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Here's the Advice I Give All of Our First Time Founders

Here's the Advice I Give All of Our First Time Founders | Pitch it! | Scoop.it


First Round is a seed-stage venture firm focused on building a vibrant community of technology entrepreneurs and companies.

Aaron Patzer had come to a crossroads. He knew he was onto something with Mint — but he realized he couldn’t be a successful CEO and also run product for the company. “He's one of the very few founders I've seen who knew it was time to let go and hand things to someone new,” says First Round Partner Rob Hayes, who worked closely with Mint. “He wound up hiring this great guy Aaron Forth, and it helped move the company to the next level. That moment when a CEO gives up their core competency to someone else so they can focus on running the company is the moment they become a great leader.”
Hayes started investing in early-stage startup founders a decade ago, and he always gets the same question: “What should I be doing right now?” Through this experience, he's narrowed down his answer to three things. Patzer did a brilliant job at all three, and notably the most important thing on the list: Hiring the right people. “The other two are don't run out of money and always have a North Star,” says Hayes.
While each of these pieces presents a huge challenge, this framework can be very powerful. “Founders who achieve these goals always succeed,” says Hayes, citing Mint's lucrative sale to Intuit. “If they're constantly thinking to themselves, 'Okay this work in front of me... am I actively achieving one of these three things?' they don't fail.” We recently sat down with Hayes to delve into these three areas of focus and tactics to win at each one.


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

Growthink really understands how to create compelling business plans and raise capital, and Growthink's Capital Raising Products succeed in infusing this knowledge.
-John Morris
Managing Director, GKM Ventures,
Board of Governors, Tech Coast Angels

Marc Kneepkens's insight:

Wise advice directly from the insiders of FirstRound.

I can help with hiring, specialty: tech people for startups; fibonaccisequencerecruiting.com

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Before You Make That Pivot | TechCrunch


According to Eric Ries, A pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” The rise of the Lean Startup methodology, however, has led entrepreneurs to indulge and glorify the pivot without fully weighing the consequences. Changing course opportunistically is a key part of starting a company, but the best startups only pivotwhen absolutely necessary.

As an investor, I love the lean startup methodology. In the early days, the risks of large pivots are small and the upside can be huge. Entrepreneurs should be focused on developing MVPs and proving or disproving hypotheses.

This changes once you take venture capital based on a particular strategy. The clock starts ticking and in my experience, pivots past a certain point can often be painful. Read more here:http://snip.ly/ZZrT

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

"Thanks for all you do to encourage entrepreneurship! You and your team have successfully created a road map that most could follow to completion and exit strategy. Yes, it is possible to do these things on your own, but it can be short-cutted by using your strategy."
Jay Ed Moore

Marc Kneepkens's insight:

A pivot is a big decision. Here is some good information.

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80+ Indian startups to work for in 2015

80+ Indian startups to work for in 2015 | Pitch it! | Scoop.it


Startups have far from being the 'cool places to work for' to the 'aspirational brands to make dreams come true, for yourself and for others. Here's a an exhaustive list of 80+ Indian startups to work for in 2015.

2014 saw the much awaited funding rush in the Indian startup ecosystem, an industry which otherwise has been driven by only passion. Startups grew exponentially and so did the aspirational value of working in a startup. Freshers from top engineering and management institutes considered working in a startup at par (or even better) with that of MNCs of the world. Senior management was also opening up to experiment to the roller-coaster ride of startups and many of them decided to steer the ships for them.

More here: http://snip.ly/cCKe

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

"Thank you for consistently enlightening me with your knowledge of managing an enterprise and experiences of successful entrepreneurs of your part of the world, with your personal touch."
Warm Regards,
Bashir Nadeem

Marc Kneepkens's insight:

For my Indian Tech followers and visitors.

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20 Questions You Can Ask to Validate Your Startup Idea

20 Questions You Can Ask to Validate Your Startup Idea | Pitch it! | Scoop.it


Before you commit significant time, money or other resources to launch, take this test.

Do you have a million-dollar idea in your head, just waiting to be acted upon? Or will it be a complete bust -- an idea with no actual potential for return?
This question is one that stops many would-be entrepreneurs in their tracks before they even take the chance and launch their potential business ventures. Fortunately, it is possible to make a more educated guess on your idea’s likelihood of success or failure by taking the time to validate your idea before moving forward with it.
Here are 20 questions you can ask to validate your startup idea -- before you commit significant time, money or other resources to its launch:

More here: http://snip.ly/JuIl

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

"I have so much gratitude in my soul right now. Growthink has helped me to come a long way since I've found the company and started making my business plan.
I'm counting my blessings every day."
Best Regards,
Trevor Houlihan

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5 Tips to Get the Most Out of Networking in the Berlin Startup Scene

5 Tips to Get the Most Out of Networking in the Berlin Startup Scene | Pitch it! | Scoop.it
Five Tips to Get the Most Out of Networking in the Berlin Startup Scene


Marc Kneepkens's insight:

Here is a great story of a 'startup girl' in a not so easy startup environment - Berlin. Learn how to network, all the way...

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Richard Branson on How to Raise Money When You're Just Starting Out

Richard Branson on How to Raise Money When You're Just Starting Out | Pitch it! | Scoop.it
There are other options besides big time investors.

Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.

Q.: G’day Richard. I am a young engineering student with little to no practical experience as an entrepreneur. I think I’ve got a great idea, a ready and capable team, but have little money to pursue commercializing my novel product. I fear that potential investors will not take me seriously because of my age (21) and inexperience. How can I convince seasoned investors to believe in my team and invest in my idea? -- Jordan Gruber, Australia

My friends and I came up with the name “Virgin” one day when we were 15 years old, sitting around in a basement. I was keen on the name “Slipped Disc” for our new music venture, but then one of my friends pointed out that when it came to business, “we’re all virgins; why don’t we call it that?” In our case, inexperience proved to be a huge asset -- if we’d gone with the safer option, I’m not sure that many people would be working out at Slipped Disc Health Clubs or banking at Slipped Disc Money!

