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Via The Fish Firm
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By Jessica Livingston
We’re excited to launch Female Founder Stories, a collection of interviews with 40 of Y Combinator’s female alumnae. We asked them about things like how they got started, their experience at Y Combinator, their experience as female founders, and what they wish they'd known when they were younger. As you'll see, their answers are fascinating, both individually and in their variety.
This is the biggest collection of interviews with female startup founders I've seen in one place, and as a result we have an unprecedented opportunity to notice patterns in their experiences (and just as interesting, where there aren't patterns).
One of the most consistent patterns is how many founders wished they'd learned to program when they were younger. Some wished they'd even known it was an option, and many others knew it was an option but were either intimidated or felt they’d somehow missed the window. "Don't opt out of computer science because you think you are behind," one founder said. "You probably aren’t."
We got an interesting variety of responses when we asked the women whether being a female was advantageous or disadvantageous in their roles as founders. Some felt they had been harmed but as many felt it was an advantage. Interestingly, many said it got them attention for being unusual, and that they'd used this to their advantage. Others felt that being female did impose some barriers, but didn't let it get them down. "Given how hard it is to be a founder (male or female)," one said, "gender disadvantages are probably just a rounding error."
One surprise was how varied the founders’ backgrounds were. I know all these women and even I was surprised how varied their paths to Y Combinator were. If you wanted evidence contradicting the myth that YC only funds one type of founder, you could not do better than read these interviews.
Not surprisingly, most of the women were domain experts solving a problem they themselves had. That's something that tends to be true of successful founders regardless of gender.
When I started Y Combinator back in 2005, I was one of a tiny minority of women in the venture business, and from the start I've made sure YC had an environment that is supportive of women. It wasn't even a conscious decision. To the extent there was one partner in charge of YC's environment, it was me, and as a woman myself I would not have tolerated anything else. And as YC has grown, so has the number of female partners. Now there are four of us and we are not tokens, or a female minority in a male-dominated firm. At the risk of offending my male colleagues, who will nevertheless understand what I mean, some would claim it's closer to the truth to say that that we run the place. As YC funds more and more startups, Kirsty, Carolynn, Kat, and I are dedicated to maintaining an environment where women feel welcome and can succeed.
The number of startups we've funded with a female founder has grown from a trickle when we first started to about 19% in 2014. In the most recent batch (W15), we asked about gender on the application form for the first time. The percentage of startups we accepted with female founders was identical to the percentage who applied. (And this happened organically; we didn't check the numbers until after.) Which implies the percentage of female founders we fund will increase in proportion to the percentage of female applicants.
There are two ways I think YC can have the most impact in increasing the number of female founders. First, we need to continue to do what we’ve always done: to help individual female founders’ startups succeed. Those women will then become role models who inspire other women to make the leap and start startups too. To serve as role models they need to be visible, so we're also focusing on showcasing YC’s female alumni through interviews like these and events like our Female Founders Conference.
I said at the first Female Founders Conference last March that I thought 2014 would be the tipping point for female founders. I still think I’m right, and our hope is that these interviews will be part of what makes things tip-- that they will both inspire more women to start startups (and please apply to YC!) and also inspire some who already have started to keep going.
Startups are hard. They are not the right thing for everyone. But what makes them the right thing for you is whether you are driven enough, not what gender you are, and that's one of the clearest patterns in these interviews.
Save the date: Y Combinator's second annual Female Founders Conference will be held in San Francisco on February 21, 2015.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
"The number of startups we've funded with a female founder has grown from a trickle when we first started to about 19% in 2014. In the most recent batch (W15), we asked about gender on the application form for the first time. The percentage of startups we accepted with female founders was identical to the percentage who applied. (And this happened organically; we didn't check the numbers until after.) Which implies the percentage of female founders we fund will increase in proportion to the percentage of female applicants."
In Greek mythology, she is the goddess of war and wisdom. In Philadelphia's University City, Athena is a more earthly vessel, taking shape to make warriors of female entrepreneurs.
DreamIt Athena is a rare business accelerator, exclusively for companies with at least one female founder.
Announced this month and accepting applications until Dec. 8 at https://app.wizehive.com/appform/login/2015philly, the program to help women turn their ideas into fundable businesses with growth potential will launch in February with its first cycle of participants, a minimum of four companies. A second cycle is planned for spring 2016.
To qualify, applicants must have technology-based products or services with large market opportunity.
The program's name seemed a natural, said Karen Griffith Gryga, managing partner of DreamIt Funds, the equity arm of DreamIt Ventures, a top-tier accelerator that has launched 168 companies since its start in 2008. Of those, 40 were companies with female founders.
"Athena is the Greek goddess of wisdom, courage, inspiration," Gryga said. "And whenever you're doing a start-up, you've got to have tremendous inspiration and vision, but also fortitude and courage. It's not easy to launch and build and develop a start-up."
Especially for women.
"We just felt it was time to do something about it," she said. "The answer is not more networking events."
Timing proved fortuitous. In the spring, DreamIt applied for funding from Pennsylvania's "Discovered in PA, Developed in PA" grant program and was approved in August for $491,000.
That's enough to finance two three-month cycles. The plan is to continue afterward, "but with a more commercial partner," said Gryga, who will oversee the Athena program with Patrick FitzGerald, managing director of DreamIt Ventures' Philadelphia program.
"There's just been an outpouring of support for it," said Gryga, who plans to conduct a national search for female CEOs and serial entrepreneurs willing to serve as mentors and inspiration.
To fill the post of project manager, DreamIt Athena's creators have hired a local woman described by a peer as "a real connector in the Philadelphia ecosystem" of female entrepreneurs.
Archna Sahay, a native of India now living in Center City, started the Female Founders Network in February to help women in business find one another.
A finance major at Virginia Tech, Sahay, 35, went on to work as a portfolio analyst and investment analyst at Wachovia and its successor, Wells Fargo, and then worked in the brokerage business for Merrill Lynch and Morgan Stanley.
Sahay left Morgan Stanley on Sept. 30 to focus on the Female Founders Network. But in just weeks, she had a job offer from DreamIt that seemed like divine intervention.
"I'm very spiritual," she said. "I always like to see God's hands in things."
As a believer that financial independence for women is "one of the most important things you could work on," and as a big sister who wants "to leave the world in just a slightly better place" for two younger ones, Sahay said the chance to help build what was believed to be the first female-oriented program by a top-tier accelerator feels like "what I was meant to do."
Her 12 years in finance - and some recent studies - left her convinced of the need for DreamIt Athena. Among those studies was a report by professors of Babson College in Massachusetts, "Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital."
It found, in part, that though early-stage investment in companies with a woman on the executive team has tripled to 15 percent from 5 percent in the last 15 years, 85 percent of all venture-capital-funded businesses have no women on the executive team.
One reason for that, Sahay said, is another troubling finding by Babson: The total number of women partners in venture-capital firms has declined since 1999, dropping to 6 percent from 10 percent.
"There aren't enough women on the other side of that table," Sahay said.
When it comes to successfully pitching to investors, entrepreneurs need to connect with them. The sex divide is a serious obstacle, said Holly Flanagan, managing director at Gabriel Investments, a Philadelphia early-stage investment group.
"The challenge for women is they tend to solve problems that are faced by women," Flanagan said. "Because the majority of investors continue to be men, the advice I always give female founders is they have to articulate their story in a way that helps [all] investors feel the pain they are out to solve."
That message will be driven home at DreamIt Athena, Sahay said.
Among others applauding the effort is Yasmine Mustafa, founder of Roar for Good L.L.C., a young self-defense technology company.
"With greater inclusiveness," Mustafa said, "the opportunity to support the growing number of women founders creates even more possibilities for delivering transformative solutions - not to mention establishing more female role models, especially in predominantly male industries like technology."
Marc Kneepkens's insight:
Another great initiative for women in technology and startups
Hunter Walk is a popular investor, which means he's had to refine his process for identifying startups he wants to work with. But just one question stands above all the others.
H unter Walk has made a career for himself separating the wheat from the chaff. The former Google product manager who ended up leading YouTube's consumer product team is now a partner at Homebrew, a seed-stage investment company, based in San Franscisco.
But time is money, as the saying goes, and with a reputation like Walk's, the potential future partners are plentiful. In a blog post earlier this week, Walk shared the one question he relies upon more than any other to accelerate the "would we work well together" conversation. Based on his company's portfolio, only six companies have passed the test, one just yesterday.
"One question which matters to me is the "why" of your startups, especially as it relates to your longevity as a founder," he wrote. "The most difficult question for some founders is 'why do you want to spend 10 years of your life working on solving this problem.'" He explained that most startups don't even make it this long, so a gauge of the founder's commitment can make or break a deal.
At Walk's current company, named after the Homebrew Computer Club of the 1970s that helped spawn Apple computers and other companies, six startups have passed the test: Layer, an Internet communications company, Plaid, a banking API company, Shyp, to ship goods, theSkimm, an e-newsletter, UpCounsel, for legal advice, and yesterday, Q, an office management company that announced a seed round.
Six other unannounced startups are in Homebrew's portfolio, ranging from a debit-card alternative to a mobile app for mental health.
Walk, was also a founding member of the product and marketing team at Linden Lab, the creators of Second Life, which in 2011 generated$100 million revenue, and in June celebrated its 11th birthday, and is currently undergoing a revamp.
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Marc Kneepkens's insight:
Essential question. Ask yourself and find out if what you're doing is right for you.
You need to show why an investor should back you, and there are a number of traits that successful investees should show during the course of their pitch.
When it comes to a winning investment pitch, the entrepreneur is the most important person in the room. I am a passionate believer that people make businesses a success, so when looking for investment, keep in mind that you are being evaluated just as much as the 100 page business plan you may have produced.
