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Curated by Marc Kneepkens
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The two best pieces of early-stage pitching advice

The two best pieces of early-stage pitching advice | Pitch it! | Scoop.it

Over the past 10 years I’ve been on the first cap tables of three startups for which I’ve been responsible for closing their capital-raising efforts. I’ve been in over 200 investor meetings as part of the operating team, and have raised money from the smallest angel investor to the biggest European VC funds and some of the world’s largest corporate investors.

My present role as head of corporate development at Founders Factory has me on the other side of the table, assessing the materials and pitches of many early-stage startups, as well as running the internal Founders Factory program designed to assist our cohort close out their next round of financing. Read more: click image or title.

 

 

FREE Business Plan Template here: http://bit.l/1aKy7km

Dave...I downloaded your business plan template...It is great!!!...My tax consultants say your plan is amazing. Thanks Dave!!!

Marc Kneepkens's insight:

About the magic of delivering a great pitch.

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How To Raise Venture Capital

How To Raise Venture Capital | Pitch it! | Scoop.it


It’s no secret that entrepreneurs need funding to launch or grow their nascent companies, and some will seek the support of venture capitalists (VCs) to fulfill their ambitions. For many entrepreneurs, myself included, pitching to potential investors is far from an enjoyable task; at times, it can even appear to be a wasted effort. According to this report, venture capitalists provided $29.5 billion in funding to 3,382 businesses in 2013, so they have earned an unfortunate reputation as a necessary evil in the startup world.

Part of the problem stems from the fact that aspiring entrepreneurs, particularly first-time founders, don’t know how to engage or attract potential investors. Inexperienced entrepreneurs employ a blanket approach by giving the same rehearsed spiel to any venture capitalist who is willing to listen. In the end, nobody wins.

My current company, Retention Science, is my third business endeavor, and through the course of raising money for three companies, I learned firsthand how arduous and difficult the fundraising process could be. But it doesn’t necessarily have to be the case. The negative stigma associated with securing funding isn’t a given; it doesn’t have to be a nerve-racking ordeal, and it certainly doesn’t have to be a perpetual disappointment.

I’ve learned a few key tactics that can prove invaluable when pitching a company to prospective investors.

Don’t Talk To Everybody

Contrary to popular belief, it’s not wise to pitch to anybody who will listen (though it is understandably difficult to say no to meetings). Your time is just as valuable as the VCs and you should only meet with VCs who specialize in your field.

It is also critical to identify the right partner to pitch to within a VC. Every partner has different investment interests, styles and seniority within the firm. Start by targeting ones who are most likely to be interested in your company.

When I started Retention Science, we listed ourselves on AngelList, a popular funding platform for startups, and received around 25 intro requests, but we only took meetings with a select few that made sense for our company. For instance, I met with Katherine Barr at Mohr Davidow Ventures because of their proven track record with successful B2B enterprise companies like Rocket Fuel  and Rally Software. They also had a known venture partner, Geoffrey Moore, who authored Crossing the Chasm, a respected publication on selling and marketing high-tech products like ours.

Look Into Your Own Network

One way to filter the investors you should meet up with is to target people who you already know, either directly or indirectly. After all, it is much easier for VCs to take an aspiring entrepreneur seriously when introduced by someone they already trust or know.

For instance, Andy Rankin, one of our earliest Angel Investors, introduced me to Kirsten Green, the founder of Forerunner Ventures. At the time, I wasn’t actively seeking capital, and I had instead hoped to be given the opportunity to work with her impressive list of portfolio companies, including Bonobos, Warby Parker and Birchbox. As we continued discussions, however, Kirsten realized that many of her commerce-based portfolio companies had the exact same needs that Retention Science was addressing. Our conversation quickly shifted away from a sales angle to a fundraising one because Kirsten was interested in being a part of the company. The shift was very serendipitous and natural once we realized that we’d be great partners with each other. But if it weren’t for the initial connection by Andy, we’d have never met Kirsten in the first place.

Research, Research, and Research More

Pitching to investors involves making a personal connection and telling a story they can relate to from their own investment experiences. A successful pitch is not only about the idea; it is about helping the investors to see your vision, size up the market, and, most importantly, foresee a profitable business model. Assuming you already know everything there is about your industry, make sure you thoroughly research everyone you will be speaking to so you can identify ways to connect on a personal level.

Whenever I confirmed a meeting with prospective investors at VC firms, I would thoroughly research all the partners who I might speak to. I familiarized myself with their previous investments, their philosophies, and their LinkedIn profiles, and I drafted notes and questions based on this information.

By the time I actually arrived at the meeting, I was able to modify my pitch to reflect the specific investment and professional experiences of the partners who were present. By the time I pitched for Retention Science, I convinced four partners from Mohr Davidow to sign on with us within a 24 hour span, the quickest turnaround I’ve ever had.

Be Yourself

When pitching to investors, it can be all too easy to revert to a façade of no-nonsense professionalism. However, it is important to remember to be yourself and to act natural. After all, as much as partners invest in an idea, they also invest in people.

As the saying goes, you are only human, so relax. It will make it much easier to demonstrate your knowledge of the problem you are trying to solve, your expertise in the market you are trying to enter, and your genuine excitement to create a viable, profitable solution.

Investors are trained to see through the “smoke and mirrors” of superficiality. They are generally good judges of character regardless of how you present yourself. So the best bet is to go into a meeting as yourself. An advisor once recommended that I pitch myself and my business differently to compensate for my youth and my enthusiasm, which, I was told, made me seem inexperienced and desperate. I tried to modify my actions accordingly, but in the end, I realized that I wouldn’t want to partner with an investor who wasn’t willing to work with me as I am.