Innovation and entrepreneurship thrive on the energy of people who are dipping their toes into the water for the first time. Budding entrepreneurs with fresh outlooks have the freedom to think quite differently, which is tremendously exciting to potential collaborators. However, as you’re finding out, Jordan, translating a new concept into a product can be very daunting.

While you might not yet have the right connections or an “in” with major investors, other people out there do -- experienced businesspeople, in your sector or in others, who were once in your shoes and went on to be successful. These people are potential mentors who can help you on your way.

Mentoring is a subject that is very close to our hearts at Virgin; I myself have benefited from many mentors throughout my life. However, don’t consider mentoring as a quick way to gain useful contacts. A good mentoring relationship is based on more than that -- it’s a way to learn valuable lessons from the mistakes someone else has made.

Additionally, I noticed in your message an emphasis on convincing “seasoned investors” to back your idea. While securing huge sums of money from major business figures might seem like the ideal way to propel a business forward, the reality is that very few ventures win this kind of funding. A better alternative might be an online crowdfunding platform. Websites such as Indiegogo not only have the potential to fund the creation of a prototype to get your business up and running, but they also can result in significant publicity.

Another option is taking out a small business loan. In the U.K. we launched Virgin StartUp, a program that provides loans of up to 25,000 pounds to companies trying to get their ideas off the ground. It is well worth your time to look into similar initiatives in your area, and decide whether a loan is the right step for you. As an added benefit, both crowdfunding and small business loans will mean that you can retain full ownership of your business -- you won’t have to give any equity away to investors.

Here are three steps that can help you discover which approach is best for you:


Always be honest with yourself about your abilities, the work you’ll have to put in to get your company up and running, and the amount of money you’re hoping to raise. Research all the options that are available, and evaluate how they would affect your end goal.

Ask yourself: Is your crowdfunding target realistic? How much of a stake in your business are you willing to give to potential investors?

And if you want to find a mentor who can help give you direction and guidance, make sure you find a suitable one. Find out what they do, whether they’ve mentored others before and which sectors they are interested in.


Attend industry events such as seminars and conferences. Talk to as many people as possible, and do not immediately launch into a pitch of your product. Be sure to listen and learn from what people have to say.

Networking doesn’t stop at face-to-face contact, either; interact on social media, join LinkedIn groups and keep the relationships going online. When you do approach potential mentors or investors, or if you launch a crowdfunding campaign, you’ll have a degree of visibility.

In fact, the more proactive you are in building your profile, the more likely it is that potential investors will feel confident enough to put their faith in you -- and their money in your company. Remember that the more relationships you build, the better the chances that your network will put you in touch with the people who can help your business.


Remember to be flexible. While winning investment might look like the best option now, don’t discount any other opportunities that come your way. For example, crowdfunding might not have the prestige of an investment from a big-time entrepreneur, but it will connect you directly with future customers, and you will have more control over the process.

Keeping an open mind is especially important when it comes to mentoring. Don’t see mentorship as a quick fix for problems, and do not brush off advice. Consider your connection with a mentor as a long-lasting business relationship that can teach you lessons and reduce the potential for failure. But also remember that, as with anything else, you’ll get out of mentoring what you put in.

Making sure that your potential business is a success is not contingent upon gaining a large investment. Many successful companies -- including Virgin -- started with modest funds. Right now, investors might seem like they are the gatekeepers between you and your dream, but the one person who can make your business succeed is not an investor, or even a mentor. It is you.

Good luck!

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

Marc Kneepkens's insight:

Slipped Disc? Always think very carefully about your company name.

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7 Ways to Impress Your Potential Investors

7 Ways to Impress Your Potential Investors | Pitch it! | Scoop.it
Want to impress your potential investors? These are the seven things you should do.

By Barry Newlands Contributor, Inc.com@murraynewlands on Inc.com

Looking for investors for your business is the entrepreneur's version of job interviews. You have to look the part and be able to say the right things when asked to earn capital from them. Investors come from all walks of life, and you have to be able to tailor your pitch to each of them to make your business more prominent to their interests. However, there are some things that remain constant and will work to impress investors and garner the funds you need to take your business to the next level. Here are seven ways that you can impress your potential investors:

Clearly Presenting Your Margins

Investors are not investing in your business simply because they believe in your vision (though they do have to believe in it to invest), they are investing in you to make a little bit of extra money as well. Having promising margins is going to be the best way to impress your investors, but having the numbers themselves is not everything. They have to be presented in a pleasing, professional manner as well.

Show Them Growth Potential

Investors like to see longevity and a stable marketplace full of consumers, so you should be able to show them the value of your business and how that value will only continue to grow. Explain how your business applies to a group of people and how much growth potential your brand has, both in terms of new markets and in revenue streams. Investors want to see that their money is going to keep working for them, so you should look to show them that your business can help them do that.

Have A Clear Business Model

Investors like things that they can work in as well, so having a clear and replicable business model is going to be one of the linchpins to getting an investor to sign on to your business. Ideally, your business model will be scalable and as detailed as possible, as investors are not looking for a static business, but one that will show lots of growth and has a good plan for how to achieve it.

Tell Them What Problem You're Aiming To Solve

A successful business has a clear vision and a problem that they aim to solve with their products or services. This problem should be something that affects a large group of people, as a niche problem will have fewer business opportunities or room for growth. But regardless of the size of your target market, it's imperative that you have a clearly defined problem and a product that promises to solve it.

Prove That You're Different From Your Competitors

Having proprietary ownership over some part of your business is going to be the best way to have a competitive edge--nobody can replicate it, because you own it. These come in the forms of patents, trademarks, and copyrights, but trademark and copyright laws are less favorable for small businesses, so they don't hold as much weight as a patent does. If you don't have any of these things, you can still establish an edge with an innovative outlook instead.

Show Them That Your Team Is The Best

Investors also look at the team behind a potential investment opportunity and want to know that the people that are running the show are passionate, talented, and the best at what they do. So, it's important that you not only hire talented employees, but that you also make sure to show investors that you've got the best team for the job at hand. After all, an idea can look great on paper, but if it doesn't have a great team backing it up, it can still fail pretty easily.

