, AngelList,startup tips

(Photo: César Salazar of 500Startups)

Teams are great. A lot of people look at founders and teams, but of course the product has to be great too. That is unless you’re a founder with a track record for success, but all of that will be covered later.

Greg Kumparak is evidently back at TechCrunch. Kumparak was one of my favorite TechCrunch writers while I was “thedroidguy” we’d bump into each other all the time while I was on the mobile beat, Berlin, Barcelona and of course here at home. He left last year after the Arrington fiasco and apparently he’s back, writing about startups.

So let’s dive into the meat and potatoes of this post here, because that’s why you clicked on the link. We try and share whatever startup tips we can and one of the biggest things people want to know about is raising money. Specifically, startups in their earliest stages want to know how to raise millions of dollars so they can just “work” and not have to worry about where their next meal is coming from or how the rent will get paid.

Somewhere along the way though, $100,000 or even $500,000 was not enough. Everyone seems to be looking for that million dollar Series A round, or even more presumptuously they are looking for a million dollar seed round, or angel round. Regardless of the round, Ash Fontana, a venture hacker at AngelList, came up with the bullet points above when talking about raising a good million dollar round.

Like me, one of the first things Kumparak noticed in the slide is that product and team are crossed out. Traction is clearly circled. So now traction is the most important?

Perhaps this is right, but of course from the perspective of an AngelList venture hacker it’s absolutely right. AngelList thrives off traction. We actually learned that 500 Startups, startups, actually plan one startup a week that they will all follow on AngelList in unison. This way a 500 Startups, startup, is always trending on AngelList.

This real need for startup traction actually goes well beyond AngelList and can be a key performance indicator when your deal is being reviewed by investors.

In case you can’t clearly read the slide here are the key take-aways, things that your startup should already have before approaching that investor for your million dollar round:

– Enterprise startups need to have 1,000 seats at $10/seat/month

– Big enterprise startups need to have 2 pilot contracts with some $

– Social startups need 100,000 downloads and signups

– e-commerce “market place” startups need to have $50,000 in revenue per month

Fontana did disclose to Kumparak that these numbers are just rough estimates based on his insight and not actual numbers directly from the AngelList database.

While many investors talk about the importance of product and team it seems that when you get to the stage where you’re ready for a $1 million dollar investment (or more) the product and the team should already speak for themselves and the traction should tell their story.

Tell us what you think in the comments.

Source: TC

The Angel List That Matters, All The Incubators & Accelerator Taking Apps Through Angel.co

Here’s the complete list of incubator and accelerator programs that you can apply to using an account from angel.co (Angel List). If youu’re not familiar with Angel List, it’s one of the three things we recommend you sign up for as soon as you start your startup, the list also includes CrunchBase and Startup America. Info on all three is here at “three free things every startup should do”

Marquee accelerator programs like 500 startups, Techstars and Dreamit Ventures are all using the Angel List platform for easy access to applications. Here’s the complete list.

500 Startups, Silicon Valley program focused on startups everywhere. Founded by crazy ass Sith Lord of Startups Dave McClure. This program promotes entrepreneurship everywhere. Apply here

Techstars, one of the widest recognized brands for startup acceleration based in Boulder CO with programs in Boulder, Seattle, Austin, Chicago and New York. Apply here.

DreamIt Ventures is based in Philly with programs in New York, Austin and Israel. Apply here

Capital Factory is based in Austin with a concentration on revenue vs follow on funding, Apply here

Murker Lab is one of Silicon Beach’s (LA) marquee startup accelerators. Apply here

Alchemist Accelerator based in the valley they are looking for startups with “distincitive technical cofounders” Apply here

sxswVC Fast Pitch at SXSW in Austin Apply here

LaunchPad LA is in it’s 5th class for their LA based mentor driven accelerator Apply here

Amplify.la Amplify is a hands on startup accelerator and multi faceted entrepreneurial campus in Silicon Beach (L.A.) Apply here