From start to finish you need to show why an investor should back you, and in my experience there are a number of traits that successful investees should show during the course of their pitch.1. Confidence
Your first few minutes can set the tone for the rest of the pitch so make the right impression. The small details such as your outfit, your handshake and the amount of eye contact you make are actually hugely important. Remember if you don’t seem like you believe in your business proposition, investors certainly won’t. Never appear apologetic for being there; you need to convey total belief and passion.2. Commitment
I don’t believe you can be a part-time entrepreneur and you’re highly unlikely to receive funding if you say you’re only putting three days a week into this. It has to be all or nothing – a business is like your child and you need to be completely dedicated. What I will always ask entrepreneurs is how much time - and if they’re a start-up, money - they’re putting into the idea. The more commitment you show, the more likely you are to get what you are looking for.3. Creativity
Although investment pitches are a serious business, I do like to see an element of creativity. You could be pitching to somebody who has seen several pitches that day alone – earlier this year when I was considering applications for Recruitment Entrepreneur I saw 15 in a week. With that in mind you want to stand out from the pack. Something to consider is giving them a copy of your presentation on a USB stick that has your logo printed on it. Not only does this mean they can look at your slides in further detail, but it ensures you will probably be the business they remember most.4. Clarity
Speaking of your presentation, what you don’t want is several slides filled with graphs, pie charts and jargon. Crucially, never allow yourself to be boxed in by what is on the slides. People buy from people so you need to be engaging, direct and to the point. If within 10 minutes I still don’t have a clue what your business is about, I will then start to wonder whether your customers will. Keep things simple; you can go into the small print further down the line.5. Credibility
This is possibly the most important point and there are a number of things you need to do to demonstrate your credibility.
Your actual business idea is what you will be judged on, but before you’ve even got into the nuts and bolts of it, you need to demonstrate how well you know the investor in front of you. These days there is no excuse for not having key information about the people you are pitching to, and if you can demonstrate this near the beginning of the pitch you get a firm tick in the box. I’m not saying you should know the entire balance sheet of the investor’s company, but why not talk to them about a recent deal they may have completed? This shows you prepared thoroughly and weren’t just wrapped up in yourself.
What also gives you credibility is having a team with you – ideally in person but at the very least on paper. This tells me that other people buy into your vision and your business. You cannot underestimate how much of a boost this provides to your chances of getting an investment – you’ve now gone from being a lone ranger to a backable team.
Finally, you will always be grilled on your numbers so you must have a complete handle on these. A pet peeve of any investor is somebody who is trying to play things by ear when it comes to things like turnover projections. Ensure you are realistic as well; investment is based on facts, not fiction, so don’t make big predictions with no solid evidence to back it up.
LinkedIn Influencer, James Caan, published this post originally on LinkedIn.
Marc Kneepkens's insight:
You can give information and data when pitching your venture to investors, but really, they are looking to figure out what your qualities are.
In the first half of this year, the level of venture-capital investment hit its highest quarterly mark since Q2 2001. Big M&A deals like WhatsApp, Oculus and Zillow have become prolific. And more and more companies are getting financing at eye-popping valuations.
For many startups, the hot venture-capital and exit markets mean an increase in deal leverage when negotiating with venture investors. [Editor’s note: Venture capitalists have noticed, and are trying to differentiate themselves.] As a result, founder-favorable terms are increasingly a part of formation and financing documents where they wouldn’t have been just a year or two ago.
The are several founder-favorable terms we’re seeing more frequently today. Not many companies or deals have all, or even most, of them. And choosing among them is usually linked to founders’ specific hot buttons. Regardless, all are worth considering, and often worth considering early.
More at http://snip.ly/cpQq
Marc Kneepkens's insight:
Creating a company structure and knowing what to do is extremely important right from the start. Excellent information.
The biggest reason startups get turned down by venture capital is they've got "crappy teams," said Peter Thompson, a private equity partner at OrbiMed one of the largest healthcare investment firms in the country.
Thompson spoke with some candor at a recent Q&A sponsored by J-Labs San Diego. Here’s what he said, edited for clarity:
Is there a sweet spot for deal size?
We usually stay within the $10 million mark, but some of the companies we’ve seed financed for much less than $1 million. The earlier stage a company is, the more exciting it has to be to generate investor interest from anyone.
Say we like your progress, or what’s going on in your company. If we feel like we can write a $100 million check, we can.
Regarding early stage companies, how important is IP?
It depends. Sometimes we’re betting on the IP that makes a company’s work proprietary, but sometimes it’s more about the intellectual capital.
There are not a lot of medical device companies left standing right now. Why did that happen, and what’s next?
The easy answer: The returns have been horrible. You have to wonder – are we in the midst of some sort of Machiavellian exercise, the design of which to stamp out medical device innovation? It’s been brutally effective so far.
In part it’s because the regulatory and reimbursement environments have changed. But one of the interesting things: When there was communication from the Institute of Medicine that asked, what if we figured out – in the clinic – whether these devices actually worked?
The device industry went batshit. “This is going to kill innovation,” they said. I’m a humble country doctor, and I look at the data out of some of these marketed devices – and I don’t know if they work.
As we look at devices, we have tended to go after the later-stage ones. We’re still not sure what getting on the market for a device in Europe even means. It’s better than not, I guess. If we go after earlier stage companies, we challenge and work with them, and figure out if what they’re doing actually works out for patients.
The VC model seems to be declining in therapeutic development. What are your thoughts?
I think it’s been a case of the strong getting stronger. We just raised a $740 million fund, but we’re turning lots of people away. I think there was an expansion that admitted a bunch of folks that generated a lot of capital in the sector, generating core returns, leading to LPs becoming very selective about where they put their money. But I haven’t found a significant challenge in syndicating our deals.
This is a special, special sector. You can always look at folks building the next great Instagram, but it’s in our sector that you have to do something with tangible, demonstrable benefits to patients to see a return. That ain’t bad.
What are the different steps required to present to your board?
As you think about getting in front of our board, bear in mind that there pretty much isn’t anything OrbiMed hasn’t seen. So there’s no question that teams and individuals are very important. No question that a serial entrepreneur that has already made money is more appealing to the venture community. So, at least find mentors that are serial successful entrepreneurs. Network.
People always say, “don’t take NO for an answer.” But sometimes “no” is the answer. So you have to think about why that is – and adapt.
What’s the biggest reason venture capitalists don’t invest in a healthcare startup?
If a startup hasn’t thought through the clinical aspects, or doesn’t think through the competition or regulatory landscape. A lot of startups just haven’t really examined what a project should look like – and generally don’t have insight into the realities of a commercial situation.
This is the consequence of not reaching outside of the skill of those at the bench. Startups pay inadequate attention to drivers beyond what should shape the next experiment.
But the biggest problem, I find, is that they’ve got a crappy team.
Most of you won’t get to the clinic. Most of you will fail. The entire process is a learning exercise: It becomes all about the people that are hands-on when it comes to data and business, and can respond and adapt.
Startup CompetitionWin 225,000 DKK to make your idea happen - A Booster Pack is awarded to each of the 25 most promising high growth potential teams. Each package has a product value, 400,000 DKK
Startup Competition participants can win 25,000 DKK in each of six categories with an additional 200,000 DKK for the overall most promising startup. This competition focuses primarily on innovation, strength of business case, team diversity, startup potential and implementation strategy, including growth opportunities.
Participation gives access to advisors, workshops and an extensive network of investors, industry experts and serial entrepreneurs; all participants receive feedback from qualified jury members.
To enter the Venture Cup Startup Competition, submit a business plan of up to 15 pages before the deadline in the spring.What’s In It For Me?
For the past 14 years, we have worked to help and inspire young entrepreneurs. With more than 2000 teams, 1200 new jobs, and 4 international offices under our belt, Venture Cup is one of Europe’s largest and most trusted non-profits to help make startups happen. Supported by the Danish universities and some of Denmark’s most innovative companies, we provide support and the right mindset to help you succeed.
Some of the key challenges we can help you with:
1. For University Students, Staff and Graduates. All teams must have at least one person who is a student, faculty member, or recent graduate (within the last calendar year) from one of the Danish universities (AAU, AU, CBS, DTU, KU, RUC, SDU, ITU) at the time of submission. Note that this does not include HHX, HTX and Gymnasium-level students; please refer to our sister organization, ⊕ Young Enterprise. Full-time foreign students and diploma students are also welcome to apply, as long as they otherwise comply with the rules. For a full overview, please see the ⊕ rules.
2. For the Startup Competition a CVR number is required, prizes will be paid to your CVR number. If you do not have a CVR number yet, Venture Cup will assist you with the application process.2. Business Plan
You need to explain your idea and the potential business. The judges will typically be looking for the following: a) the innovation of your idea; b) the problem it solves; c) the team to solve it; d) the business case; and e) how you will make it happen.
The business plan must not exceed 15 standard written A4 pages. If you need inspiration on how to write a business plan, please check out our guide at our ⊕ Resources page or ⊕ download the Startup Competition inspirational guide/template here (PDF)
Once you have written the business plan, please save it as a PDF file of max 10 MB and name it the same as your team/company (e.g. “rubycup.pdf” or “blacksiliconsolar.pdf”)
Note: All members of the jury, advisors, and Venture Cup staff have all signed a ⊕ Non-Disclosure Agreement (NDA) as well as a set of ethical rules.3. Choose Category
Once you have written your business plan you should have a clear idea of what category your plan belongs in. Industry experts will read, rate, and provide vital feedback based on their category insight, so choosing the right category is important for both jury and participants.
We will screen all business plans to make sure you are entered in the category that best fits your idea, and you can apply with as many ideas as you want in any number of categories. You cannot however submit the same idea in more than one category.
