Comments Off on Here’s A Way Not To Get An Investment From Mark Cuban0LikeLike 6,278
Mark Cuban (c) hanging out with nibletz co-founder Nick Tippmann (r)
You may have heard through the grapevine that Mark Cuban is an aggressive investor in early stage startups. Take the Shark Tank out of the equation and Cuban is still eager to invest in good technology.
Many people also know that Mark Cuban is one of the nicest and most approachable billionaires in the world. You can pretty easily find his email address online and if you’ve got a good question or a good pitch he’ll actually respond to you. Heck he’ll even let you talk smack about basketball.
But earlier today one startup founder took the absolute wrong approach to win over Cuban’s ears and investment. It seems that this founder is in the process of closing a round. He apparently has a commitment from Peter Thiel and wanted Cuban to get in as well.
So what does he do? He emails Mark Cuban with the subject line: “Peter Thiel invested so you’re lucky I’m emailing you”.
Comments Off on Quick Tip A Fundraising Dealbreaker: Crazy Cap Table0LikeLike 3,266
So your product is out and your starting to get some traction (if you need more traction click here). It’s time to take that idea and go to the next level, but for that you need money.
Fundraising is the hardest part of a startups life. Many startup founders are inexperienced at fundraising, and perhaps the thought in itself is scary. Compound that with the fact that it’s traditionally it’s harder to raise money “everywhere else” and you’ve got the cards stacked against you.
So going forward with fundraising you need to make sure all your ducks are in a row. You want to make sure your deck looks great and your executive summary is clear and concise. You want to have your milestones and victories prominently showed off. You don’t want to waste an investor’s time.
Forbes recently posted some tips on deal breakers for inexperienced entrepreneurs. One of those is having a crazy cap table.
If you’re not familiar with a cap table, no worries, it’s the part of your corporate structure that defines who holds what in terms of equity.
A crazy cap table is a hodgepodge of small investors who may cause potential headaches for management and institutional investors.
How can you fix it?
While you may have given equity to anyone who liked your idea enough to give you a little bit of money, it’s time to start evaluating who gave you what, how much equity you gave them in exchange and what they will bring to your company down the road.
You can approach this and clean up your cap table by buying back your existing stock whenever you can afford it. You can also dilute those equity holders as you raise money. Be very leery of any investor that refuses to get diluted, and/or asks for preferred stock early on.
If you have an investor in your cap table that many not be a recognizable name to your future investors but bring something of real value to your company make sure that’s highlighted in your executive summary.
Comments Off on Talk Is Cheap 10 Things New Startup Founders Always Say0LikeLike 2,831
Talk is cheap, especially when a pitch is filled with startup buzzwords. One of the huge benefits to last Sunday’s 2 minute quick pitch contest at everywhereelse.co The Startup Conference, was that many of the startups had very limited pitching experience. This also meant that they hadn’t picked up on bad habits, like filling their presentations with buzzwords, that can ultimately be seen as crutches.
Coming from a background with 20 years on commercial radio I am no stranger to crutches. DJ’s have a ton of buzzwords “on your radio”, “coming up,coming up,coming up”, and the always irritating repeating everything the person calling the radio station says to buy more time.
Well in the startup world crutches are also immensely popular. Things like “we’re not too concerned about revenue” or “we’re going to build virally and organically”, are complete turn offs to not just me but to investors who know all the buzzwords already.
Our good friends at Spinnakr.com just published a list of 37 things that new new entrepreneurs say. Here are 10 of them.
This idea is unstoppable.
Nothing else like this exists.
Sorry, man . . . I can’t tell you unless you sign this NDA.
We’re going to totally disrupt the market for [spy cams], [back scratchers], [player pianos], [hover bikes].
We’re expecting hockey-stick growth curves, year after year.
You can see the rest of the list at the link below. While these may not be the most irritating of them all, you should get the idea.
When you’re pitching, whether it’s at the end of an accelerator demo day or your pitching in a VC’s office you need to kill them with your product, presentation and personality. Knowing the buzzwords doesn’t impress anybody.
It’s Investor Day/Demo Day season across the country. We’ve got Brandery’s demo day in Cincinnati in two weeks on October 3rd. RevTech in Charlotte’s demo day is also October 3rd. MassChallenge has a class graduating soon, and so do many more.
Here at nibletz, the voice of startups “everywhere else” we attend a lot of demo days and we get asked for feedback by lot’s of startups. So here we’re going to show off some pitch videos from investor/demo days and share what we personally like to see. Of course take our advice however you’d like.
Product Product Product
Product is the most important thing at Demo Day, at least in my opinion. We’re going to go out on a limb here and assume that a business plan, pitch deck or wireframe is what brought you to the accelerator in the first place. Now you’ve completed a three month accelerator and received a decent amount of seed funding. I don’t care what the reason, you better have a product. The accelerator staff may blow smoke up your ass but if I personally had given you the seed money, and I don’t see a product, youre going to be cutting my grass for many years to come.
Enough on the startup lingo
The point of the three month accelerator was not to hear about minimum viable products, bandwidth, game changing, disruption or that you’re a change agent. I also don’t want to hear “at the end of the day”. Truth be told most investors know the buzzwords and it’s often times a BS alert in the pitch, either that or a crutch. So at the end of the day those investors are going to go home to their families without investing.