Upstart Labs, located in Portland they focus on B2B startups Apply here

Founder Fuel, Is a Canadian based accelerator in Montreal with $50,000 seed and an opportunity for $150k follow on Apply here

Launch Pad, is in the heat of New Orlean’s Super Bowl of startups Apply here

Longhorn Startup is an entrepreneurship class at UT in Texas Apply here

SeedStartup is an international startup accelerator in Dubai Apply here

GSF India is a multi-city startup accelerator in India located in Delhi, Mumbai, Bangalore and Chennai Apply here

nReduce is the online startup incubator Apply here

And why you’re at it why not pick up two tickets to the largest startup conference in the U.S. everywhereelse.co The Startup Conference

Techstars Now Taking Applications Via AngelList

The popular TechStars accelerator program announced last week on their blog that they are now taking applications via AngelList.

500 Startups was the first to go the route of using AngelList to allow startups to apply their program, with their current session. Traditionally to get into 500 startups accelerator program a startup had to be recommended internally. 500 Startups founder Dave McClure opened up the current session for general applications, but only using the AngelList platform.

TechStars is taking applications through their website and also through AngelList.

Techstars founder David Cohen does say that if you apply via AngelList and you’re selected for further evaluation you may need to answer some of the more specific questions found on the application on the Techstars website. However, applications are welcomed from either site.

Techstars is currently taking applications via AngelList and their website for their Boston program that starts February 25, 2013. The early bird deadline for Boston applications is next Monday December 3rd and the final deadline is December 17th.

Applications are also open for the New York City 2013 cohort. The early bird application deadline is January 4, 2013 and the final deadline is January 18, 2013. That session begins April 2, 2013.

Linkage:

Techstars schedule

Techstars application via their website

Techstars application via Angellist

This is the biggest startup conference in the world

5 Angel List (Angel.co) Startups In Memphis

Please don’t mistake me for an angel.co basher it’s a very useful tool. However, week in and week out we get an email from angel.co with the “trending startups” and they are almost always invariably from Silicon Valley and New York. That’s why we’ve developed this series to highlight angel.co startups from “everywhere else” it’s more of a compliment to angel.co rather than a bash. Oh and by the way it would be super cool if you followed Nibletz on angel.co

Today we’re taking a look at five angel.co listings form Memphis because it’s a big weekend for Memphis startups.

Seed Hatchery

First up is Seed Hatchery they’ve been an instrumental incubator and backer of the thriving startup scene in Memphis, they are also one of the sponsors for this weekends 48Hour Launch Memphis event.

Seed Hatchery was born out of venture capital firm Solidus Company in Nashville Tennessee. Solidus has invested over $112 million dollars in 48 companies over the last 24 years. According to Seed Hatchery’s website, the Solidus Company saw a gap in investment opportunities to stimulate growth in startups. They found that many companies needed a lot less money to start working on their ideas.

In December 2010, Vic Gatto of Solidus, Eric Matthews of Launch Memphis, and Gwin Scott established Seed Hatchery in Memphis to help “seed” growth of early stage startups.

Seed Hatchery held a Demo day last month for their most recent “class” of six startups that went through their incubator.

For more on SeedHatchery visit this site
For more on this weekend’s event in Memphis click here
Follow SeedHatchery on Angel.co here

Friendsignia

Friendsignia is a very intuitive social dashboard that has a lot of people talking. SeedHatchery founder Vic Gatto said of the new social startup:

“They solve the biggest pain point in social media today… too much noise.”

Based on their description alone I’m waiting for my beta invite. What Friendsignia does is pulls social data from Facebook and Twitter and filters out meaningless updates from strangers. Friendsignia delivers the 150 people that matter most to you.

This is perfect for me as I have over 100,000 followers on Twitter and try and follow a good deal back (60,000) however I haven’t been able to look at my “home” timeline in over two years it’s way too noisy, so I use lists and streams from Hootsuite. As their angel.co listing says “For a power user it’s a more efficient social dashboard”.

As with Gatto, for the professional it’s a better way to keep up with business contacts and associates who matter.