You Can’t Control Everything, Such As Timing & Luck

Timing is everything in life, and it no different for fundraising. The outcome of many interactions with investors will hinge on the timing of the meeting. Some factors are beyond your control. If a VC just concluded a successful investment with a company similar to your own, they are more likely to look favorably on your proposal. But if they just came out of a lengthy board meeting, you may have difficulty capturing their full attention. Though you have no way of knowing an investor’s state of mind, you can at least do a little casual probing to gauge their mind frame before you launch into your pitch, and adjust accordingly.

There are some factors that you can control. If a VC gets in touch with you about setting up a meeting, be prompt to respond. You’ll be more likely to guarantee yourself an optimal time slot. Also, make sure to show up earlier than your meeting time. With luck, you may be able to snag a few extra minutes of time to pitch your company.

It is also critical to remember that VCs are generally busy people with jobs and lives outside of their meetings, so it will likely be difficult for them all to gather in a single room and agree to place their money in a certain company. The decision-making process is often delayed, so remain patient. At the same time, while persistence is always good, avoid resorting to obsessive emails or phone calls, which can quickly morph into annoyance.

Follow Up and Perform Due Diligence

Fundraising is not rocket science, yet many entrepreneurs drop the ball when closing a deal. Remember that a verbal commitment is not the same as a signed agreement, so keep working with your partners until the money is in the bank.

Until the partnership is legally finalized, make sure you attentively and directly answer all of the requests that come your way—investors take everything into account when forming their impression of you, and they are probably taking notes on how well you respond to their additional requests when handling the final steps of the fundraising process. Expect to receive numerous follow-up requests of all types, and respond to them in a thorough, timely, and professional manner.

Final Thoughts

Fundraising has developed a negative stigma, possibly because entrepreneurs see it as a necessary evil and a stressful ordeal. But it does not have to be the case. Fundraising involves more than just securing financial support – it also entails working with the right partners who can take a company to new heights. So rather than fear the process of raising money, cherish the learning experience and revel in the opportunity to make new connections.

Though it may sound cliché, fundraising is much like getting married. Your partner provides not only financial support; they also lend you their expertise, time, and invaluable advice. Our investors at Retention Science visit our office frequently enough to be called honorary team members, and having them around constantly reminds me that they are so much more than sources of capital. When you can feel that way about your investors, you’ll know you’ve made the right partnership.



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Viral Growth and Analytics: What does a growth hacker do on a day to day basis? - Quora

This is a great Quora question with a bunch of really cool answers.


A growth hacker's job is to find a scaleable, repeatable way to grow a metric - be it signups, invites, or a certain action (eg - endorsements on LinkedIn). To that end, she looks at the data, finds a baseline and does whatever she can to increase a the desired variable. In order to do this, growth hackers come up with hypotheses and test their hypotheses out.


To read the full text, click on the title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km




Marc Kneepkens's insight:

Great information from some expert people. Some of the answers are very detailed.

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Zuck’s Advice To Startups: Explore Before You Commit, Listen, Build Something Fundamental, Don’t Copy | TechCrunch

Zuck’s Advice To Startups: Explore Before You Commit, Listen, Build Something Fundamental, Don’t Copy | TechCrunch | Pitch it! | Scoop.it

Facebook didn’t guess that users wanted to share photos. It learned it, Mark Zuckerberg explained in his talk at Y Combinator Startup School. “We really listened to what our users wanted, both qualitatively listening to the words they say, and quantitatively looking at behavior that they take.” Users didn’t necessarily say they wanted photos, but were uploading new profile pics every day.

So Facebook built out photo sharing, it exploded with popularity, and proved that sometimes the data can reveal what users want before they even know it.

That wasn’t the last time Facebook would put turn this practice into product. Hundreds of thousands protested the news feed, but engagement was up, Facebook stuck it out, and news feed became one of the site’s most popular features.

To read the full article, click on the image or title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km



Via Shahzaib Khan
Marc Kneepkens's insight:

Great advice from Zuckerberg. It's not just the idea of Facebook, it evolved with trial and error into a great company.

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3 Things Everyone You Meet Should Know About Your Start-Up (Elevator pitch) - The Start-Up

3 Things Everyone You Meet Should Know About Your Start-Up (Elevator pitch) - The Start-Up | Pitch it! | Scoop.it
What questions should your elevator pitch answer and how should you go about it? Here are your answers.

Once you have completed a business plan for your new business, you feel an enormous sense of accomplishment. You will have learned more about your ideas, your target market, the risks involved, and your strategies than you could have possibly imagined you would know before you completed your plan.

Now that you’ve drafted this plan up in one form or another, you’re going to use it to guide you through your business development. This plan is now your ‘bible’. If you are not in a position to self-fund your new project, you’re going to also use this plan to raise money, and that means presenting your plan to investors. You need to become that master and omniscient creator of your new ‘bible’. You need to be a quick-witted expert on all things ‘new project’.

The fact is, regardless of whether you are seeking out venture capitalists, angel investors, or even raising funds from friends and family, these prospective investors aren’t going to read all 50 detail heavy pages of your plan. Hopefully they’ll read your executive summary, but in order to get to that point you need to excite and hook them. These questions will help you form your elevator pitch. Every time you meet a stranger at the coffee shop, in the elevator, at the gym, or pumping gas, you should be answering these three questions for them before they ask and before they even know that they care. Yes. Introduce your baby to everyone you meet, as often as possible, and with confidence. It is your job.