The 6 categories are:
All applications are handled securely by our online competition management system. Once you click “Upload” a new window will open for your application. Fill out all the required info, upload the PDF to our online competition management system, then you will receive a confirmation email for a successful upload. Note: The upload may take a few minutes, so please be patient and only click the Submit button once.I Have Applied, Now What?
Congrats! You have now taken the first step to make your idea happen, and are now officially a member of the Venture Cup ⊕ Alumni Club. Once the jury have rated and provided feedback to all participating teams, we will release the feedback and make the finalists public via email and the website. This process usually takes 6 weeks.
Thanks for participating and good luck!
Marc Kneepkens's insight:
Startup Competitions like this European one (Denmark) are common all over the world. Prepare well, you might get a great start with funds and exposure. Business plan required! Check this one, will help you get started:
A few weeks ago during a moment of self-reflection, I noticed a recurring theme throughout the top deals in our pipeline and became suddenly aware of my tendency to value startups with well-formed user experience and user interface (UX/UI) design elements over more technical elements.
My initial reaction was to think of ways to weigh this aspect of the evaluation less (don’t be influenced by the pretty). However, perhaps there is a deeper meaning for this gut intuition. A great user experience correlates to a deep understanding of the customer and more importantly, how to deliver the technology/product/solution to the market.
Even as a startup, an understanding of how the end-user will interact with the product is immensely important. There are many amazing technologies that we pass on because the team lacks the vision to deliver the technology to the user. UX/UI design is an early indicator that the team understands their user and can deliver a quality product.Tinder
Tinder is a great example of a company which nailed its user experience. The technology, identifying your geo-location and then locating users nearby, is not revolutionary. The application of the technology and the way in which the user interacts with it is what makes Tinder special.
The company fully and completely understood its user base, and designed a product that matched that user base perfectly. When Tinder first started taking root in college campuses, you felt that the founders truly understood their audience. Match.com was great but not what this market was looking for. They wanted something simple, minimal, and fun. In fact very little of the user experience has changed since their first launch, though certainly much has changed technology-wise as the company has grown to millions of users.iPhone vs Amazon Fire Phone
The look of the Amazon Fire Phone is amazing, the technology within it is groundbreaking, and yet, adoption does not appear to be growing. As an iPhone user, it feels as though Apple’s device was built to make my life easier, whereas, from what I have seen, it appears the Fire Phone was built to make Amazon’s life easier and developed to make buying a product on Amazon faster.
This is great, but not what I need my phone to do. Amazon failed to design a worthy user experience and is suffering as a consequence.Enterprise Software
One of the hottest markets right now is in the enterprise software space. Leading the disruption is the implementation of consumer design elements. How can we take traditionally complicated, bland, and clunky software solutions (SAP, Oracle, etc.) and make them more user-friendly?
Salesforce, Workday, and Box all harness consumer design elements in their enterprise products. The basic idea is to take the design elements that we have all become accustomed to and implement that same strategy into the enterprise. This shift, alongside a shift in the workforce demographic (Millennials), has caused an explosion in the market.
Looking back, was it Google’s superior search algorithms that users flocked to or was it the user experience Google offered when compared to Yahoo, Lycos, and Alta Vista? I would argue that the experience of a singular search bar with no distractions is what caused many to choose Google as their search engine of choice.
The technology and IP behind a startup will always be important, but user experience and design can be just as important in determining the success of the company and often harder to achieve.
Marc Kneepkens's insight:
Presentation and a 'flowing' user experience makes the difference!
Here are eight tips to help you pitch fewer potential investors, get term sheets faster, and raise capital so you can get back to building your business.
In my last post, I shared eight tips for creating the perfect pitch deck. After such an overwhelming response (tens of thousands of readers, 45 questions via Twitter/email, and almost 5,000 shares via social media) I decided to follow up with a second piece on a topic that’s discussed even less than creating a pitch deck: actually standing in front of potential investors and pitching for capital.
As part of my five-year journey building Bigcommerce, I’ve raised three rounds of venture capital financing: a $15 million series A in 2011 from General Catalyst, a $20 million series B in 2012, also from General Catalyst, and a $40 million series C last year from Steve Case’s Revolution Growth for a total of $75 million.
For each round of financing, we created a pitch deck and went on a road show. For all three rounds, we received term sheets very early in the process and cut our pitching short, allowing us to get the capital and get back to building the business.
Here are eight tips to help you do the same — that is, pitch fewer potential investors, get term sheets faster, and raise capital so you can get back to building your business and executing on your vision.1) Know the investor and their portfolio in detail
Before you pitch a potential investor, spend a few hours on their website. Get to know who the partners are, whether each of them has any operational experience running a company as founder and/or CEO, whether they took their company public or had it acquired, and what they’re good at.
A lot of partners at venture capital firms blog too, so search for “[partner name] blog,” and read through their posts to learn more about them and their views.
You also want to figure out which other companies they’ve invested in, why, how much, and over how many rounds. You’ll want to avoid any investors who have put money into one of your direct competitors, as that would be an obvious conflict of interest and a waste of time.2) Don’t pitch on a Monday
This one is short and sweet.
Partners at every venture capital firm meet on Monday mornings to discuss potential deals and vote on investments. If you pitch on a Monday afternoon, you’ll be waiting a whole week to hear back on whether they’re interested in learning more or discussing a term sheet. By then, they’ll have listened to other pitches and may not hold the same level of interest they did on the previous Monday.3) Find partners whose thesis aligns with your vision
Most investors have investment theses that form the foundation on which they research, analyze, and invest in companies. For example, one of our investors has had a few different theses over the last few years. First it was travel, then e-commerce, then big data.
Inside a single venture capital firm, each partner can have their own investment thesis, and it’s important to make sure at least one investor has a thesis that involves your industry or domain. For example, there’s no point pitching your mobile messaging app if none of the investment partners have formed a thesis that mobile messaging has a huge future.3) Understand their fund size, life, and stage
Venture capitalists raise money every few years from their LPs (limited partners), such as wealthy families and university endowments. Each time they raise (yes, they have to do a roadshow and pitch, just like us!), they create a new fund. These funds are typically numbered in sequence (such as fund 4 or fund 5) and have an investment life of about 10 years.
The life of a fund is important, because if you take capital from a fund that only has three years left in its life and receive an acquisition offer that you might not want to take, your investor may push you to sell so they can generate a return and attribute it to the same fund from which they invested in your business.
Always ask a potential investor how much capital they have left in their current fund and how many years are left before they raise their next fund. It’s not always possible, but you want to receive capital in the first five years of a fund, which will give you at least five years during which to grow your business before the investor starts thinking about payback and return on the fund.4) Speak to your strengths and areas of expertise
If your startup has multiple founders, make sure you each stick to discussing what you’re comfortable with and what you’re an expert at.
For example, if you’re a non-technical CEO, then defer to your co-founder and CTO for technical questions about your architecture.5) Don’t read your pitch deck line-by-line
Never, never, never load up your presentation and just read through it line-by-line. Always focus on one key point for every slide and talk to that point in detail.
Look for queues showing extra interest as you speak as well as body language, and drill into a specific topic if you feel it’s appropriate.6) Every headline should be phrased as a selling point
Investors, like everyone else, will skim your deck before you pitch and while you’re pitching. Instead of a headline like “We have 100,000 users”, phrase it as a selling point, such as “We signed up 100,000 users in only 45 days”. Remember, you’re essentially selling equity in your business, so focus on benefits.
Here’s the litmus test: If all they did was read the headline on each slide, would they call you in for a meeting? Make the answer a yes.7) Speak about your competitors honestly and in detail
Have one or more reasons why your product is better than the competition, but never underestimate them.
Study their businesses inside out and clearly articulate (both visually and audibly) how you position against them. List their weaknesses and their strengths and, if appropriate, talk about your plan to turn your weaknesses into strengths against them.
You want to be able to articulate why an incumbent has a huge market share and convincingly convey why you feel you have a shot at winning over their customers.
When we were pitching for our series A in 2011, we clearly identified our four biggest competitors and how we would attack each of them. They were each much, much bigger than we were. Today, two of them are barely alive, one is dead, and we’re close to taking out the final competitor, exactly as we anticipated in our pitch deck back then.8) You don’t have to know all the answers
Don’t fumble if you can’t answer a question. Just remember the question (ideally, write it down, including who asked), and politely ask if you can email or call the partner with the answer later that day or tomorrow, once you’ve had time to do some research or talk to whomever you need to talk to.
Trust me, it’s better not have an answer than to fumble, get nervous and say the first thing that comes to mind.The other 99%
There’s a lot more to raising a round of financing than simply creating a pitch deck and nailing its delivery. That’s 1 percent of the battle. The other 99 percentis building the right product, hiring amazing people, building a fantastic culture, and understanding your metrics.
I share the story of how we tackled these topics while building Bigcommerce on my personal blog at BlogMitch.com, if you’d like to learn more.
Via Raj Nadar
Marc Kneepkens's insight:
Another good article born out of experience.
Why say what you mean... when something else sounds a lot better?
The intersection of founders and investors is a strange place: lots of smoke, lots of mirrors, lots of hyperbole and overstatement... and at times lots of overstatement and wishful thinking from entrepreneurs trying to show their startup in the best light possible. (Contrast that with Buffer's totally transparent funding round.)
And that's why Dana Severson, cofounder of StartupsAnonymous.com and fellow Inc. columnist (check him out--he's really good) put together this list of stupid things founders say when raising money.
See how many of these you've heard--or said--before:
1. "I'm not looking for money, just your feedback."
Translation: "I heard this tactic works well for getting meetings."