Now, not only is Friendsignia a new and more powerful social dashboard but they’ve got this really kick ass blog entry here to talk about what they do.

Find out more & request your beta invite here
Follow Friendsignia on angel.co here

PayTopia

PayTopia is a startup that promises a way to pay online without exposing your financial information. Sure this sounds a lot like PayPal, but so many people are burnt out on post E-Bay merger PayPal that they are jonesing for a new way of using their money online. PayPal complaints are up 70% post merger, with many longtime users switching away from PayPal because they no longer defend the “seller” in most transactions.

PayTopia has taken an innovative approach to paying online. Now your financial information and personal information is no longer at risk. PayTopia allows users to use their email addresses and a pin number to initiate payments.

Merchants submit payments to Paytopia, Paytopia texts the user with an authorization code and then the user gives the authorization code to the merchant to complete the payment.

In addition to providing user safety, it’s quicker than filling out an entire web based payment form.

Find out more about Paytopia here
Follow Paytopia on Angel.co here

StiQRd

I know that loyal readers of nibletz know how I feel about “loyalty and rewards” right about now. We called it right before SXSW that loyalty and rewards were going to replace group couponing and they have. However Memphis based Stiqurd (Stickered) has a couple points up their sleeves.

First off, StiQRd CEO Aaron Prather has a background in restaurants. Before StiQRd he owned his own restaurants. He felt a serious pain point with current loyalty offerings. You could go the cheap route with untraceable punch cards. Or you could spend thousands of dollars, which just isn’t in the margin of a restaurant, to do a swipe card.

StiQRd solves that problem by putting the loyalty and reward piece in the phone.

StiQRd is a QR code based reward and loyalty app for iPhone and Android. On the merchant side they offer a comprehensive dashboard to track visits, purchases and points for their most loyal customers.

As we’ve heard ever so often 15% of the top loyal customers can account for up to 50% of a restaurants revenue. With StiQRd everything is kept in one place, your phone.

StiQRd is currently leading the 1-99 employees category in the social madness competition in Memphis. Voting ends June 19th

Check out StiQRd here at their website
Download the Android app here at the Google Play Store
Check out the iOS app here in the iTunes store
Follow StiQRd on Angel.co

Work For Pie

Work for Pie is a community for open source developers. They describe themselves as a bit like Klout (not sure why anyone would want to do that) and a bit like LinkedIn, but for open source developers.

The social community for open source developers allows developers to collaborate with each other and source each other for help with their projects. Users can also recommend and refer their fellow open source developers.

Their intuitive profile platform highlights not just their biography points but also their coding skills and work history. They also have a point based system based on recommendations and referrals so that if you’re looking for a certain type of developer you can find not just that type of developer but the best developers as well.

Last month Work For Pie closed on a $300,000 round of funding.

Check out Work For Pie on their website here
Follow them on angel.co here

Arkansas Startup: Rebounces Puts The Green Back In The Tennis Ball

In our endless quest to look past the trending (read valley based) startups on the Angel List (angel.co), we came across one that is sports related, fun, green (environment) and green (money). The startup is called reBounces and they are based in Harrison Arkansas.

Arkansas has a bubbling startup scene and we’ve covered a handful of startups from Arkansas here at nibletz.

So what is reBounces?

Well Rebounces was founded by Bill Dirst and Cannon Fletcher. The company uses a gas based mixture technology invented by Dirst to put the bounce back into flattened tennis balls.

Typically when a tennis ball has been used over and over again they start to deflate. Even if you are only a casual tennis player you’ve probably noticed this deflating. Normally when a tennis ball deflates the natural reaction is to go buy another can of balls. While that’s all well and good, the tennis balls are not biodegradable and even in their flattened state they go into the landfill.

With the reBounces technology tennis balls are dumped into the Green Tennis Machine. After the machine is sealed and the balls sit for three days they enviro-magically have their bounce back. The balls have the same bounce as balls that just came out of a fresh can and they are back to regulation.

More after the break
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