If you can easily and skillfully answer the following questions with the confidence of the omniscient creator of the ‘bible’ of (insert your project here), then you will be well on your way to leaving your prospective investors with seemingly no choice but to be a part of your team or a future customer/client. And they thought they were just running to get their morning coffee…

To read the full article, click on the image or title.


Is your Business Plan working? Is it Succeeding? http://bit.ly/1iHk8zP

Marc Kneepkens's insight:

Telling someone about your business in a few words is a must. It can be learned. This article tells you how.

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How To Put Together The Best Elevator Pitch

How To Put Together The Best Elevator Pitch | Pitch it! | Scoop.it

How To Put Together The Best Elevator Pitch. You could have the best product in the world, but it doesn't mean anything if you can't sell or get users. 

It’s much easier to build a relationship and trust with someone when your talking to them in person rather than over the internet. The biggest problem is how to construct that elevator pitch so that the person you’re talking to will fall in love with your product or service.

To read the full article, click on the image or title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km

Marc Kneepkens's insight:

This article teaches the "Elevator Pitch". Exact, to the point, direct. Make it happen. Not just for funding, but for meeting people the first time and telling them in less than a minute who you are and what you do.

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Acing The Investor Presentation | CEO.com

Acing The Investor Presentation | CEO.com | Pitch it! | Scoop.it
Acing The Investor Presentation

Shark Tank venture capitalist Kevin O’Leary recently said, “It’s all about the money, all the time.” O’Leary is right. When you are asking for money from an angel, VC, PE or IPO institutional or individual investor the key message is about how the investor will eventually make money by supporting your company or idea.

On the other hand, you can’t walk into a pitch like Cuba Gooding in Jerry McGuire and shout, “Show (give) me the money.”

Pitching to investors is hard work and fraught with risk. It can make or break a company. The challenge for the actual presentation vs. a written pitch book or slide deck is when you are seeking capital you must prepare and rehearse for a variety of settings – the 10 minute pitch at a bake-off contest, the full 45 minute presentation with Q&A to an investment committee, the one-on-one when the investor just asks questions before you show a single slide.

While there are no foolproof secrets – and you need to be flexible to adapt to the presentation format – if you understand the Triangle of Persuasion, you will increase the odds of a favorable outcome. The Triangle of Persuasion forces you as the presenter to adapt your content within three variables – The Audience, The Stickiness of the Message and your own skills as a Presenter.

To read the full article, click on the image or title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km

Marc Kneepkens's insight:

The 'Triangle of Persuasion' is a great tool and explanation on how to make good presentations. Recommend reading in case you have to make a pitch, and don't we do that all the time?

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Startup Metrics, a love story. All slides of an 6h Lean Analytics w...

Everything you need to know about Startup Product Metrics. This is a slideshare exclusive. The full 8hour workshop deck. #iCatapult Workshop - 2013-08-12 ...

Slideshare presentation.152 slides.

Click on title or image to see the full presentation.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Via Cédric Giorgi
Marc Kneepkens's insight:

Complete, thorough, everything you ever wanted to know about 'metrics'.

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Cédric Giorgi's curator insight, March 16, 2014 5:18 AM

Definitely a must read and worth keeping not far as it is valuable for any kind of situation in the startup life. 

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Five rules I learned from 7 years of coaching Launch Festival & TechCrunch50

Five rules I learned from 7 years of coaching Launch Festival & TechCrunch50 | Pitch it! | Scoop.it

I’ve been coaching companies like Yammer, Dropbox, SpaceMonkey, Brilliant.org and Mint for the past seven years for the LAUNCH Festival and previously TechCrunch50 (RIP!).

Over 350 startups have been on the stage, including the 40 who will join us on Feb 24-26th at this year’s LAUNCH Festival. Our event has grown from 400 folks packed into the Palace hotel to 9,000+ at the Design Center Concourse.

9,000 people, wow. Might even hit 10,000!

In this time I’ve defined five things about what makes for a great presentation at a conference:

To read the full article, click on the image or title.



Get your Free Business Plan Template here: http://bit.ly/1aKy7km

Marc Kneepkens's insight:

These tips are real practical examples. Take a good look.

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The 15 Startup Misconceptions | RockThePost Blog

The 15 Startup Misconceptions | RockThePost Blog | Pitch it! | Scoop.it

Nowadays, entrepreneurship is a popular path, and the barriers to launching a company are lower than ever.  What used to cost millions of dollars in servers for tech startups now has been reduced to $5,000.

Additionally, legislation is changing up the entire landscape of fundraising – from the way you are able to advertise your raise on venues such as Twitter or LinkedIn to (soon) being able to receive outside capital from investors that don’t qualify as accredited (only 1% of the US qualify).

There is no doubt that the entrepreneurial life is glorified, and in our time of equity crowdfunding for startups at RockThePost, we’ve seen many misconceptions about startup life that aspiring entrepreneurs hold to be true. Here are the 15 Startup misconceptions we see the most.

To read the full article, click on the title.


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http://bit.ly/1aKy7km

 



Marc Kneepkens's insight:

There is a huge world of potential out there. Streamline what you have, start with a great plan and learn, all the way. The millions and billions never came easily.

I would suggest, start with a business plan, it'll make you look at your idea or project a little differently. It helps you face reality.

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Infographic: What's the best small business funding for you?

Infographic: What's the best small business funding for you? | Pitch it! | Scoop.it

SmallBusinessHeroes.co.uk has put together this nifty comparison table with the key considerations for each form of funding.