2. "My cofounder turned down a job at Google to focus on our company."
Translation: "He applied for an internship a while back and it fell through."
3. "I had a successful exit with my first business."
Translation: "I sold my lawn mowing clients to a friend on a commission."
4. "We're being selective on the investors we let into this round."
Translation: "We're taking every intro we can get... which isn't many."
5. "We're taking our time to make sure we find the right partners for this round."
Translation: "Finding people to invest has been a bitch."
6. "We're seeing 20 percent month-over-month growth."
Translation: "Last month we had 10 email sign-ups; this month we have 12."
7. "Our growth has been all organic."
Translation: "All our friends are using it."
8. "We felt we were too far along to join an accelerator."
Translation: "YC rejected us--twice."
9. "We're raising money to scale quickly."
Translation: "We want to finally pay ourselves."
10. "Our competition is too big and slow to come after us."
Translation: "The market size isn't significant enough for them to care."
11. "Customer service is what sets us apart."
Translation: "We just installed the free version of Olark."
12. "We're launching public beta next week."
Translation: "Should be two or three more months."
13. "We plan to stay in beta for the next 12 months."
Translation: "We're not sure how long our shoddy codebase will hold up, so 'beta' sounds better."
14. "We want to create a very minimalist design."
Translation: "We're not designers and can't afford to hire a decent one."
15. "We've gotten outstanding feedback from our users."
Translation: "Our friends claim it's awesome."
16. "We're about to blow up."
Translation: "We hope one of our blog posts hits big on Hacker News."
17. "This is a $50 billion per year untapped market."
Translation: "I heard this tactic works for getting investors."
Before you think he's being too harsh: "For the record," Dana says, "I'm guilty of all of the above."
Via Jean-Pierre Blanger
Marc Kneepkens's insight:
This kind of stuff totally gets you out the door and off the list in the blink of an eye.
In 100 years, startups will look more like they did 100 years ago. It may be that the majority of startup founders barely know each other.
Brandon Gadoci, in a blog post last week from Disruption Corporation, posed the question “Where Will Startups Be in 100 Years?” Gadoci notes how we have studied entrepreneurs from the early 1900s, quoted them, put them on T-Shirts and Oatmeal sites. Startups then didn’t know each other, and set out on solo ventures to change the world. “In 100 years, startups will look more like they did 100 years ago,” claims Gadoci in this article. “It may be that the majority of startup founders barely know each other.”
The startups then certainly never would have referred to themselves as “startups”, either. So I wondered, as I checked through my Rolodex of startup founders and community supporters: So… “What is a startup?”
Here are the answers I received.
To be real, I’m still discovering what a startup is.”
Marc Kneepkens's insight:
Any more definitions? What do you think a startup is?
Despite all the talk about excess capital in the tech investment sector, many young but growing companies find themselves in a no-man’s land. I spoke to dozens of investment firms during our last capital raise and the story was almost always the same — they’ve been following our business and love what we’re doing, but their “minimum check size” is about $5 million. These firms can’t (or won’t) invest any amount below their minimum. When I explain that we’re not seeking that much capital at the moment, the conversation defaults back to the standard “let’s keep in touch” response. The truth is that more and more venture-capital firms are acting like private-equity businesses, seeking to back established concepts that already have significant revenue. This is a totally understandable strategy, but it isn’t all that helpful for businesses at our stage of growth.
The logical next step is to seek out angel investors, but this is also often easier said than done. Many angels are hesitant to invest in companies that are past the seed stage, but at the same time haven’t seen the explosive growth that would merit interest from the venture-capital/private-equity firms described above. This is often due to the fact that companies with a product seeking a second round will often raise at a higher valuation than many angels are comfortable with.
So what is a company in this position supposed to do? We found ourselves in a very similar situation here at BodeTree, when we set out to raise our second investment round. Fortunately, we developed a strategy that helped us successfully raise the capital we were seeking and laid the foundation for the success we’re seeing today. Here are the three key elements that helped us along the way:
Broaden your geographic search. While Silicon Valley and New York City are hubs of investment activity, there are plenty of investors and opportunities in other geographic regions. While you might not get the same level of validation or support that comes with an investment from a firm like Accel partners, you stand a better chance of securing the incremental capital you’re looking for. Additionally, there are plenty of firms that don’t traditionally specialize in technology, but are looking to diversify their portfolios. We found our lead investors in Denver, and they’ve proven to be an invaluable part of our team.
Reach out to potential partners. If your company is looking to partner with large established players, consider approaching those organizations for investments. Many times you’ll find that a compelling case for partnership is also a compelling argument for investing. Additionally, having partners who are also investors can help ensure commitment to the long-term success of the venture and help you “punch above your weight.” We’ve found that engaging with partners in this capacity can lead to much deeper relationships.
Ask for more introductions, even when you’re turned down. This strategy seems simple, but you’d be amazed how effective it can be. Many times when an individual or firm chooses to pass on investing in a round, it isn’t because they don’t like your business. Many times the opportunity simply doesn’t fit their investment criteria, such as looking for less than $5 million. If you do a reasonable job of telling your story and manage to connect with potential investors on a personal level, more often than not they’ll be willing to introduce you to other individuals or firms that are a better fit.
There’s never going to be a magic formula for raising capital. Everyone’s story is different and has to be evaluated on a case-by-case basis. However, if your company finds itself in the middling position of having a completed product and being on the cusp of significant traction, don’t give up hope. While it can be difficult for companies that don’t fit into the clearly-defined growth stages venture-capital firms and angels are comfortable with, there are plenty of opportunities in the market. At the end of the day, you can rest assured that good companies and ideas will get funded. It’s just a matter of making sure you get in front of the right investors and seek out the best opportunities. These strategies worked for us, and I’m confident that they’ll work for countless other businesses in similar positions.
Mr. Myers is co-founder and CEO of BodeTree, a Web application for small businesses.
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The 500 Startups accelerator has been emphasizing B2B founders more and more, which was quite evident at its latest Demo Day on Tuesday at Microsoft in Mountain View. Here are six with interesting pitches to help small businesses.
Click image or title to see the original article.
The shift away from consumer-focused businesses towards B2B's has been going on for a while at 500 Startups but it was on full display Tuesday when the second batch from its San Francisco accelerator program did their Demo Day.
Only a handful (if your hands have nine fingers) of the 28 startups who took the stage at Microsoft in Mountain View target consumers as their principal customers.
The rest provide ways to help entrepreneurs and executives in different vertical slices of the business and non-profit worlds.
Two other distinctive features of 500 Startups tenth batch is that a growing number include foreign entrepreneurs and female founders. Nearly 40 percent have at least one woman on the founding team and nearly two-thirds have at least one foreign-born founder.
"We know we aren't at 50 percent on women yet but we are getting better," Dave McClure, founding partner at 500 Startups said. "And if you aren't investing in women entrepreneurs and global startups you are totally missing out right now."
Only six of the startups that pitched on Tuesday actually come from the Bay Area. The others flew in from all over the world to go through the 500 Startups accelerator program.
Here are my favorite B2B pitches from the latest batch, many of which could be as valuable to small business owners as they are to the roomful of investors that the founders were pitching to on Tuesday:
— Gymtrack: From Ottawa, Canada, this company co-founded by Lee Silverstone and Pablo Srugo provides sensors that can be put on equipment in gyms that provide exercisers with a variety of workout data that gets stored on their smartphones. They even provide a second little voice to the one many people already have running in their heads when they are working out. Gymtrack's "virtual trainer" provides encouragement and progress updates. Website: http://www.gymtrack.co/
— LendSquare: Out of Chicago, this crowdfunding startup helps people invest in businesses in their own neighborhoods and get paid back with interest and perks. Co-founders Sebastian Villarreal and Jose Valdes say this helps people invest in businesses they care about and strengthens their neighborhoods. Website: https://lendsquare.com/
— Neighborly: OK, so you don't think of local government as a business. But they borrow money and pay interest on that like a business does. This Kansas City, Missouri, startup led by CEO Jase Wilson helps people learn about the money their community is borrowing in municipal bonds and helps them get involved. Website: https://neighbor.ly/
— Rain: This one is from the L.A.-based founding team of Skyler Sutton and Rick Citron. They are bringing online ad placement help to the local pizza shop or other businesses who are too small or too busy to even think about mobile and local marketing possibilities. Their software can be used online or through their iOS app to create and target mobile ads for a specific area. It will tell owners what their local campaign will cost and help them shape what they do accordingly. Website: http://www.rainlocal.com/
— Shakr: Another startup offering small business marketing help is this one from South Korea-based co-founders David Lee, Dave Jansen and Minku Lee. They provide drag-and-drop ad templates ad templates that can be used to make flashy videos in a few minutes that can be posted on social networks or embedded on company websites. Anybody can create a video for free but if they want to lose the Shakr watermark they will have to pay between $30 and $50. Website: https://www.shakr.com/
— Vizalytics Technology: Husband-and-wife co-founders Aileen Gemma Smith and Christopher Smith have an app called Mind My Business that alerts owners of brick and mortar and mom-and-pop shops to what is happening around them that could affect their business. New regulations? A competitor crashing the neighborhood? Crime wave? The Smiths say they will let their customers know about it. The business was developed in New York City, a thicket of such small business perils. To paraphrase the song, if they can make it work there, they can make it work anywhere. Website: http://www.vizalytics.com/
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
More successful startups helping small and local businesses.
Entrepreneurs don't have to be pitch perfect, but passion, projection of strengths and awesome products are essential
Business angels and venture capitalists and business angels play a vital role in new business creation, providing capital and access to a powerful resource network and enabling thousands of entrepreneurs to realise their dreams of creating and growing new ventures.