Show Them How You Connect With Your Customers

Having repeat customers is a good sign of a successful business. In addition to this, having personal connections with customers through all avenues is always a good sign to a potential investor. Make sure that you cultivate positive relationships with your customers and that you can prove to potential investors that you have loyal fans that will always be there for your brand.

Every investor is different and will certainly look for different things in each business that they're looking to invest in. As such, you should do your research, know who you're talking to, and figure out how to best capture their attention and persuade them to fund your company. However, despite the inherent differences between individual investors, there are a handful of traits that every investor wants to see in a business before offering to fund it. By following these seven steps and proving your company's value, growth potential, and individuality, you will be able to impress any investor and get the funding you need to take your business to the next level.

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

Marc Kneepkens's insight:

Definitely the way to approach investors. If you can give this kind of information you will turn some heads.

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If You Want A Billion-Dollar Startup Idea, Take A Look At This Chart - Business Insider

If You Want A Billion-Dollar Startup Idea, Take A Look At This Chart - Business Insider | Pitch it! | Scoop.it

Pinterest is the new Craigslist. That’s what Kevin Ryan, a serial entrepreneur believes.
Ryan co-founded multiple startups, including Gilt Groupe, wedding site Zola, MongoDB and Business Insider.
He’s eying new companies to start and turning to Pinterest for ideas. Ryan’s statement that Pinterest is the new Craigslist comes from a chart that was made four years ago by by Spark Capital investor Andrew Parker.
The chart is a screengrab of Craigslist’s homepage and it includes valuable startups that attack specific functionalities within Craigslist. For example, job site Indeed was acquired for about $1 billion and it is competitive with Craigslist’s Jobs section. Etsy is a $1 billion-plus company that competes with Craigslist’s For Sale category.
“Some of [the startups] have IPO’d,” Parker says. “Others are out of business. If you could have made investments in all of these companies back in 2010, you’d have a portfolio of 34 companies with roughly 6-8 billion dollar outcomes, which would likely be one of the best venture funds of the decade.”
Here’s the Craigslist chart: to see more go to: http://snip.ly/hsUi

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Grow Your Business Without Drowning in Debt

Grow Your Business Without Drowning in Debt | Pitch it! | Scoop.it
What should a startup sacrifice to get the funding to fuel its growth?

The startup dream goes something like this: A couple of entrepreneurs with a great idea hole up in a basement and hatch software and social networks that bloom into billion-dollar businesses.

The reality is much more complicated. Businesses don’t bloom into billion-dollar companies without a significant amount of capital. And raising money comes with a thorny question for startups: What might the venture have to sacrifice to obtain the funding to fuel growth?

Giving up equity too early in the life cycle of a company can be extremely expensive. But starving a company of funding out of a fear of giving away too much ownership can hamstring its potential.

Here are three things to understand before raising capital to fund business growth:

1. Equity is expensive.

If you have an early-stage startup with a promising future, giving over equity might end up being the most expensive way to raise capital.

While a venture capitalist or an angel investor might think that a 50 percent stake in your company is a fair exchange for an infusion of funding, you need to look beyond the current state of your business (a couple of coders working at a few computers). Calculate what this means if your company turns into the next Facebook, Salesforce or Instagram.

Instead of trading equity, consider using convertible debt, which delays a valuation of a company until the first institutional investor buys into the firm. At that point, the company will be more mature, which can lead to a more equitable valuation of the startup for founders.

Convertible debt can work well for both investors and entrepreneurs. For investors, it cuts the risk associated with a pure equity stake while maintaining the upside of an equity position. For entrepreneurs, it delays the valuation until the company has matured to a level that makes the assessment more than a guessing game.

2. Self-funding can limit growth.

Bootstrapping a company to its full potential is a lofty goal, but it's almost always unattainable. Businesses simply need capital to fund their growth. And most savvy business owners realize that without outside capital, they will never grow their company to its true potential.

If you're considering self-financing a company, think about the downsides before committing to this approach: Will it impede growth, restrict your market share or lead to a cash crunch?

Self-financed companies can find themselves in an unenviable position possible, running out of cash and desperate for financing. This can lead to a complete loss of leverage at the negotiating table with banks, venture capitalists or private equity groups.

“Entrepreneurs should always have a trusted advisor or CFO who can see ahead and make decisions proactively rather than reactively,” Dusty Wunderlich, CEO of my client Bristlecone Holdings, tells me.

“When entrepreneurs lose cash flow, they give up leverage and negotiating power and risk losing too much ownership in a desperate attempt to raise funding,” says Wunderlich, who is also a partner at private-equity group DCA Capital Partners.

3. The burn rate matters.

A burn rate -- the rate at which a company spends its startup capital -- can vary wildly. Software companies can get off the ground and grow with a slim budget, but manufacturing companies and hardware makers consume enormous amounts of capital.

Bootstrapping a software startup is possible. But a manufacturing company will require significant financing or investor capital from the start.

Every business has different funding needs. But certain warning signs signal that a company is overleveraging or taking on too much debt.

“If you are taking on debt for operating expenses, you are probably not that healthy,” Wunderlich says. “Debt for assets, infrastructure or acquisitions is a more appropriate use of debt or leverage.”

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

Marc Kneepkens's insight:

Don't drown in debt, important, don't grab (easy) funding, think about it thoroughly, get good advice.

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The 5 Things You Need to Land Venture Capital

The 5 Things You Need to Land Venture Capital | Pitch it! | Scoop.it
Find out what VCs look for before investing in a new company.

In the book, Write Your Business Plan, the staff of Entrepreneur Media offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture and what it takes to ensure success. In this edited excerpt, the authors offer tips from an investing expert about what you need to do to improve your chances of getting a VC to invest in your company.

Jim Casparie, founder and CEO of The Venture Alliance, a national firm based in Irvine, California, dedicated to getting companies funded, spoke with several professional investors at VentureNet, a conference run by the Software Council of Southern California.

The individuals he interviewed included David Cremin, managing director of DFJ Frontier; Michael Song, a partner with Rustic Canyon; Bill Collins, managing partner of Publex Ventures; and Robert Kibble, managing partner of Mission Ventures. Some additional insights were also provided by Jon Kraft, chair of the Software Council of Southern California.