To view the infographic in detail, click on it on click on the title.


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Marc Kneepkens's insight:

Maybe a little over simplified, but this infographic gives a basic understanding of different funding methods. Good overview to help you make up your mind.

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20 Practical Tips For A Great Business Plan

20 Practical Tips For A Great Business Plan | Pitch it! | Scoop.it

Have you started a new business, or are you contemplating finally launching that venture that has been on your mind for a long time?  If you want to succeed you’ll need a plan.

You don’t need a fancy business degree to be successful, but you do need vision, determination, organization and hard work.  A functional business plan is a good place to start.  This article will give you 20 “practical tips” that will start your business off on the right path.

To read the full article, click on the title.


Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Via Daniel Watson, Marc Kneepkens
Marc Kneepkens's insight:
Great insights. Well worth reading, highly recommended,
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Alwin Samayoa's curator insight, February 7, 2014 10:06 AM

"Maximize your profit payoff and the speed of completion on every project you undertake to grow your business"

Alwin Samayoa's curator insight, February 7, 2014 10:09 AM

"Maximize your profit payoff and the speed of completion on every project you undertake to grow your business"

Sigrid de Kaste's curator insight, February 8, 2014 4:29 AM

Yes you need a plan...one you can work with, not one that sits in the bottom of your draw...take a look and digest these 20 tips

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Strategies: 7 keys to crowdfunding success

Strategies: 7 keys to crowdfunding success | Pitch it! | Scoop.it
Want to raise money for your new product, company, or creative project? A hot new option, crowdfunding, has all kinds of people — entrepreneurs, small-business owners, inventors, investors, artists, speculators and crooks — excited.

For many years, entrepreneurs and aspiring small-business owners had only two options when seeking investors.They could beg financing from a small group of those closest to them, what's referred to as friends, family, and fools. Or if they had a truly promising concept, they might be lucky enough to raise money from angel investors or venture capitalists.

To read the full article, click on the title.


Get your Free Business Plan Template here: http://bit.ly/1aKy7km

Marc Kneepkens's insight:

Good intro to the Crowdfunding concept. Pitching your idea or startup business is a bit different than pitching it to professional investors. Take a look at the 7 keys here to get a better understanding.Want to get more in depth information? Check out this video presentation, very affordable and high quality information: 'Crowdfunding formula.': https://growthink.infusionsoft.com/go/newmoneysource/gt4045/

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28 Mistakes Startups Make When Pitching To Investors

28 Mistakes Startups Make When Pitching To Investors | Pitch it! | Scoop.it
As a venture capital and angel investor who has heard many pitches, I’ve compiled a list of mistakes and things to avoid if you are an entrepreneur seeking angel or venture financing.


Entrepreneurs from early stage startups have to pitch to investors to raise financing, and many entrepreneurs are inexperienced or terrible at making the presentation. As a venture capital and angel investor who has heard many pitches, I’ve compiled a list of mistakes and things to avoid if you are an entrepreneur seeking angel or venture financing.

Mistake 1: Sending me your executive summary or business plan unsolicited

Investors routinely discard or don’t read unsolicited emails. They get hundreds if not thousands of such emails, and they can’t spend the time sifting through them all to find that diamond in the rough. But what they will pay attention to is a referral from someone in their network — a lawyer, an entrepreneur from one of their portfolio companies, or a fellow venture capitalist.

Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Mistake 2: Pitching me your company unless it’s clear that you are in a space I am interested in

Some investors only care about biotech. Or mobile apps. Or clean tech. Or Internet and digital media. Do your homework first before trying to pitch me to make sure your company is in my sweet spot.

Mistake 3: Giving me a 50-page business plan to review

I don’t have the time to review a 50-page business plan up front to decide whether it’s worth taking a meeting or following up. Give me a 2-3 page executive summary and maybe a PowerPoint deck.

Mistake 4: Not showing me why the market opportunity is big

Most investors are looking for businesses that can scale and become meaningful. So make sure you address this issue right up front as to why your business can really become big. Don’t present any small ideas. If the first product or service is small, then perhaps you need to position the company as a “platform” business allowing the creation of multiple products or apps. I will want to know the actual addressable market and what percentage of the market you plan to get over time.

Mistake 5: Coming in with your team to a pitch meeting, but only have the CEO speak

Investors want to know that you have a good team. Only having the CEO speak at a pitch meeting is a mistake. How will the investor gauge whether the other team members are any good if they don’t hear them speak? And please don’t have the team members contradict themselves.

Mistake 6: Telling me you don’t have any competition

Telling me you have no competition likely says you are unrealistic or naive. Of course you have competition, whether direct, indirect. or someone who provides a substitute solution. And your analysis of your competitors will show me you have an understanding of the market.

Mistake 7: Showing me uninteresting or unrealistic projections

If you show me projections for the company to become $5 million in revenue in five years, I will have little interest. I want to invest in a company that can grow significantly and become an exciting business. Alternatively, if you show me projections where you are at $500 million in three years, I will just think you are unrealistic, especially if you are at zero in revenues today. Avoid assumptions in your projections that will be difficult to justify, such as how you will get to a 400% growth in revenue with only a 20% growth in operating and marketing costs.

Mistake 8: Asking me to sign an NDA before you will share information with me

Most investors have a policy not to sign non-disclosure agreements. Why would you want to put a hurdle in front of being able to connect with an investor? And if you have something highly confidential, don’t share it with me.