Statistics are as boring as your statistics class
I love startup pitches on investor day that use real world examples of problems and not a hodge podge of statistics and a boat load of slides to show them. Remember that you rattling off statistics is nothing more than you rattling off statistics. Use your key statistics in nice colorful charts, leave them up for a few seconds but I’m sure you have your pitch deck in an emailable file or better yet on slideshare. If someone is jonesing to see all your stats, follow up later. Don’t put anyone to sleep
Growing organically and virally in the first year and making revenue in the second year
This is absolutely NOT a viable go-to-market strategy. We, and of course investors, want to know where your revenue is going to come from, the first year. In fact they want to know where your revenue is going to come from tomorrow. I don’t care what you told yourself in the mirror this morning, chances are very high that you’re not the next Kevin Systrom.
Stealth Mode
If you’re a nibletz reader you know we hate stealth mode, it’s bull shit. Somebody else already has your idea, it’s about execution and product not about keeping secrets. Now at investor day/demo day all of your cards should be on the table. If you’ve got a video capturing app and more features coming that are in stealth mode, why aren’t they in the product now. Perhaps you should have spent less time playing foosball and more time working on the product.
You can’t listen if you don’t stop talking
Whether you’re in a Q&A session right after a pitch, or fielding questions at a booth or in the crowd after the event, you can’t listen if you don’t stop talking. A lot of people are going to tell you what a great job you did. Take those compliments in stride. But when it comes time to answer questions, answer them concisely, and quickly. If you don’t understand the question, let the person asking it know that, they’ll respect you more. If an investor asks you something and you don’t know the answer to it, tell them it’s a really good question, jot a note down and either research the answer on your iPhone or with your team and get back to them that night, or follow up. If you bullshit they’ll smell it.
Don’t forget personality.
There’s a good chance that you were picked for the accelerator not because your ticket selling app was going to take on Ticketmaster and Live Nation, but rather because the board liked you, or your personality. Don’t forget to interject some of that in your pitch.
And now a video…
This is Banyan, they won a $100,000 in the GigTank challenge which was an investor day challenge for the Gig Tank accelerator in Chattanooga. Here’s why I love this pitch.
– First off I’m not big into the product I’m not sure how big the market is. It’s a collaborative research tool, it’s a great concept but again there’s not a huge market and researcher’s aren’t the best at sharing. That’s not the point though. I thought Toni Gemayel had a great pitch.
– Banyan had a product. Banyan was up and running and had been thoroughly tested
– Gig Tank’s theme was literally “high bandwidth” startups. The accelerator was built around Chattanooga’s 1Gb fiber. Researchers who use Banyan have to transmit enormous amounts of data. Gemayel conceptualized this by saying if a researcher wanted to send 2 terrabytes of data from Stanford to the UK under traditional bandwidth constraints it would be quicker to get on a plane and fly there.
– Banyan offered several plans at making money immediately, not two years down the road.
– Finally, Gemayel had everyone laughing with a really small joke at the end of the presentation. Watch the video to see it.
Comments Off on Tips For Pitching At A Hackathon Style Pitch Weekend0LikeLike 2,125
As the voice of Startups everywhere else we spend quite a lot of time at hackathon style startup competitions. You know the type,two or three day build a startup weekends. In fact there’s an international organization called Startup Weekend that hosts a lot of the events we really enjoy covering.
Now let’s preface this and say these tips are from the last ten events Cameron, Brent and I have attended and or judged, and not the two events we are at this weekend.
Timing Is Everything
In most weekend long startup competitions the first day starts with rapid fire pitches. From there they are whittled down to a handful of ideas that will be developed over the weekend period. The rapid fire idea pitches are between 2 and 5 minutes. That’s certainly not a lot of time. Make sure your pitch is concise and you don’t sound like the micro machine man.
Cut To The Chase
You don’t have a lot of time to pitch. Jump right into the idea first and do the background stats second. It’s ok to run out of time rattling off statistics that many have probably heard before. If you start with the stats upfront,you may not have enough time to actually get the idea out there. If you run out of time on the idea, your startup has very little chance of getting produced.
Build The Startup During The Contest
Keep in mind these are “weekend pitch contest tips”.
If you have your pitch deck done, a product in beta or at least a concept built,a weekend hackathon style contest isn’t the place. You need what we call in these parts, a networking event.
To me there is nothing less classy then signing up for a startup weekend event, pitching a product just about done that may need a designer or two or a marketer, or an investor and then leaving when your idea doesn’t get picked. Network, help others that aren’t as far along as you are.
Mark’s Mango Smoothie Shop or Toms Tshirt manufacturer isn’t a “startup” most startup weekend style events are looking for businesses that can go from idea to proof of concept in 48, 54 or 72 hours.
The Team That Works Around The Clock Will Probably Win
I’ve only seen two startup weekend style events where the teams didn’t have at least the option of working all weekend long. If you had a great idea and so did Tom and you went home and Toms team stayed all night, when you get back in the morning don’t be surprised if they already have social media streams, an alpha shell and feedback from four major companies. That’s just the way it goes.
In fact at a Startup Weekend in Portland most teams stayed all weekend even with a threat explosions and guns
Do Your Research
If you’re going to make a claim in your pitch that you have the first ever this or the first ever that,do some research. When judging contests I’ll give you the benefit of the doubt if I can’t find your concept ten pages back in Google search results. However if your idea is on the first page in the Google Results within the first two results, FAIL.
Pay It Forward
Last night at the launch for 48 Hour Launch in Memphis folks from Friendsignia, Paytopia, Work For Pie and other local companies who have either been through 48 Hour Launch or Seed Hatchery were there. They joined teams and they are mentoring and helping. Especially “everywhere else” you need to stick together. Take a look at St.Louis. St.Louis native Jim McKelvy, best known for being a co-founder of Square, is constantly reinvesting in St. Louis.
Kyle