So what do these investors prefer to see in a company before they get excited enough to write a check?

1. Seasoning. They’re looking for more experienced, older entrepreneurs who've “been there, done that.” The time of investing in the 19-year-old kid who’s a tech genius isn’t necessarily gone, but the kid had better be able to find an older, seasoned executive to join their team.

2. Customers. Rather than putting the emphasis on the team or the revenue numbers, there seemed to be a new emphasis on the customer:

  • What compels them to buy this product or service?
  • What problems does this product or service solve? Why is it better than the alternatives?
  • Why is it worth the price?
  • Does it compel you to tell others about your experience?
  • Are your customers asking if they can invest in your company?

3. Team. The team is still an important part of the equation, but the entrepreneur is just as important. Here’s what the investors are looking for in both:

  • Passion. The entrepreneur must demonstrate a contagious excitement about their vision for the company.
  • Tenacity. The entrepreneur must prove they have the stamina and willpower to stay with their vision through thick and thin.
  • Flexibility. The entrepreneur must be willing to reevaluate and refocus their plans when things don’t work out as anticipated.
  • Commitment. The entrepreneur must be willing to invest enough of their own money into this project to convince investors they are serious.
  • Teamwork. The entrepreneur’s team must prove it can work effectively together.
  • Coachability. The entrepreneur and the team must be coachable. No team knows everything they need to know to succeed.
  • Knowledge. Investors prefer to back teams that really know their market and have a combined background that is rich and impressive in the niche for which the company is engaged.

4. Opportunity. Investors want big ideas, those that can change the world. Ideas that change our behavior, culture or way of thinking. Ideas that can build $100-million-size companies. Anything less is too speculative. The risks of investing in a company are so great—and the chances of a reward so small—that investors can’t afford to bet on opportunities that won’t surely have huge payoffs. And one of the biggest problems when addressing opportunity is, “Am I too early?” Investing in a huge opportunity five years before the market will recognize and embrace it is a very frustrating thing. Not only will you lose your investment, you’ll have to suffer the extreme frustration of watching someone else make a lot of money on the foundation you helped build.

5. Business model. Will the numbers map out? In other words, once someone takes a sharp pencil and starts tracing where every revenue dollar comes from and then seriously challenges every expense it’ll take to generate that revenue dollar, will you have

  • a profitable model?
  • a repeatable model?
  • an expandable model?
  • a predictable model?
  • a defensible model?

Many entrepreneurs fail because they don’t know how to do this type of exercise with a “real world” view.

So how do you and your company match up? If you were honest and found areas where you were lacking, please find someone who can help you fix your problems before you approach anyone to invest. Your extra investment of time will significantly improve your chances for funding.

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

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What Makes A Killer Business Pitch For Branson And Other Top Investors

What Makes A Killer Business Pitch For Branson And Other Top Investors | Pitch it! | Scoop.it
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.

But they don’t make investment decisions lightly, and entrepreneurs hoping to secure some of their cash must deliver the Holy Grail of business funding; the killer investment pitch. But what exactly is it?

Virgin founder Richard Branson has invested in around 40 start-ups in recent years. In his view a pitch should ‘short, to the point, and fun to deliver’.

He says: “Keep it tight and simple. Explain what your company does and how it will change business for good, and highlight the strengths of your team to make it happen. Do this with an entertaining, unique and quick delivery, and you should make a lasting impact.”

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.

He said: “It took him two minutes to explain how his storage company Boxhug worked, how it could improve people’s lives, and how it could scale. Then he gave everyone on the judging panel a hug – a great way to end his pitch!”

It takes a certain skill to be able to demonstrate that level of knowledge of your business model, its financial architecture, and target market in just two minutes. Yet the average length of a funding pitch to angel investors is ten minutes, still not a huge amount of time to cover the essentials in enough detail to satisfy a potential investor. However, many are not looking for perfection.

In theory, a killer pitch consists of many different aspects, says Christoph Janz founding partner at Berlin-based early-stage VC Point Nine Capital; an experienced and well-rounded team, a large market opportunity, a proven product, scalable customer acquisition channels, clear competitive advantages.

“In reality, at the seed level, which is where we invest, almost no start-up ticks all these boxes,” he says. “However, as former general and secretary of state Colin Powell once said, ‘you hire for strength and not for lack of weakness’.

Similarly, Point Nine Capital doesn’t look for the ‘perfect’ pitch, but for awesomeness in some areas; typically some combination of a gorgeous product, enthusiastic beta users and extremely passionate founders.

Janz says: “One stand-out pitch I recall, which led to an investment from us, came from Mambu, a cloud-based banking software platform. Included in the pitch was the fact that Mambu enables financial institutions to provide banking services to the billion or so people on the planet who don’t have a bank account, and could therefore have a huge beneficial impact on the lives of tens of millions of people.”

However it is often the deal-making activity of venture capitalists that receives the most interest. VCs receive thousands of business proposals every year, yet only invest in a few businesses, in an intriguing a decision-making process that Jeffrey Petty and Marc Gruber, academics from the University of Lausanne in Switzerland, set out to investigate.

They analyzed 11 years of contemporaneous deal-related data from a relatively small European VC firm that focuses on investing in companies within a specific high-tech, high growth industry. During this time frame the firm received 3,631 proposals and made 35 portfolio investments across two funds, at an average acceptance rate of one per cent.

Among the key conclusions from the research was that ‘no’ was not necessarily a definitive rejection. In total, 438 proposals were submitted more than once, with the acceptance rate for resubmissions approximately the same as for original submissions.

A surprisingly high 10% of the 3631 pitches were classified ‘dead’ because the VC firm did not have the opportunity to pursue them. Around half failed to respond to the VC’s requests for more information, and the rest simply appeared to have changed their mind about VC funding.

Product and service-related criteria were a key reason for rejection, but rarely the management team.

“You can always bring in a management team,” says Gruber.

The most important criteria for deal rejection were VC fund-related. Many viable pitches failed because of VC perception that evaluating, monitoring or managing the deal would take too much time.