Mistake 9: Giving me confusing or bad answers to my questions

Entrepreneurs should practice their pitch with friends and advisors before presenting to an investor. You need to be prepared to give crisp answers to questions. You have to anticipate the difficult questions you may get. Telling me that “you will get back to me with an answer” seldom leaves a good impression. If I am asking you questions, that’s a good sign that I am engaged. So do your best to answer them right away. Don’t evade the hard questions or tell me that you will get to it later in the presentation. I want to see if you can think on your feet. Expect to get interrupted during your presentation.

Mistake 10: Not telling me what problem your business solves

What problem does your business solve? Does it matter at all?


Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Mistake 11: Presenting unrealistic valuation expectations for your company

If you tell me you want a $100 million valuation when you started the business three weeks ago, or don’t have much traction yet, the conversation will likely end very quickly. Often, it’s best not to discuss valuation in a first meeting other than to say you expect to be reasonable on valuation.

Mistake 12: Giving me clichés

Phrases to avoid:

  • “All we need is 1% of the market” (unlikely you will get that)
  • “We will get huge viral usage” (unless you show me early traction, that will be difficult to believe)
  • “This product will market itself” (no, it won’t)
  • “Google will want to buy us” (maybe, but not likely)
  • “Our projection numbers are conservative” (just once I would like to hear an entrepreneur say, “Our projections are wildly optimistic”).

Mistake 13: Having more than 20 slides in your PowerPoint deck

You will have an hour at most to make your pitch. So overloading your PowerPoint deck with too many slides will cut into the crispness of the presentation, and you won’t have time to get to the slides at the end of your deck. If an investor is interested, you can always provide more detailed information later.

Mistake 14: Forgetting to highlight your team’s experience and credentials

Many investors consider the team behind a startup more important than the idea or the product. The investors will want to know that the team has the right set of skills, drive, experience, and temperament to grow the business. I want to be shown all of this together with a passion to do something truly great and unique. Anticipate these questions:

  • Who are the founders and key team members?
  • What relevant domain experience does the team have?
  • What key additions to the team are needed in the short term?
  • Why is the team uniquely capable to execute the company’s business plan?
  • How many employees do you have?
  • What motivates the founders?
  • How do you plan to scale the team in the next 12 months?

Mistake 15: Not paying attention to detail

Make sure your presentation doesn’t contain typos or inconsistencies. Present a well-written, visually interesting presentation. Include page numbers on each slide so I can easily reference a specific page. For your legal protection, put a copyright notice at the bottom and add the phrase “Confidential and Private.”

Mistake 16: Not doing a demo
A demo is worth a thousand words. Show me a prototype or working demo of your product, app, or website. It will give me a better sense of what you are trying to do. Make sure it works well and isn’t buggy. Impress me with its look and feel.

Mistake 17: Not doing research on the investor and his portfolio

Showing some awareness of my background and the companies I am invested in will facilitate parts of the conversation, and also shows you have done some advance due diligence for the meeting.

Mistake 18: Not looking at other pitch decks and executive summaries

Looking at other pitch decks and executive summaries can help you improve your own. You can ask your lawyer or entrepreneur or angel investor friends for samples. Plenty are available on the Web, such as the deck for Mint.com, a startup that sold to Intuit for $170 million.

Mistake 19: Not understanding customer acquisition costs and long-term value of the customer

I will be interested in your understanding of customer or user acquisition issues. What costs will you incur to acquire a customer? What will be the likely lifetime value of the customer? What channels will you use to acquire that user or customer? What marketing costs will you incur? What is the typical sales cycle between initial customer contact and closing of a sale? Not being prepared for those types of questions will hurt my perception of how well you have thought out your business plan.

Mistake 20: Not understanding the potential risks to the business

I will want to test what you see are the risks to the business. I want to understand your thought process and the mitigating precautions you might take. There inevitably are risks in any business plan, so be prepared to answer these questions thoughtfully:

  • What do you see are the principal risks to the business?
  • What legal risks do you have?
  • What technology risks do you have?
  • Do you have any regulatory risks?
  • Are there any product liability risks?
  • What steps do you anticipate to mitigate such risks?

Mistake 21: Not being able to explain the key assumptions in your projections

In order for me to believe your financial projections, I will want you to articulate the key assumptions and convince me they are reasonable. If you can’t do that, then I won’t feel you have a real handle on the business. I will push back on the numbers in the assumptions and I will want you to have a cogent, thoughtful response.

Mistake 22: Not articulating why your product or technology is differentiated from a competitor

I will want to know why your product or technology is better than or different from what is already out there. You can assume I will know about competitive products or technology, so you need to have a good response. For example, “We are different from Instagram in three important ways: (1) we are easier to use; (2) we have better editing functions; and (3) we are monetizing earlier than Instagram was able to.”

Mistake 23: Not being able to articulate a coherent marketing strategy

Just because you build something great doesn’t mean it’s going to sell or get user adoption. So I will care about your plans to market your product or service. What outlets are you going to use? How can you cost-effectively get to prospective customers? How will you use social media, such as Facebook, Twitter, LinkedIn, Pinterest, etc.? Will you do content marketing and put sponsored posts on sites like BusinessInsider.com, Forbes.com, and AllBusiness.com? Will you do search engine marketing and can you show it will be productive? What steps will you take to get some rapid sales or adoption of your offering?

Mistake 24: Not telling me what early buzz or press you have gotten

Don’t forget to show me any early buzz or press you have received, especially from prominent sites or publications. Feature the headlines in a slide on your deck. List the number of articles and publications mentioning you.