Many of his own funding decisions were based on the outcome of micro pitches. One of the best examples Branson can recall was Igor Ruberts of Boxhug, winner of this year’s Virgin Media Pioneers Pitch 2 Rich competition.
Get your Free Business Plan Template here: http://bit.ly/1aKy7km
Marc Kneepkens's insight:
A good pitch is essential to get funded.
Danielle Morrill, the founder and CEO of startup research firm Mattermark, teased an upcoming report at Demo on Thursday with a Top 10 ranking of the fastest-growing companies that have raised less than $50 million.
Big growth doesn't always depend on raising big bucks, according to Danielle Morrill, CEO and co-founder of investment research firm Mattermark.
To illustrate that point during a presentation at the Demo Fall tech conference on Thursday, Morrill offered a list of companies that she says are "punching above their weight class."
She compiled the list of companies while doing massive research into which startups are showing the fastest growth, which she plans to publish early next month on a "pay-what-you-want" basis. She is taking pre-orders with a $1 minimum now at https://gumroad.com/l/mattermark2014.
San Francisco-based Mattermark pulled the "punching above their weight" list from data it gathers on more than 1 million companies. The companies included on the list have shown the most growth while raising less than $50 million, according to Morrill, although a couple of those listed have raised more than that amount.
Most of the companies on the list are less than three years old, so at least some of the big growth may be the type of uptick that peters out after a while as a business matures.
But they are all hot right now and doing it on relatively little money compared to their peers, according to Morrill.
"Some of these companies are well known, but some of them are a surprise," she said. "That is the value of using data to find interesting companies."
Here is the list of startups Morrill said are giving the biggest bang for the bucks they have raised:
— 1. Stitch Fix, San Francisco: This online fashion retailer led by CEO Katrina Lake promises to deliver a truly personalized shopping experience and it appears to be getting traction. It topped Mattermark's ranking and squeaks in just under the $50 million funding level with a total of $46.8 million raised since it launched in February 2011. It is backed by Lightspeed Venture Partners, Benchmark, Baseline Ventures and Western Technology Investment.
— 2. Elite Daily, New York City: This is a news site that focuses on news written for and by Millennials. Hot topics are luxury, culture, sports and finance, and it claims to have an audience of more than 55 million monthly readers. It was founded in 2012 by David Arabov, Jonathan Francis and Gerard Adams. It's done all this on only $1.5 million in funding from Greycroft Partners, Vast Ventures, Red Sea Ventures and Social Starts.
— 3. Teespring, Providence, R.I.: This company, co-founded in 2011 by Walker Williams and Evan Stites-Clayton, has shipped more than 1 million products to over 80 countries. Despite being included on this Mattermark list, Crunchbase shows Teespring has raised about $57 million. Investors include Andreessen Horowitz, Khosla Ventures, Y Combinator, Fuel Capital and Funders Club.
— 4. Chloe & Isabel, New York City: This startup has developed a platform that can be used to create a boutique online shop where people can sell its jewelry and earn a commission on every sale. It was founded by CEO Chantel Waterbury in 2011 and has raised more than $32 million. Backers include First Round Capital, Founder Collective, Ashton Kutcher, General Catalyst Partners, Softbank Capital, Forerunner Ventures and Floodgate Fund.
— 5. J. Hilburn, Dallas, Texas: This company sells luxury men's clothing, both custom or ready-to-wear apparel, as well as accessories through a network of more than 2,500 "style consultants." Founded in 2007 by Veeral Rathod and Hil Davis, it has raised about $26 million. It is backed by Battery Ventures and Bridgescale Partners.
— 6. Zenefits, San Francisco: This company, founded by Parker Conrad and Laks Srini, is being used by more than 2,000 companies to manage the HR benefits of more than 50,000 employees, all from an online dashboard. Crunchbase shows it has raised $83.6 million since it launched in 2013. Backers include Andreessen Horowitz, Maverick Capital, Venrock, Y Combinator, Institutional Venture Partners, SV Angel and Hydrazine Capital.
— 7. Handy, New York City: Founded as Handybook in 2012 by Oisin Hanrahan, Umang Dua, Ignacio Leonhardt and Weina Scott, this company provides a way to book household cleaners and others services. It has raised $45.7 million from investors who include Highland Capital Partners, General Catalyst Partners and Revolution LLC.
— 8. Udemy, San Francisco: Since launching in 2010, this online education company has grown to more than 4 million students taking over 20,000 courses on just about any topic you can imagine. It was founded by Oktay Caglar, Eren Bali and Gagan Biyani and has raised about $48 million. Backers include Signia Venture Partners, Lightbank, 500 Startups, Norwest Venture Partners, Insight Venture Partners and MHS Capital.
— 9. Medium, San Francisco: Since this one was founded by Twitter co-founders Biz Stone and Evan Williams, this one feels like a bit of a ringer on this list. It offers a personalized blogging site that helps people to share a variety of collections of content around a theme. It raised $25 million in January from investors including Google Ventures and Greylock Partners.
— 10. Distractify, New York City: This is another entertainment content site that focuses on culture, lifestyle and current events. It was founded a year ago by Yosef Lerner and Quinn Hu and has raised about $7 million. Backers include CAA Ventures, Lerer Hippeau Ventures and Lightspeed Venture Partners.
Marc Kneepkens's insight:
Good startups don't always require massive funding, although some of the funding amounts here are pretty big still.
We’ll need to produce 70% more food by 2050 to sustain a world population expected to grow to 10 billion. Yet agriculture startups struggle to get the funding, manufacturing, and test facilities needed to build tech that could boost food production. To fix that disconnect, Google Chairman Eric Schmidt’s Innovation Endeavors and Flextronics Lab IX today launched Farm2050, a collective that will support AgTech startups with capital, design, manufacturing, and test farms to try out their inventions.
The Farm2050 partnership includes Google, DuPont, Agco, UTC’s Sensitech, and 3D Robotics. Flextronics’ Head of Lab IX Lior Susan tells me “It’s still not sexy to do agriculture. You don’t see IPOs and big acquisitions that pull Sand Hill into the game.” That’s why Farm2050 is necessary to foster an AgTech ecosystem.
Farm2050 is now inviting startups to pitch it ideas to address the global food challenge.
“You see a concentration where 90% of entrepreneurs are focused on 10% of the problems”, Innovation Endeavors’ managing director Dror Berman tells me. Agriculture has been really underserved. You can build a ton of technology companies here that really matter.”
Farming is already a huge market, with net farm income worldwide estimated at $120 billion a year. Yet the support structure hasn’t been there to accelerate technological advancements in agriculture as fast as in other industries. When there are breakthroughs, though, they truly help humanity.
Berman says “100 years ago we saw the Haber-Bosch process enable fertilizer development. 50 years ago we saw the refrigerated truck facilitate the long-distance transport of perishables. And today we’re seeing the emergence of robotics and machine learning applied to agricultural practices.”
Farm2050 is open to any ideas that boost food production. Specifically, though, it will be looking for startups working on how robotics and data science can advance the ways farmers seed, cultivate, and harvest all kinds of food.
The collective format that includes a range of companies, rather than just being a few investors, is designed to let corporations get involved with sparking AgTech innovation beyond just offering money. Berman tells me corporations frequently create incubators or fund startups, when really it’s their tech and expertise that could help most. Farm2050 will harness those resources, such as supply chain expertise, or sensor technologies, to help the companies it backs.
The mission-driven Farm2050 collective is a prime example of social venture capital, where returns are calculated not just in dollars returned, but good done. Susan concludes, “Our children and our grandchildren need to live here. If people who invest in startups can’t help, that kind of sucks.”
If you’ve watched Interstellar, you’ve seen a vivid portrayal of the desperate times a global food shortage could cause. If any entrepreneurs out there are on the fence about whether to get into AgTech, I hope that film and today’s announcement convince them there’s something more important to build than social games and photo apps.
More: Eric Schmidt’s Farm2050 Collective Will Back Agriculture Tech To Feed Earth’s Growing Population | TechCrunch
Marc Kneepkens's insight:
Finally some tech giants are addressing some real problems. Here is an opportunity for agricultural ideas and startups.
Investing in a startup requires believing in the founder. Due diligence is as much a gut check as a fact check.
If you thought being an entrepreneur was tough, then you’ve never lived in the shoes of an investor. Whether you’re a VC or angel, investing in startups is risky business. That’s not saying that if a startup fails you’re out on the streets. It just means that if you don’t pick any winners, it’s time to find a new line of work. Investors are in the business of founding a startup in the hope that it becomes successful - which will also make them a hefty return in the long-run.
While certain factors are out of our hands, such as an economic downturn, we do have the opportunity to make sure that we’re at least investing in the right startup. And investing in a potentially successful startup all begins with the entrepreneur behind the whole thing.
Before committing any amount of money to a promising startup, here are a few things you should keep in mind to make sure you're going to be working with a great entrepreneur.1. What kind of experience do they have?
As John Rampton pointed out in Entrepreneur, “Investors don’t want entrepreneurs to make mistakes on their dime.” This is why it’s most advisable to do your homework on entrepreneurs. We need to look at their business track-record and determine if they are expert in their industry. For example, would you want to work with a police officer on a business venture that involved baking? Or, would you rather work with that police officer on a product that improved vehicular safety?
In short, you don’t want an entrepreneur to learn as they go with you funding it. However, if they have the knowledge in an industry and experience starting a business, they have the chops to handle the day-to-day business operations.2. Are they a good storyteller?
While a workable idea and solid business plan are important when selecting which entrepreneur to work with, the ability to communicate is arguably their top selling point. An entrepreneur needs the ability to emotionally connect with investors, customers and the media. A great storyteller can select the right story for the right audience. Furthermore, they can engage with the audience, motivate them with a strong call-to-action and actively listen.