So what can entrepreneurs take away from Petty and Gruber’s research?

“If the VC has shown any interest at all in the proposition, the entrepreneur needs to stay in touch with the VC and build a relationship. They should not be afraid to resubmit a proposal at a later date,” says Petty.

They should also do due diligence on the VC firm and tailor a proposal to the firm’s portfolio strategy at that point in time.

“Two firms with similar investment strategies may view the same proposal differently because they are focused on different criteria or are at different stages in their fund’s lifecycle,” adds Gruber.

In a nutshell, a killer pitch is one in which the underlying message is crystal clear, says Andrew Morris, Chief Executive of the UK Academy for Chief Executives.

He said: “This venture is the result of creative thinking, validated by thorough research and supported by cautious forecasts, all delivered by the most committed professional team in the business.”

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

Marc Kneepkens's insight:

A good pitch is essential to get funded.

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10 startups that are punching way above their weight class - Silicon Valley Business Journal

10 startups that are punching way above their weight class - Silicon Valley Business Journal | Pitch it! | Scoop.it
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.

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Marc Kneepkens's insight:

Good startups don't always require massive funding, although some of the funding amounts here are pretty big still.

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Eric Schmidt’s Farm2050 Collective Will Back Agriculture Tech To Feed Earth’s Growing Population | TechCrunch

Eric Schmidt’s Farm2050 Collective Will Back Agriculture Tech To Feed Earth’s Growing Population  |  TechCrunch | Pitch it! | Scoop.it

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

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Marc Kneepkens's insight:

Finally some tech giants are addressing some real problems. Here is an opportunity for agricultural ideas and startups.

Marc Kneepkens's curator insight, November 20, 2014 10:05 AM

An opportunity for ag startups

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18 Ways to Sink Your Startup (Infographic)

18 Ways to Sink Your Startup (Infographic) | Pitch it! | Scoop.it


If you're making any of these mistakes, your business will pay the price.

Successfully building a startup can feel like the sort of thing that requires planets aligning. Screwing up a startup, however, is incredibly simple.

Some entrepreneurs try to do it all on their own. Some don’t get along with their co-founders. Both of these mistakes can stop a company before it starts. Other things to avoid: hiring bad computer programmers, raising too little or too much money and, of course, a half-hearted effort.

These are just a few of the fatal mistakes that can befall startups, as illustrated in the infographic by Anna Vital, information designer at Funders and Founders. Take a look and see if you’re in danger of falling into these traps. See infographic here: http://snip.ly/QQUG

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 "I like the style of presentation, the breadth of information given, and the myriad ways to apply the information. Great stuff ~ thanks so much!!"
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Marc Kneepkens's insight:

Great infographic.

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At Harvard, Wharton, Columbia, MBA startup fever takes hold - Fortune

At Harvard, Wharton, Columbia, MBA startup fever takes hold - Fortune | Pitch it! | Scoop.it


Across the U.S., business schools are ramping up entrepreneurship programming, as students pursue dreams of lucrative innovation, and startup glory.

The Graduate Management Admission Council’s recently released 2014 Alumni Perspectives Report reveals a significant rise in the number of business school graduates launching new businesses. From a survey of self-employed alumni who graduated from 1959 to 2013, GMAC has found that 45% of 2010-2013 grads started businesses directly after finishing B-school, while 80% of self-employed alumni from years past worked several years for an employer before embarking on entrepreneurial ventures. Read more at:http://snip.ly/eLfg

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"The team at Growthink delivered exceptional quality service in every aspect of their client services. Their staff of professionals were extremely instrumental in fine tuning my creative vision into a well developed business plan."
  James E. Spence, Jr, Founder & CEO
At Bread Boutique

Marc Kneepkens's insight:

The 'culture' of entrepreneurship and creating startups is benefitting the business schools.

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Five US tech hubs you probably didn't know about

Five US tech hubs you probably didn't know about | Pitch it! | Scoop.it


These cities might just be the next Silicon Valley.

Move over Silicon Valley. The current tech boom is not just in the Bay Area, and some unlikely cities are gaining traction as key hubs.

While places like San Francisco, New York City and Austin, Texas, are often cited as thriving tech areas, other areas are gaining ground.

"These are areas that for the most part have a cheap cost of living and are major company hubs," said AJ Smith, a spokeswoman for the financial advice tech start-up SmartAsset.

Because every major company and government agency has a growing demand for skilled tech workers, more cities are attracting tech talent, she said.

"That is how these places become tech hubs," Smith added.


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"Thanks for all you do to encourage entrepreneurship! You and your team have successfully created a road map that most could follow to completion and exit strategy. Yes, it is possible to do these things on your own, but it can be short-cutted by using your strategy."
 Jay Ed Moore

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The personal costs of raising money | VentureBeat | Entrepreneur | by Francisco Dao, 50Kings

The personal costs of raising money | VentureBeat | Entrepreneur | by Francisco Dao, 50Kings | Pitch it! | Scoop.it


In the tech industry, we celebrate raising money as a victory second only to that of a successful exit. But there's a huge downside to raising money that isn't often discussed.

And while I recognize that venture capital is often an unavoidable requirement for growing a business, most entrepreneurs, and the tech community at large — who often seem to push people into raising VC — would be better served viewing it as a necessary evil as opposed to an absolute win.

I’m sure you’ve heard the horror stories of entrepreneurs getting fired from their companies by their VCs, but most of those stories only tell the tale of the final straw. Have you ever thought about all the intermediate steps and indignities that came before the firing? Before those entrepreneurs signed the first term sheet, whatever they were working on was theirs and theirs alone. If you think about it, it’s a long journey from owning it all to getting fired from your dream. That’s a journey that is rarely discussed and not well understood.

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"I have so much gratitude in my soul right now. Growthink has helped me to come a long way since I've found the company and started making my business plan.
I'm counting my blessings every day."
Best Regards,
Trevor Houlihan

Marc Kneepkens's insight:

Keep your independence or work for the VC's? Big question.

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5 keys to getting your startup story heard

5 keys to getting your startup story heard | Pitch it! | Scoop.it
Tips for creating not only a story, but momentum to carry you through the beginning stages of any new venture.