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Mistake 25: Not telling me what traction or customers you have already gotten

One of the most important things for me will be signs of any early traction or customers. If you have an app, how many downloads have you gotten and how many additional ones are you getting a week? Have you gotten any brand-name customers if you are a software company? How can the early traction be accelerated? What has been the principal reason for the traction? Show me how you can scale this early traction.

Mistake 26: Being unable to tell me how you will invest my investment capital and how long it will last

I will absolutely want to know how my capital will be invested and your proposed burn rate (so that I can understand when you may need the next round of financing). It will also allow me to test whether your fund-raising plans are reasonable given the capital requirements you will have. And it will allow me to see whether your estimate of costs (e.g., for engineering talent, for marketing costs, or office space) is reasonable given my experiences with other companies.

Mistake 27: Not selling me on your intellectual property 

For many companies, their intellectual property will be a key to success. Investors will pay particular attention to your answers to these questions:

  • What key intellectual property does the company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
  • What comfort do you have that the company’s intellectual property does not violate the rights of a third party?
  • How was the company’s intellectual property developed?
  • Would any prior employers of a team member have a potential claim to the company’s intellectual property?

Mistake 28: Not explaining the product or service well enough

The entrepreneur must clearly articulate what the company’s product or service consists of and why it is unique, so expect to get the following questions:

  • Why do users care about your product or service?
  • What are the major product milestones?
  • What are the key differentiated features of your product or service?
  • What have you learned from early versions of the product or service?
  • What are the two or three key features you plan to add?
  • How often do you envision enhancing or updating the product or service?

Conclusion

Not all of these mistakes are fatal. And as you practice and make more presentations to advisors and investors, you will learn what they care about and what doesn’t resonate with them. So make sure to adapt your PowerPoint deck, Executive Summary, and presentation from these learnings.

Copyright ©2014 by Richard D. Harroch. All Rights Reserved.


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Marc Kneepkens's insight:

From the perspective of an investor: why did they not read your business plan or respond to your email? Excellent information.

Remember my article a while ago? It's still on my site: http://www.business-funding-insider.com/investment-proposal.html

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How to Distinguish Your Startup in the Competitive Funding Environment

How to Distinguish Your Startup in the Competitive Funding Environment | Pitch it! | Scoop.it
Over the past few years, it’s become harder to get seed or venture capital funding as a startup. Since the recession, the number of VCs has shrunk by 50%, and people are more and more hesitant to invest where they perceive risk.

As a result, fewer new companies are being funded. For the startups that can catch the eye of investors, however, things look good. Even though fewer startups are being invested in, those that do find investors tend to get much more capital now than previously.

Venture capitalists and angel investors are looking for companies they perceive as low-risk, high-reward investments. That means they need to see your company’s potential clearly, connect with your product, and feel comfortable with the risks involved. And even though YOU know your company is worthwhile, in order to snag those much-sought-after investment dollars you’re going to have to convince would-be investors of that.

So how can you do that?

1. Show a High Potential

Demonstrating potential is twofold: investors are going to be looking both at you and at your company.

Remember that VCs are ultimately investing based on how much faith they have in your potential to succeed. Show them your drive and complete dedication. If you are a startup veteran, speak to your past successes and explain why you know you can do it again. If this is your first startup endeavor, show why you have both the experience and passion to succeed based on past projects or work.

You can also show your potential by branding yourself. Use Quora, LinkedIn and Google+ to establish yourself as an expert in the specific industry or field you plan to enter with your company. Join discussions, answer questions, and show your general level of expertise. Your Twitter and Facebook should also reflect a high level of professionalism, so be sure to clean it up if you haven’t already.

Show potential for your company by generating buzz around your idea. Pitch your startup to media publications, bloggers and journalists. When VCs and angel investors see that others are excited about your idea, it clearly demonstrates the traction of that idea.

2. Pitch the Product

First off, make sure you’ve got a well-thought-out description of your startup. Think about if you were to have to tweet what your company does and why it’s unique — would you be able to say it in 140 characters or fewer? Work on fine-tuning your description until you can get it to this point. A concise, clear way of explaining your product is much more memorable and packs more punch than a longer explanation.

Once you have a concise description, you can then clearly explain why they should choose you and your product. What burning problem are you solving that hasn’t already been solved before? Detail how you will succeed where others haven’t, and why your idea is better, unique, cheaper than previous attempts or existing solutions.

A great way to make sure you’re pitching your company in a way that distinguishes it from competitors is to listen to your friends. If they’re constantly comparing your company to something that’s already out there, focus on being clear about what it is that makes your product different and why you’re not just creating a slightly different iteration of something that exists. In that same vein, know who your competitors are and have a deep understanding of their products and business models. You have to understand them in order to come out first.

As important as knowing your competitors is showing that you know your audience and the market that exists for your product. Provide a detailed analysis of your audience members, demonstrating that you know your potential consumers’ behavior inside and out and that that group will be able to generate sufficient and significant profit. Make it clear that you’ve done your homework and researched them thoroughly.

3. Alleviate Concern Over Risks

The best defense is a good offense. Anticipate the hesitations investors are likely to have before investing in your company and address them head-on. Analyze those risks and clearly explain why they won’t materialize into problems. Make sure to show how you’re already prepared to address and deal with the risks.

You will also comfort investors about the low-risk of investing in you by showing them that you’re far-enough along. Before you begin looking for funding, be able to demonstrate that you’re at a stage in the development of your idea where it’s tangible. If you can make it clear that your idea is already becoming a reality, and all that’s left — the very last step before you can launch it — is capital, then they’ll be much more eager to invest in you.