Martin Zwilling mentioned Howard Schultz, founder of Starbucks, and Chad Hurley, founder of YouTube, as examples of great storytellers because they each turned "'me' into a 'we,' by being able to tell a story that shined the light on an interest, goal, or problem that both the teller and the listener shared."3. Can you trust them?
David Rose, founder of the New York Angels investing group and CEO of investment firm Gust, was asked what he thinks is the number-one quality to look for in an entrepreneur when investing. His response was integrity. He said there are many things that an investor can’t control, so being able to trust an entrepreneur is something they need on their side. In other words, you want to be assured that the entrepreneur isn’t just going to take the money and run, or give-up when times get hard. They have to have a foundation of integrity and hard work to make their idea reality.4. Does their business plan answer the three C’s?
Many years ago, Cliff Ennico, who was the host of the PBS reality series MoneyHunt, reminded entrepreneurs to have a business plan that included the "three Cs," which consisted of:
If an entrepreneur has taken the time and allocated the resources to satisfy these areas, it illustrates there are conscientious people behind the idea. Then you can feel a bit more at ease before signing a check over to them.5. Are you familiar with their niche?
"As you probably know, investors want to minimize their risks as much as possible" says investor and entrepreneur Qais Al Khonji. "That’s why so many investors aren’t too worried about supporting startups that are involved with software or healthcare industries," for example, because these industries have a big audience and potential for profit.
On top of those sort of industries, you consider working with entrepreneurs that you personally know, such as a former colleague, or someone who has been personally recommended. Entrepreneurs who pitch ideas in a field you are familiar with are worth listening to, since you and that person have similar interests already.6. Would they be good to work for?
Even as an investor, you have to ask yourself if the prospective founder is someone you would want to work for. Can the founder convince, and inspire, prospective employees to give as much heart and soul as possible to their venture?
These are people who may lose their job if the company fails, but still deliver a high level of dedication, even though their actual level of monetary investment may not be all that high. Investors look for founders who can attract and keep such employees. Marco Benvenuti, co-founder of Silicon Valley hotel-industry startup Duetto says giving employees a sense of purpose has helped them attract talent.
"Having a sense of purpose is important," he says. "The engineers train extensively on the product and how it works for our customers. Giving them the full context allows them to build and produce features that deliver tangible benefits for clients."
One key to any business is the entrepreneurs behind it. Finding them can be tough, working with them and investing in them can be even more of a challenge. However, if you make a careful and considerate examination of entrepreneurs who are seeking funding, you will find one who fits your interests, goals and personality. If you're going to spend years of your life interacting with someone, be sure you give them a thorough evaluation. After all, in the end, it's your time and money at stake.
Marc Kneepkens's insight:
If you want funding, learn to look through the eyes of an investor, and then give them what they want.
Indian startups budding in Singapore - "Chuck out your resume!" is the mantra of Sudhanshu Ahuja who runs his own talent pool business here and is among the young Indians who have taken advantage of Singapore's business-friendly environment to set up their companies.
Here you just have to show your talent and we will give you the job you are good at," Ahuja, who hails from Faridabad, said.
"We organise a challenge for a particular skill and we refer them to companies interested in hiring them," Ahuja, the founder of ideatory said.
Ahuja, who left IIT Delhi to study at Nanyang Technological University here, feel that Singapore has many opportunities for youngsters and it provides a good environment for people who want to start their own business.
"Singapore government encourages youths. Here we have more professionalism and the most important thing is that Singapore has strict rules and regulations so people trust the company that is based here," he said.
Ahuja, whose clients include banking giant DBS and electrolux, is among many Indians who have successfully started their businesses here.
Prasoon, who is an architect from Delhi has the same story. He is the founder of billion bricks that provides shelter to children who stay on the streets.
His company has completed their first shelter in Andheri.
For him a base in Singapore provides him a global reach.
"From here I can spread my business to other parts of Asia and Singapore based company is considered more trustworthy, he said.
And for Aprna Mittal, Singapore has more structured administrative platform.
"Starting a new business here is very easy. People are more professional," Mittal an IIT graduate who runs an online healthcare portal which provides information on healthy lifestyle.
According to industry leaders, one needs only 30 dollars to register a business in Singapore and government is very encouraging if one has a good proposal and idea.
There are non profit organisations like Singapore International Foundation which not only provides a platform for young people all over the world to showcase their ideas but also provides them awards and opportunity to work with leading companies.
Marc Kneepkens's insight:
Singapore is definitely a great place to start for Indian startups. On India.com
Have you ever felt like you're talking, but nobody is listening? Here's Julian Treasure to help. In this useful talk, the sound expert demonstrates the how-to's of powerful speaking — from some handy vocal exercises to tips on how to speak with empathy. A talk that might help the world sound more beautiful.
Via Official AndreasCY
Marc Kneepkens's insight:
Learn about using your voice properly, and speaking with the right intent so that people listen.
I’ve pitched at least 250 investors over the years, mentored hundreds of startups and have plenty of fail behind me. So I feel I know a thing or two about
pitching, and European startups are so often really rather bad at it.
Austria, and specifically Vienna, is famous for classical music and Sachetorte more than tech startups, but I’d heard good things about Pioneers Festival and so wearing my early-stage investor hat, I found myself consuming 50 startup pitches at the Haus der Industrie. To give yourselves a better chance of securing funding – and customers – here are 10 suggestions to get right.
1. Problem/Solution Fit
Define what you do; this is the most basic aspect of a pitch. To my ongoing astonishment, this so often gets overlooked or poorly communicated.
According to the interactive event app (which allowed investors to submit questions and vote) at least half of the startup pitches didn’t communicate clearly what they do. Top of the feedback was “I don’t get it.” Often the judges didn’t get it either and had to ask in the Q&A.
The size of the problem you solve and how well you solve it creates the value in your business. There is simply no excuse for not being able to pitch coherently the problem you solve and how you solve it in one minute let alone three minutes.
A good test is to pitch your Mum (use your team’s family, too). This is a serious suggestion. If your mother understands it then you’ll guarantee tech investors (and your customers) understand what, why and how, too.
2. Speak English Clearly
As a born English speaker whose only second language is French in the form of a pigeon, I feel a tinge of guilt criticising others who don’t get to pitch in their native tongue, but the harsh truth is that unless you can speak clear English as a CEO pitching an international market, you’re going to struggle. I’ve even heard that a Y Combinator representative said that CEOs with “thick unintelligible foreign accents” quite simply fail.
Record yourself and ask a native speaker their honest opinion. Better, record yourself and ask other people for whom English is their second language. Invest in lessons/speech therapy if necessary. And in addition to that…
3. Speak Slowly
As an occasional MC/speaker I certainly still sometimes fall foul of this. Speaking more slowly does not come naturally. It feels odd. But it sounds good. Slower speech will not only help with clarity if you have a strong accent, it will give you more gravitas. There are lots of great resources to help you improve your speaking; this is one of many. If you feel that you’re talking way too slowly, you’re probably speaking about the right speed.
4. The Right Slides
Too many decks continue to be confused, bloated, overly complex or all three. I’d recommend you take Sequoia’s template as a starting point, though some cash / revenue projections may not apply if you’re very early stage. They’ve made a lot of money in this business. If it’s good enough for them, it should be good enough for most investors.
Bear in mind obviously the content will change depending on whether this is a deck to be read, studied closely pre-investment or something you’re presenting in three minutes. Equally, if your presentation is just three minutes you obviously wouldn’t include all these slides; apply common sense.
5. Less Is More: Simple Content
If I’m reading a slide, I’m not listening to you. When I’ve finished reading, I’ll look at you again and start listening again. You have precious seconds to make an impression and you want people to engage with you, the human being on stage, and listen to what you’re saying.
Complicated slides compete for audience attention. Why set yourself up with a competitor? Steve Jobs was possibly the king of scarce slides, using imagery and allegedly never more than three bullet points and usually only a word (or three) each. You may not be launching the new iPhone but you can steal Steve’s tricks to help keep people focused on the important things: What you’re saying.
6. Tell a Story
Humans are emotional animals; yes even investors. With a three minute pitch (as it was at Pioneers) you might think it’s a distraction to tell a story. But don’t forget story telling is the most ancient of modern human’s ways to communicate information, be it cave gossip or religion.
Half your challenge is to engage the audience within the first 5-10 seconds before their heads tip back down to phones and laptops. A snappy authentic story which positions your problem / solution fit can engage and differentiate you. Don’t include fluff (this isn’t bedtime story telling) but providing context and stimulating curiosity in the first 30 seconds, may mean people leave the wifi alone for the remainder of your pitch.
If you believe Malcom Gladwell then 10,000 hours is the time it takes to become supremely accomplished at anything. That’s not feasible for your pitch obviously, but practicing 10, 20 or 50 times is. With all the cost and time to attend a conference, not to mention the subsequent impact your 1, 3, 5 or 10 minute pitch will have on an audience, practice really will help make perfect.
So many founders I know don’t properly practice their pitches for specific events which often have specific pitch lengths. So practice; rinse, wash, repeat. It will really pay off.
Before you begin, take a few seconds to pause. There’s more about this in the book I recommended above. Gaining composure and asserting yourself on the stage is vital and you can afford five seconds to avoid the impression of a manic hyena, before you launch into your winning pitch.
9. Answer questions quickly
The Q&A session is a great time to show your mettle. Perhaps surprisingly, this is closely linked to practice. If you’ve not pitched “friendly” investors, your team, your family or others, you won’t be used to answering the tough questions.
Get to the point when answering the question and if cornered (e.g. because an investor asks your valuation or you don’t know the answer) know in advance what you’re going to say, even if it’s “I’m happy to discuss that afterwards off stage.”