Marc Kneepkens's insight:

Good advice.

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The ultimate guide to pricing your company for a fundraise (Or, how much is too much?) | VentureBeat | Entrepreneur | by Armando Biondi, AdEspresso

The ultimate guide to pricing your company for a fundraise (Or, how much is too much?) | VentureBeat | Entrepreneur | by Armando Biondi, AdEspresso | Pitch it! | Scoop.it
Your company’s valuation is probably the single most important number in your whole fundraising story.

Your company’s valuation is probably the single most important number in your whole fundraising story.
Sure, you need to have some early traction, you need to have a product out there and a convincing enough team; but those are prerequisites. Don’t even go into a fundraising conversation if you don’t have them, and much has been written about what people look for nowadays.
But valuation? That’s where you make or break the conversation. If yours is too high, potential investors will prioritize other opportunities over yours; if it’s too low, they will ask themselves what’s wrong.
If the valuation you’re asking for is completely off the chart, that’s a huge red flag and it signals that you have little or no idea what you’re talking about (and leaves investors wondering what other things you don’t have an idea about). Plus, if you look for answers online, the average one you’ll get is: “it depends.” Yeah, thanks.
So let me break down what valuation you should target based on the stage you’re in, which is, incidentally, also what the average investor expects to hear based on the valuation of the company you give them:
Up to $1 million valuation: This is probably what you should be aiming for if it’s the first external money and/or your first company and/or you’re taking money from friends and family, and/or you barely have a prototype (or a landing page and/or a few thousands in users/revenue). This is also what you’ll get if you’re selected for an accelerator program (or a little less in some cases, a little more in others). Also consider that U.S. people will be ok buying at around $1M while the rest of the world will be a bit more comfortable buying at around $500K.
$1-3 million valuation: This is a price you should use to incentivize and reward the early movers so you can build momentum on the fundraising. This might mean the first $100,000-250,000 of angel investors not directly related to your friends and family network, or the network of angels surrounding the accelerator (if you joined one). To justify this valuation, you don’t really need anything more than the requirements of the previous stage, just the fact that somebody else — besides you, your cofounders, and your dog — believes in what you’re doing enough to throw some money at you. It’s called “social proof.”
$3–6 million valuation: At this price you are expected to not only have a product out there but also to have 5-20 percent month-over-month growth rate for at least 3-6 months. Use this rule of thumb: Add $1million to the valuation for every 5 percent of traction month-over-month you’re gaining. If you have a previous success under your belt, you’ll be able to raise at this valuation with less validation, but do remember that this is pretty much the range at which every startup in the world tries to raise the first $500,000-750,000.
$6–9 million valuation: If you’re a Y Combinator company nowadays, you can pretty much raise at this price with the same validation and metrics as in the previous category, or less. But if you’re not, this is where you can go with around 6 to 12 months of operational data plus 10 to 25 percent of month-over-month growth. At this point, traction is not enough though; absolute numbers become important. Investors will expect you to have $30,000-50,000 per month in revenue or more, and will usually be fine in buying at a valuation 100X your monthly revenue or 8X-9X your yearly revenue. Your target raise should be $1–2 million.
$9-12 million valuation: Now things start to become interesting. For this price, you’re not expected to be the scrappy startup anymore; you’re expected to be an actual company. You’ll need an established product out there, 12-18 months of operational data, and some interesting absolute numbers paired with a consistent month-over-month growth rate (the bigger the growth is, the smaller the absolute numbers need to be). But, more importantly, people will want to take a look at the cost structure, how you managed it, and how close you are to profitability. Your target raise should be $2–3 million.
$12–15 million valuation: To raise money at this point, the main question for which you need a very good answer is: “How do you intend to grow to 10 to 20 times the valuation investors are paying for right now?” So, besides the already-mentioned elements, what becomes really important is the go-to-market strategy you’re already executing to gain market share, and to go from initial traction to initial scale. “What are the customer lifetime value (LTV) and customer acquisition cost (CAC) calculations?” is another typical question. Know the answer. Your target raise should be $3–5 million.
The overall issue is that the average founder is as lousy at pricing his own company as he is at pricing his own product. The two kinds of valuations aren’t that different. They’re both sales — one is a specific product and the other is a whole company. In the same way the price of a product is a proxy for its perceived value (you expect something more expensive to be more valuable, after all), the price of your company is a proxy for the expected underlying value (ergo the metrics it’s generating). Be very aware of that and deviate from the framework at your own risk.
Of course, caveats apply:
A) You can optimize for speed or valuation; it’s very hard, if not impossible, to do both.
B) The spread between investors from the U.S. and from the rest of the world is real, so take into consideration where your target investor is from.
C) Different investors will want different things; the earlier ones will be more valuation-sensitive, while the later ones will be more ownership-sensitive.
D) Valuation really is a promise; to go the next stage, you have to materialize the current one. Unless you’re an outlier. If that’s the case, just feel free to ignore every single word I’ve said so far.
By Armando Biondi. He is cofounder and COO of AdEspresso, a Saas Solution for Facebook Ads Optimization. He previously cofounded five other tech and non-tech companies. He’s also an angel investor in Mattermark and 14 more companies. He’s also part of the 500 Startups network, and is an occasional mentor.

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Marc Kneepkens's insight:

Valuations are essential in funding negotiations.

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CEO Sundays: 6 Effective Ways to Run Your Startup Into the Ground | Techli

CEO Sundays: 6 Effective Ways to Run Your Startup Into the Ground | Techli | Pitch it! | Scoop.it
The reality of being an entrepreneur, however, means enduring a turbulent, unavoidable mental and emotional roller coaster.

Anyone can start a business. Find a name, fill out the articles of incorporation, pay a fee to file and publicize it as directed, and you’ll be well on your way to becoming the next Mark Cuban or Lori Greiner. It’s easy on paper.

The reality of being an entrepreneur, however, means enduring a turbulent, unavoidable mental and emotional roller coaster. It’s a hard ride to success.