If you focus on creating a presentation for potential investors that demonstrates your startup’s potential, clearly and effectively explains the product and the market that exists for it, and shows it is low-risk, you’ll be able to stand out in the challenging funding climate.

Jul 26, 2014 - Fernando Cuscuela for the National Edition



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Marc Kneepkens's insight:

Good points. Value, Pitch, Risk.


More info at http://www.business-funding-insider.com/

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How Do You Know If A Startup Will "Make It"?

How Do You Know If A Startup Will "Make It"? | Pitch it! | Scoop.it

Your assumptions about a company's chances against the competition are probably incorrect. A company called YouNoodle is proving it with data..

With YouNoodle’s newest data capabilities, it plans to help startups everywhere better understand how they measure up in the greater startup world. “Everyone these days can do an app or do a little tech, web, mobile product. It’s the enablement of tech startups everywhere that will allow new ecosystems,” says Kolind.

To read the full article, click on the title or image.



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Marc Kneepkens's insight:

This tool will be used by investors and VC's. Startups better be aware of it.

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How to calculate the equity split between co-founders in a startup

How to calculate the equity split between co-founders in a startup | Pitch it! | Scoop.it

George Deeb is the Managing Partner at Chicago-based Red Rocket Ventures, a startup consulting and financial advisory firm based in Chicago. You can follow George on Twitter at @georgedeeb and @RedRocketVC.

 

There are a lot of variables to go into calculating a fair equity split a startup team. These key factors must consider each employee’s role(s) within the company, the compensation they receive for their work, the people investing in the company, and the people behind the idea of the company. Let’s tackle each of these points below.

To read the full article, click on the title.


Is your Business Plan working? Is it Succeeding? http://bit.ly/1iHk8zP


Via Russ Merz, Ph.D.
Marc Kneepkens's insight:

Starting out on the right foot is extremely important. Sit down and agree, before you get into huge disagreements.

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Russ Merz, Ph.D.'s curator insight, November 20, 2013 7:28 PM

Discusses four factors to take into consideration when determining equity split among venture partners.

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Using Mind Control to Raise Startup Cash | Nir and Far

Using Mind Control to Raise Startup Cash | Nir and Far | Pitch it! | Scoop.it

Raising money for a startup is like sex. The more unattainable you seem, the better your chances of getting lucky. Also, the more interest you receive from others, the more appealing you will become to everyone else.

This essay discusses two psychological principles at work in an entrepreneur’s fundraising efforts: social proof and scarcity. Nir has discussed both in previous blog posts regarding product design. In this article, I’ll take you through the mechanics of each, and show you how entrepreneurs use these tools to close their rounds.

To read the full article, click on the image or title.



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Marc Kneepkens's insight:

About Social Proof and Scarcity. Call it Mind Control if you like, I would  say Psychology.

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Designing a Recurring Revenue Model Will Help Attract Capital

Designing a Recurring Revenue Model Will Help Attract Capital | Pitch it! | Scoop.it
One of the first things that a venture capitalist looks for in assessing an investment opportunity is the revenue model of the business.

More specifically, they are looking for the frequency of that revenue stream, and whether or not it is recurring and easily predictable.

The rationale being investors prefer businesses that maximize the lifetime value of their consumers, and get maximum leverage and returns on the initial marketing cost of customer acquisition (which they are funding).

To read the full article, click on the image or title.



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Marc Kneepkens's insight:

One simple tip. If you can make this happen you will have a successful business.

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How to Tell if an Accelerator Is Right for Your Startup - Tuts+ Business Article

How to Tell if an Accelerator Is Right for Your Startup - Tuts+ Business Article | Pitch it! | Scoop.it

In this guide, discover the evaluation process, and key considerations, to determine whether an accelerator is a good fit for your startup. If it is, insdide are some great tips on how to increase your chances of getting accepted.

With the success of Mark Zuckerburg and many other entrepreneurs, forming a startup is no longer limited to college students looking to change the world. The technology is available today, if you have the right idea and are determined, you can build the next big thing.

Unfortunately, the journey from idea to marketable product is challenging. For a rookie entrepreneur building your network and knowing how to determine if someone is taking advantage of you are two of the toughest lessons for anyone to learn.

In light of the increased interest in entrepreneurship, many investors, businessesand other relevant partieshave begun forming accelerators as a way to help aspiring entrepreneurs rapidly execute their ideas in sheltered environments. Although the concept is novel and in many cases entrepreneurs greatly benefit, accelerators aren't for everyone.

To read the full article, click on the image or title.


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Marc Kneepkens's insight:

It's a big decision to go for the accelerator option. This article gives good insight in the pros and cons. If you're a startup looking for leverage, read it.

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11 Fundraising Ideas for Entrepreneurs Who Don't Want VC Money

11 Fundraising Ideas for Entrepreneurs Who Don't Want VC Money | Pitch it! | Scoop.it
11 entrepreneurs share their advice on fundraising without relying on venture capital.

Accepting cash in the form of VC funding is not the right choice for all entrepreneurs or business models. Although money is always tight, some startup founders decide that they want to go about fundraising a different way—one that doesn't involve giving away big pieces of the equity pie.

Eleven entrepreneurs from the Young Entrepreneur Council (YEC) offer some tips for raising money without relying on venture capital:

To read the full article, click on the image or title.



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Marc Kneepkens's insight:

Many good ideas and solutions you never thought of.