Even if you’re a seasoned pitch artist for your startup, sit down and write the 10 questions you’d hate to be asked. They’re probably exactly the ones you’ll get.
10. Hire a Coach
You can hire a coach or get a mentor or another entrepreneur to help you shape your deck, but you can also hire a coach to help you with your presentation skills.
Given how important a snappy delivery with absolute clarity in a startup world of elevator pitches is, paying for a day or two of presentation coaching (assuming you hire someone good) could make all the difference the next time you’re onstage, and it’s something startup founders rarely seem to see value in doing.
Don’t forget, even the most populous leaders in our world do this – from Presidents to Prime Ministers – they all have coaches or have been coached.
There are many more tips and tricks you can employ (and far better speakers or teachers than I out there who can give them) but reviewing the performance of the 50 startups Pioneers, these thoughts were the elephants in the room, which, as startup founders, you need to take outside the zoo and aggressively cull from your startup pitches.
It’s worth adding that conference teams themselves can sometimes be guilty of compounding problems. If you’re a conference organizer, these are my top three gripes as an attendee watching pitches or having been a founder having to pitch:
Bad MC. It continues to amaze me how poor so many hosts are at tech conferences and I find myself wondering why they were chosen. Despite “only” introducing each startup, the MC sets the whole tone of an event – they define the energy in the room. They should be able to connect with an audience, gain the audience respect and carry the audience with them if there are problems and keep things on time gracefully.
Being an MC is hard. I know, I’ve done it and I can always improve. So pick your MC carefully, ask them how they will prepare, ask them what’s important about being an MC, get recommendations and don’t consider it an afterthought – they will make or break the perception of your event.
Poor AV or presentation transition. You have plenty of time to test and practice rapidly changing pitch decks and to confirm that your sound system works. Don’t make a founder’s job even harder when they’re already wracked with nerves by fiddling around with PowerPoint/Keynote problems.
Poor acoustics. You’re presumably paying an AV company to run your sound system. If you’re in the pitch room and speech isn’t clear, it’s their job to fix it. Or, don’t pick a room with naturally awful acoustics for voice. Somewhere which is good for chamber music, may not necessarily be good for startup pitches.
Epilogue: The Audience
I’d like to end on a note to the audience at these events.
We Europeans are a hard crowd to please and there’s nothing worse than being an MC or a founder speaking to an audience of unengaged stones. So next time you’re asked to welcome someone on stage, give them a truly energized round of applause or hey, laugh at the MC’s joke even if it’s not going to win him an Emmy Award… Just a little bit of enthusiasm, even if feigned, goes a long way.
Startup growth should be the primary for all companies looking to stay alive, and recent research from McKinsey & Company backs up this argument.
According to Y Combinator cofounder and partner Paul Graham, the single most essential trait about being a startup is its capacity for rapid growth. That’s it: startup growth – that is the only thing that entitles a company to being labeled a “startup”. In April of this year, McKinsey & Company released its findings on software and online-services companies from the likes of Adobe, Salesforce.com, Google, and Facebook, which further conveyed the innate growth trait of startups and why it’s necessary for companies to grow fast or face complete death. The research was compiled by analyzing life cycles of approximately 3,000 software and online-services companies from around the world between 1980 and 2012 (essentially spanning the period of time between the nascency of the initial tech boom of the 1980s to today’s era of tech startups), as well as surveying more than 70 company executives.
In McKinsey’s research, there were three primary findings: 1) growth matters more than margins, 2) sustaining high growth is difficult, and 3) sustained growth is possibly only when certain factors are secured. For startups wanting to become billion-dollar companies, startup growth is the one thing on which they need to focus. Why? Because higher growth yields greater returns to shareholders. Additionally, high growth predicts long-term success. In the study, companies with growth rates greater than 60 percent upon reaching $100 million in revenues – which McKinsey refers to as “supergrowers” – were eight times more likely to reach $1 billion in revenues than those whose growth was less than 20 percent.
This article includes 2 videos. Click on the image above, then scroll down in the article.
Marc Kneepkens's insight:
Startups are all about growth. Starting a company does not make you a 'startup'.
After Clark Benson sold his company eCrush in 2007, he had two choices: He could either take a sabbatical or he could jump right in and start building his fifth company, Ranker, a site that would crowdsource rankings of everything from movies to athletes. Feeling self-inflicted pressure, he chose the latter — and, in his words, it turned out to be a colossal mistake.
“I didn’t take nearly enough time off to unwind after 12 years of an all-in entrepreneur lifestyle. I also didn’t take enough time to think in much more detail about the team I needed to hire and the resources we’d need before the pressures of overhead came into the mix,” says Benson. “I had this great concept, and I just couldn’t handle the idea of seeing someone do it before we did.”
This was the first of many mistakes he admits to — despite having nearly 20 years experience as an entrepreneur. Yet today, his company Ranker draws 19 million unique visitors a month, is considered a consumer data insights treasure trove, and is solidly in the black. So, what made the difference? In this exclusive interview, Benson shares the five biggest mistakes he made — that he sees other founders make all the time — and how he overcame them to turn things around. More here: http://snip.ly/1Cl9
Marc Kneepkens's insight:
Important read for startups. Quality insights from experience.
Read on to find out what the UK’s key players have to say about Europe’s funding scene and why Saul Klein advises that investors “need to get their hands dirty”…
The Europe v Silicon Valley debate is one that often crops up in the investment world but, on the back of recent news that European start-ups have raised over $2.8bn in the last quarter of 2014, it would appear that Europe is now going someway to creating its own tech cluster to rival that of the San Francisco hub.
Given this growth in European investments and London’s evolving technology community, it’s no surprise that some of the biggest names in venture capital were keen to weigh in on the topic at this week’s inaugural TechCrunch Disrupt.
In a panel discussion which saw Passion Capital’s Eileen Burbridge, Index Ventures’ Saul Klein, Accel Partners’ Philippe Botteri, and Balderton Capital’s Daniel Waterhouse take to the stage, questions were posed in regards to Europe’s “incestuous” investment communities, access to talent, and, more controversially, what “went wrong with Wonga”.
Read on to find out what the UK’s key players have to say about Europe’s funding scene and why Saul Klein advises that investors “need to get their hands dirty”…What’s your take on European tech start-ups- how is the eco-system progressing?
Saul Klein: “I think we will pretty likely see a couple of European $10m exits in the next two or three years. Europe is still a pretty young eco-system. The Silicon Valley eco-system is producing these $50, $100, $200bn exits but it’s 30 or 40 years old.
“The European eco-system is really only 10 or 20 years old so I actually think the fact that in the last 12 months we’ve seen about 10 multi-billion dollar exits coming out of Europe is an indication of the way that things are really starting.
“We’re [Index Ventures] very bullish on the prospects.”
Eileen Burbridge: “The eco-system is developing. We’re seeing more successes in the earlier stages than the big A rounds – it does take time to realise that kind of value.”In Europe, the common problems are lack of access to capital and talent – how far are we from addressing these problems?
Phillippe Botteri: “We’ve made a lot of leeway. If you look at how the system is progressing, especially in tech and financial, […] we’re already seeing this flurry of exits […] I think its progressing quite fast.“There’s a lot of fresh capital to be deployed in Europe”
“In the next three or five years we’ll see some very interesting things. Look at this panel there’ a lot of fresh capital to be deployed here [in Europe] so it doesn’t feel to me that there is a lack of capital at this point.”Is the funding pool in Europe as widely distributed as Silicon Valley?
Klein: “I think that it is starting to change. I mean it’s a fair criticism of the first and second waves of European companies but I think […] when you start to combine the alumni that are coming out of the LoveFilm’s, the Skype’s, the Zoopla’s, the JustEat’s etc., it seems […] that today’s entrepreneurs and investors have a much more Silicon Valley attitude to options and the fair distribution of the rewards.”
Botteri: “It’s part of the evolution of the eco-system.”Some of the most promising European start-ups either move to the US or build a large presence there, it seems like that’s an approach you encourage – is that a fair assessment?
Botteri: “It really depends on the type of company and sector. If you take a company like BlaBlaCar, the ride sharing platform, the company started in Europe but if you look at the US market it didn’t get going for different reasons and the driving is much lower so it made a lot more sense to expand in Europe and other markets like Russia, Brazil, India actually before the US.”
Klein: “I agree with Botteri, it depends on the company but I also think that historically entrepreneurs were drawn naturally to the Bay (Silicon Valley) area – ZenDesk is a good example, those guys started in Copenhagen and then decided that San Francisco, for a SaaS enterprise software company, was the right place to scale up their organisation and they pretty much moved there. Other companies in our portfolio like Sleep.io want to be close to the key platforms like Apple and Google and establish a presence there.”“The Europe versus Silicon Valley issue is really pretty old school”
“My view is the best entrepreneurs nowadays go where the opportunities are and they’re often building organisations that are multi location. It happens that as companies evolve, even for the biggest European and US companies, the UK becomes one of their biggest markets such as Twitter, HP, Cisco, Microsoft, eBay – the UK is their second or third biggest market and their most profitable. This has an effect on what the eco-system in Europe is, we have great developer organisations and very important research and development going on in Europe so I think the Europe versus Silicon Valley issue is really pretty old school.”Could you build a successful tech company entirely out of Europe?
Klein: “Like Skype?!”
Burbridge: “Yes definitely. Saul and I were involved in Skype, I know that that was 2003 so nine years old now but that company for various reasons specifically didn’t target the US and all of its growth is outside of the US. They never had an office in the US until it became acquired by eBay.
“Other examples include QXL and LastFM, both had really dominant presences in Europe.”Could a US-based entrepreneur start-up in Europe first?