But, if along the way you decide that success isn’t your thing, here are six calculated strategies that will lead to your startup’s ultimate demise (so you can get off the ride early):

1. Don’t Prepare for Slow Growth

Many startups fail because they simply run out of money. Why do they run out of money? They couldn’t get customers fast enough. When you get started building your startup, your projections for revenue growth might be up to six times the speed of reality. Reality is a bitch.

To ensure a quick exit: Quit your day job, and don’t bring in any investors who may provide the runway you need to prepare your startup for long-term success. You built an amazing widget, so you’ll be replacing your current salary in a month or two. Your savings account will be all you need to weather your ramp-up period.

2. Don’t Worry About Customer Churn

You’ve been landing new customers at a pretty good clip. Evidently, people are married to the idea that your product is going to meet their needs. But the honeymoon ends, and reality sets in. Customers are fighting with your product every day. Your product’s little quirks are getting annoying, and customers are starting to regret their decision to buy.

People don’t come with instruction manuals, so why should your product? Surely, all of your customers have read John Gray’s “Men Are from Mars, Women Are from Venus,” so they’ll totally understand when your support team needs to go to their “cave” immediately following a new feature release. Your lack of support should ensure that your customer divorce rate exceeds the national average.

3. Ignore the Market

No matter how wonderful your product is, it will fail if it doesn’t solve a real problem in the marketplace. People don’t just throw money away; you have to satisfy a real need. If you’re not fulfilling a true need, you’re well on your way to killing your startup. Reaching in too many directions is another great way to add to the pain, as a one-size-fits-all startup typically fits none.

For those of you who didn’t assume a perfect fit right out of the gate, you may have stumbled upon a market fit, so you’ll need to take a page out of Blockbuster’s book to drive your business into the ground. Avoid pivoting your business in any way to react to — or, worse, proactively anticipate — market changes.

4. Under-budget and Overspend

Everything in business costs money. Mismanaging that money is essential to killing your startup. When planning projects and campaigns, underestimate how much money it’ll take to bring them to market. This is typically accomplished by utilizing textbooks rather than actual data analysis and research.

Under-budgeting in this manner will drain a large portion of your assets, but it’s possible you have venture capital money by now. Those investors expect you to spend all that money quickly, so you’ll definitely want to start pouring money into large, long-term expenses, like platinum conference sponsorships and five-year leases on swanky office space that you’ll definitely “grow into” someday. Once you’ve blown all that cash and have little to show for it, your down round will surely kill your startup’s buzz.

5. Stop Marketing

You need to drop out of the conversation. There’s a McDonald’s in nearly every city in the world, and it still pours money into market research. If McDonald’s needs to remind people it’s around, your enterprise startup certainly does. Luckily, if you kill the buzz early enough, you can avoid being resurrected by a rabid, loyal following.

Stop all sponsorships, remove paid advertisements, and avoid networking at business conferences and other industry events. These types of activities will lead to higher sales, better business relationships, and a stronger overall business. By halting marketing efforts, you can ensure your startup rests in peace.

6. Go Solo

When you started the business, you did it by yourself, and like the captain of a sinking ship, you probably don’t want others’ blood on your hands. Some entrepreneurs have it easy because they already assumed they were capable of accomplishing it alone, but others still have a healthy, autonomous business to dismantle.

By taking the load on yourself, you’re ensuring that your business will fail. Larger competitors working longer hours (some even working with your former staff) will outperform you on every level, and natural selection will implode your startup, leaving you free of responsibility and able to begin anew.

People kill their startups every day, so why can’t you? If you remove your nose from the grindstone and stop listening to what the market and your customers are telling you, you’ll be well on your way to joining them. You may end up in the same startup graveyard, but at least you’ll be one of the few who actually understands how you got there.

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Marc Kneepkens's insight:

Point 1 is a little confusing, it's what you're supposed NOT to do...

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The 16 Best Startups That Launched In 2014 - Business Insider

The 16 Best Startups That Launched In 2014 - Business Insider | Pitch it! | Scoop.it
These are the best new startups this year.

2014 was a great year for consumer tech, so we decided to take a look at the best startups that launched this year.

When looking at the best startups, we took into account factors like funding, revenue, growth, and investor interest.

Did we miss a great startup that launched this year? Let us know in the comments!

Read more at http://snip.ly/BW0g

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Marc Kneepkens's insight:

Amazing how some ideas attract millions of dollars in funding.

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Psychology of a VC and how to take advantage of it | VentureBeat | Entrepreneur | by Mo Marshall

Psychology of a VC and how to take advantage of it | VentureBeat | Entrepreneur | by Mo Marshall | Pitch it! | Scoop.it

In the startup community, we often hear and read a lot about the entrepreneurial struggle — the daily difficulties and challenges facing those building companies. Rarely, however, do we hear about the other side of the equation — the investor struggle. Although it may appear that the life of an investor is a charmed one filled with great travel, luxury hotel and amazing conferences that couldn’t be farther from the truth.

When you ask any VC how it is going you always get the same answer: amazing. Company XYZ is a home run! There is a sort of unwritten law that if you are a venture capitalist you cannot perpetrate any fear, any weakness or hesitation. Basically, a sort of conviction that venture capitalists’ success is function of a never ending positive attitude: aka the right to be dis-illusional.

There is a long often tedious path that a VC must go down, in order to successfully sign a term sheet and/or have the opportunity to invest in a company. The things people often see on the surface are only a fraction of the life of a VC and don’t reflect the regular “struggles” that go on daily basis behind the scenes.

Don’t get me wrong, I think that being a venture capitalist is an amazing job (add in all the stuff you love….) but I believe that understanding what goes on behind the scenes can be helpful to entrepreneurs.

Things for any entrepreneurs to keep in mind…

1. The hunting struggle

I personally believe that in Europe, to be a successful venture capitalist, proactive hunting is a major source of competitive advantage: this is due to both the level of maturity of the ecosystem and the high level of geographic fragmentation. Therefore, a lot of the discovery process tends to be a random walk and as such sometimes feels totally exhausting (even physically). I have no doubts that some venture capitalists at some point suffer so much from the no-deal syndrome that intentionally or unintentionally they decide to compromise: the must do deal. Sometimes an investor is on the hunt for 15 months without doing a single deal and then, all suddenly, he/she does two deals in a month.