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albert oaten's curator insight, June 19, 2014 3:19 PM

Scrappy alternative  #startup #seed #fundraising without venture capitalists

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StartupVitamins: Quotes for Startups, Entrepreneurs & Offices

StartupVitamins: Quotes for Startups, Entrepreneurs & Offices | Pitch it! | Scoop.it

Start your business by doing every job yourself. It’s the only way to learn what you need and who will then be best able to do it for you. -Danielle Newnham, Mad Men of Mobile


Startup Vitamins provides inspiration and motivation for startups - and supports them too!
Startup Vitamins is a recently launched project, which offers inspiring posters with sayings from industry leaders such as Mark Zuckerberg, Steve Jobs, Jason Fried, and more.

Profit from sold posters goes towards supporting various organizations, which develop and bring value to the startup community. Currently profits are split between StartupWeekend and Garage48, both of which help ideas come to life around the world.



See more Quotes? Want it in your office? Order a Poster, Canvas, Mug, Sticker or Framed Print from StartupVitamins . Click here, support Startups, motivate yourself.

Marc Kneepkens's insight:

Start your business by doing every job yourself!

Great quote. Don't think that you can be a CEO of a multi-million/billion dollar company without knowing how every detail of your business works. Go through the process.

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Why Venture Capital Investors Should Want to See Your Five Year Financial Proforma - Rockies Venture Club

Why Venture Capital Investors Should Want to See Your Five Year Financial Proforma - Rockies Venture Club | Pitch it! | Scoop.it
A good venture capital proforma should show all years from present through exit to demonstrate your ability to SCALE, justify VALUATION, and plan for EXIT.

Many entrepreneurs and VCs alike are hesitant to produce a proforma for more than two years out into the future.  They claim that it’s impossible to know what will happen and that the third year and beyond are “just numbers.”   While I would agree that nobody expects a startup to perform according to its projections, I am heartily in disagreement with the claim that a five year proforma doesn’t tell us anything.

To read the full article, click on the title.

Get your Free Business Plan Template here: http://bit.ly/1aKy7km




Via Marty Koenig
Marc Kneepkens's insight:

Learn to think like an investor is my advice to very Startup pitching to either an Angel Investor or a VC. This is another good article explaining this. Remember that financial projections are an essential part of your business plan.

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Marty Koenig's curator insight, February 12, 2014 3:15 PM

Totally agree with Peter. the numbers going out 5 years show the savvy investor that you are:

1. considerate of what they are used to seeing

2. have thought well beyond the possible about how to get there

3. that you believe you can scale and can put that on paper



And the rest of what Peter says about valuation,investor return, and exit strategy prove that you know what you are talking about. 


So many entrepreneurs think it's all about the PRODUCT PRODUCT PRODUCT. Investors don't really care that much about the product. They care about the people they are investing in. and if the people aren't willing to the the energy and thinking into a 5-year projection are they really the type of people a VC wants to invest in? 


This, I know first hand.  

Marc Kneepkens's curator insight, February 13, 2014 12:11 PM

Another great article by an investor.

Jose Gonzalez's curator insight, February 14, 2014 3:37 AM

Ok...........Thanks

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Why Startups Seeking Funding Should Use Content To Build Their Credibility

Why Startups Seeking Funding Should Use Content To Build Their Credibility | Pitch it! | Scoop.it

Today, venture capital (VC) is more democratic than ever. Investors are becoming increasingly sophisticated, and geography is no longer a constricting factor.


Lower barriers, however, create stricter filters. With so many startups jockeying for funding, the Internet also enables investors to make snap judgments. Therefore, if you’re looking for funding, you can be sure that your online presence will be the subject of intense scrutiny.What do investors want to see?


According to Edith Yeung, founding partner at RightVentures, there are two main criteria: the passion of the entrepreneur and the potential of the startup.


What better way to convey passion and potential than with well-crafted content? Yeung says that, with strong content, you can “take a stand publicly…addressing issues that [investors] care about in a timely manner.”...


Via Jeff Domansky
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Jeff Domansky's curator insight, February 9, 2014 3:55 PM

The case for content marketing - well said.

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How to nail your seed round

Primer on raising seed capital for first time and experienced startup founders and employees.

Click on the title to see the Slideshare deck.


Get started now: Get your Free Business Plan Template here:  http://bit.ly/1aKy7km



Via Guillaume Decugis
Marc Kneepkens's insight:

This is a great deck including all the steps of raising seed funding for a startup. It's very detailed, and presented by a venture capitalist. It's the most complete step-by-step guide that you'll find. Of course, guidelines like this are not going to create it for you, but at least, you get some idea of the process and what it involves.



Read more about funding at www.Business-Funding-Insider.com

  • Tools and articles to help get funded
  • Free Listing of your Investment Proposals & Crowdfunding Campaigns
  • Learn what investors are looking for
  • Deal Flow
  • Free Business Plan Template
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Guillaume Decugis's curator insight, February 3, 2014 5:02 PM

Lots of very useful insights in that must-see very detailed slideshare by Steve Schlafman from RRE Ventures.


I wish it described a little more the conditions that a startup need to reach to become interesting for VCs. To build on slides 58-60, I would add:


1. Team: there's little hope in seeing seed VC's with the hope they'll help you complete it.


2. Growth model: traction is cool but mean different things to different people. I'd rather talk about a growth model that explains how the company will grow fast and that is backed by min 8-12 weeks of solid data. 


3. Market ambition: while business plans are mostly useless at seed stage, it's important in my opinion to show there are adressable markets within reach if #2 works well to justify raising from VC's and providing them with a return.