Burbridge: ”Yes! Take Y-Combinator (YC) for example, a lot of entrepreneurs went over to the US for YC and actually decided to come back to Europe and London to start their companies. So 100%. It can sometimes make a lot more sense for people to focus on what they’re doing here in Europe without the noise, distraction and competing for talent like you might have to do in the US.”“For urban and tech, London is an amazing place to start a business”
Klein: “It also depends on the sector and the market you’re targeting. SongKick is a good example of that. Seven years ago they were alumni of YC when YC was still in Boston and they came to London to start a company because they’re in the business of helping people to discover live music – London is the largest live music market in the world so why wouldn’t you be here?
“If you look at Citymapper for example which is about navigating and getting round cities, London is the number one English speaking city on Twitter and Facebook so for urban and tech London is an amazing place to start your business, same with financial services and I think we’ll see that more.”
Daniel Waterhouse: “There’s some great talent in Europe. Take Roli for instance, they’re a hardware company, and they can find scientists, software engineers, great developers, marketeers – a massive breadth which they’ve been able to get out of London.”
Burbridge: “I think it’s worth going deeper with some other examples such as Nutmeg , it got funding from US investors but launched in UK because the Financial Conduct Authority has a much more progressive view on regulation than the United States.”
Botteri: “For any start-up you want to be where the talent is and the talent in Europe is good.”
Klein: “Some of the biggest online fashion businesses are coming out of Europe, Asos, Netaporter etc.”Is the investment community in the UK incestuous?
Burbridge: “It’s growing. I’ve been here for 10 years and invested for four/five years as an angel and I think it is growing now. We’ve seen 10 times the amount of investment in London just over the last four years.“We’ve seen 10 times the amount of investment in London over the last four years”
“By nature and definition that means there’s probably two or three times the number of funds that were here five years ago It’s less the same people, fortunately the investors that have been successful are still doing it which is fantastic but we’ve got more and more new funds coming in every single year – Google Ventures EU being one of the latest.
“What’s good is that there is more choice for entrepreneurs and it’s bringing best practices to the forefront.”When there’s more choice in investors, does that make your job more difficult?
Klein: “The best companies have a lot of capital available to them, not just in Europe but internationally and I think entrepreneurs really have not just choice, but we collectively see the best deals, we’re chasing the best deals and have to compete to get in tthose deals. Today capital is more or less a commodity, the tech stack whether it’s open source or cloud is relatively commoditised. Investors should work really hard to get into the best deals because they can demand a lot and they should.”What’s the value add for start-ups using European investors?
Waterhouse: ”It’s a bit about shortcuts. Entrepreneurs going on an impossible journey – they’ve got to overcome so many things and the more they can shortcut some of those challenges albeit leveraging our portfolio or experience, it’s really about avoiding mistakes.“An investor needs to get their hands dirty”
Klein: In the last year I’ve started a company and it’s been an amazing experience to go back to the drawing board. In the last 12 months We’ve [Index Ventures] done 31 seed to Series A or bootstrapped growth rounds – an investor needs to get their hands dirty whether they’ve been an operator or not. It’s about getting involved in the team. [...] Investors need to be in it for the long term game.”
Botteri: “We’re trying to bring Silicon Valley experience to the European eco-system.”Two of the firms here (Balderton and Accel) invested in Wonga, was it a bad idea to invest in or was the execution of the idea flawed?
Botteri: “No comment.”
Waterhouse: ”Wonga have come out and said they’re working closer with the FCA, they’ve been pretty clear about what they’re doing now and how they’re moving forward.”
Burbridge: “I know the least about this but I don’t think pay-day lending on the high street is a great industry right. I think there was probably a lot of education around that which probably didn’t get updated for that kind of transaction online. I can’t see how any investor or the founds would go in and try and take advantage of a situation and try and extract as much money as possible.“Investors are looking at the long-term game”
“I’m sure it was all very well intended to bring efficiency to what is not a very perfect system to begin with. My observation is they’re trying to correct it – I think it’s very clear that investors are looking at the long term game, we’re interested in proving the economy, creating more efficiencies and creating value from that. That doesn’t mean trying to play certain industries as that would be very short-term.”Lastly, what are the biggest opportunities going forward? Tech trends?
Klein: ”Strengths in Europe are retail and financial services etc. One of the new things that I see is interesting is Deepmind Technologies which Google Acquired and Swiftkey is also really interesting.
“It’s [...]the emergence of artificial intelligence (AI) and deep technology. Google has AI and smart tech in abundance – AI and natural language is really exciting [...] really using data to find out information in new ways [...] it’s going to make a big difference.”
Waterhouse: ”Hardware is interesting in Europe as we have the talent and design skillset to build interesting stuff.”
Botteri: ” Already we’re seeing cloud computing, Big Data, cloud infrastructure and e-commerce enablement. The things that are more emerging are new competing platforms and devices, they’re evolving.”
Burbridge: ”I’m really interested in information security and cyber security.”
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Marc Kneepkens's insight:
Great discussion with some insiders in VC in UK. This really illustrates the situation for Europe.
A refreshingly objective perspective on what it takes for startups and small businesses to make it and the percentage that actually do.
If you plan to make it on your own, you'll inevitably wonder about the odds of success. Unfortunately, there are all sorts of statistics floating around that, even if they’re true, are usually taken out of context to create a buzz or undue hype.
Luckily, I have no skin in this game. I just thought it might be helpful to provide would-be startup founders and small business owners a little objective, qualitative and, if possible, quantitative analysis that sheds some light on the risks they will inevitably have to take.
First of all, none of the successful founders, CEOs and VCs I’ve worked with over the decades have ever given me a decent argument for disputing the common doctrine that roughly one in 10 startups makes it. Having been in this game a long, long time, that always seemed like a pretty accurate rule of thumb.
Last year Y Combinator’s Paul Graham revealed that, over the five years since his incubator program began, 37 of the 511 companies have sold for or are valued at $40 million or more. I know $40 million seems like a lot, but for venture-backed startups that include the likes of Dropbox and Airbnb, it’s actually not. In any case, that’s a 7 percent success rate.
While many of those companies still have room to run, when you consider that Y Combinator only admits a small fraction of applicants (its acceptance rate has been pegged at 3-5 percent) and it probably does have a reasonable “ability to pick winners,” as Henry Blodget correctly suggests, the 10 percent rule starts to look downright optimistic.
Nevertheless, I always wondered why that didn’t seem to jive with U.S. Census and Bureau of Labor Statistics data that indicate only about half of all small businesses fail within the first five years. While an optimist may see that glass as half full, that, as it turns out, would be a big mistake.
Truth is, just because a business doesn’t fail doesn’t mean it actually pays the bills and makes money.
Related: Why Stressed-Out Control Freaks Make Insanely Great Entrepreneurs
Crunching U.S. Census and survey data The National Federation of Independent Business (NFIB) estimates that 39 percent of all small businesses make a profit over their lifetime. About 30 percent break even and another 30 percent lose money. Moreover, small business owners have personal bills, too. They have to pay for housing, transportation, insurance and energy. They have to put food on the table. So if the business breaks even over its lifetime, that probably doesn’t cut it.
I don’t know what percentage of companies that make money also cover all their personal bills but I think half would be a pretty reasonable guess. And the percentage that pay the bills and provide for some reasonable level of comfort in retirement might be roughly half again. Since the latter is how I define business success, that leaves us with about a 10 percent success rate.
Yes, I know that’s a lot of arm waving but since I actually have some expertise in this area and it does jive with the observed 10 percent success rate for venture-backed startups, I think it’s a pretty darn good number to use in your financial planning. Besides, it’s the best I can do on short notice.
Now, here’s where things get interesting. The obvious question to ask is, what makes the difference between the 10 percent that make it and the 90 percent that don’t? If you ask 10 self-proclaimed experts on the subject, you’ll probably get 10 different answers … and they’d probably all be wrong. It really isn’t complicated and the answer is more black and white than you might think.
You might become one of the 10 percent if you …
1. Come up with a truly differentiated product for a large and growing market that, most importantly, has a value proposition that customers are willing to pay for. If not, you will not gain or maintain market share.
2. Love what you do and have no problem working your tail off day in, day out for years and years, focusing on that and not much else.
3. Actually know what you’re doing, i.e., have solid knowledge and -- better yet --experience, not just in your particular field but also in the basics of finance and running a business.
4. Are a good manager who actually knows what that means. In case you don’t, it means you can develop and execute a plan that gets the job done and delivers products and services on time and on budget that excite your customers.
5. Are an effective leader who understands people. Motivating others is all about building real relationships with real people in the real world. Customers, employees, investors and vendors are all people. That’s what business is all about.
6. Have something inside you – something to prove that drives you to do whatever it takes to win and persevere in the face of adversity, competition and obstacles that every business owner faces.
7. Make smart decisions based on solid information from expert sources and your own intuition, not on popular wisdom or feel-good nonsense.
8. Have the courage and the guts to take big risks, challenge the status quo, face the truth and do the right thing even when it’s the hard thing to do.
If that seems like a lot for someone just starting out, you’re right, it is. While everyone loves to talk about business wunderkinds like Richard Branson and Bill Gates, the truth is the vast majority of successful business leaders had careers in the corporate world that gave them the experience, knowledge and skills to make it on their own.
Personally, I think those who have what it takes will come out on top no matter what they decide to do. If you think you’ve got what it takes to make it big on your own, then I say take all this with as much salt as you like and remember the immortal words of Han Solo from The Empire Strikes Back, who said, “Never tell me the odds.”
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Marc Kneepkens's insight:
Excellent article. What does it take to succeed. 10 points to increase your chances to success.