When you meet an investor always try to get a sense of where his/her head is vis-a-vis the hunting struggle. A simple innocent question such as When did you do your last deal? has the potential to reveal great insights. Other questions that can help entrepreneurs understand the psychological dimension of the hunting struggle are questions such as Where are most of your investment located? or How do you find out about investment opportunities? Keep in mind that investors do not change their behaviors often. If your target investor only invests via referrals of trusted party make sure you build strong relationships with people he/she knows.

2. The decision struggle

Making binding decisions is always a complex process in any field. It’s even more so in venture capital because once the decision is made it’s generally extremely difficult to reverse.

The decision struggle has two different dimensions: first, the venture capitalist needs to convince himself/herself about the investment. Second, depending on the partnership decision making process, he/she will also need to convince his/her partners. Different investors approach this problem in different ways. I have noticed that in Europe, a very common way to deal with the decision struggle, is to procrastinate. Some investors never give an answer and keep going asking for additional data points in the hope that the data will make the decision for them. I have never seen data making decisions by themselves and I am pretty sure it will never happen. Still the practice is quite well spread.

Understanding the decision making process is the key. This is not easy because, on the other side, venture firms make a deliberate effort to obfuscate their process.

First, try to understand if you are talking to a decision maker (aka partner). If you are stuck talking to a non-decision maker try to play the venture firm politics until you find a way to engage with a decision maker. It’s also very important to understand how the firm decides and the partner’s role in that decision. Best way to learn this is to ask direct questions and call other entrepreneurs who have already gone through the process with that specific firm/partner.

What’s more…When you engage with a venture capitalist you never engage with a single person but with the whole partnership. If you like it or not there are times in which your investor will need to regroup with his/her partnership in order to make a decision. Never forget the partnership dynamic.

3. The passing struggle

As an investor, 99 times out of 100 the answer is NO. While it’s tough for the entrepreneur to hear, telling someone who is working 24/7 on his/her dreams…sorry you are not good enough is NOT a pleasant experience!

There is a human and therefore emotional dimension in passing on a deal but I want to make clear that this is a symmetric feeling: the rejection that any entrepreneur feels, is often associated with a sense of guilt on the investor side. This becomes significantly more difficult when the investor likes the entrepreneur. I try as much as I can to be transparent and provide a clear view of the rational behind the decision making process whether it’s personal reservations or the pass is driven by partnership dynamics. However, I it’s not always easy.

In my personal experience time (or lack of it) can also be an influence. The partner looking at the deal might just be swamped with other deals and as such does not have the head space to drive and manage the decision making process. It is also totally legit to pass on a deal based on a very personal rational: I am just not the right investor for that type of company (e.g. I would not know how to help).

As much as possible try to read the situation and develop your own view on why such and such decided not to invest. Focus more on the relationship aspect especially if you really like the investor. The why question is key. If you see that you are not getting a clear answer start thinking why you are not getting such answer… Keep in mind that this can be a unique opportunity to build a strong relationship with your preferred investor. Getting a no today might mean a yes in the future. Leveraging the guilt that the investor might feel in passing on your company is a great technique to get tons of free help and support.

4. The company building struggle

When I meet an entrepreneur and consequently decide to invest, I always do it on the basis that he/she will always know much more than I will ever be able to understand about his/her business. This is the whole point about investing: supporting with cash the dream of an entrepreneur and becoming part of that dream too: almost by osmosis.

Good investors try to help the entrepreneur with whatever means they have: leveraging their network for good hires, sharing cross portfolio knowledge, being available as an external sounding board, psychological support, practical support, etc.

Sometimes however you want to help but you feel useless and unappreciated. The harder you work or try to be supportive, the less impact you have and less appreciation you gain. Sometimes my inability to engage with an entrepreneur lasts a short period, other times a longer period. My reaction has been always the same: work harder and try to be there when needed. Be supportive without being a pain.

I have learned that sometimes it is better not to try and just let it go if this is what the entrepreneur wishes.

Think of your investor as an extension of your team and figure out what’s the best way to manage/motivate him/her. Do not think that all the investors need to be managed in the same way: try to understand who is the person, his/her strengths and if and how he/she can contribute to your success. A disengaged investor might be what you want but might also be a missed opportunity for your company building process.

5. The rumors struggle

I often hear things where the facts as I know them are completely re-arranged. I therefore assume that this happens a lot and that in many cases it’s just more difficult for me to recognize the truth because I am not familiar with the matter. To be clear I do not think this is the result of shabby tech media or blogger community: I actually find some of the written pieces out there completely brilliant. To write you need to be able to articulate an argument with some depth. I am referring to some sort of low level gossiping that flows in the industry.

Recently I heard an entrepreneur totally re-shaping my thoughts on a startup to the point that I could not recognize myself in those thoughts. Funny enough I was furiously attacked for my views and what I had supposedly said… without for a single moment the person in front of me feeling the need to confirm Roberto, did you actually say this? Why? Are rumors the real reality?

Do not judge your potential investor depending on what you hear in some random rumors. Overcome the he said/she said logic. Do not listen to gossips, do your homework, talk to the entrepreneurs that know him/her personally: both failed investments and successful ones will give you the best reading on your potential future investor. Do not be concerned to ask very direct questions. The best investors will give you very direct answers.

In conclusion, I do however believe that to be an early stage investor you must be a structural optimist. You need to be aware of the struggle but like a ball be able to bounce around and every time higher and above any struggle. If you do not have a similar attitude please change job: we are here to change the world.

As an entrepreneur, now you have a bit more insights about the psychology of a venture capitalist. Either you are soon going out to raise money, or you want to improve the quality of your interactions with your existing investors, use the tips above and keep thinking about the symmetric dimension of the struggle.

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What We Learned From 40 Female YC Founders - Y Combinator

What We Learned From 40 Female YC Founders - Y Combinator | Pitch it! | Scoop.it

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.

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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."

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New accelerator is solely for firms with a female founder

New accelerator is solely for firms with a female founder | Pitch it! | Scoop.it

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."

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Marc Kneepkens's insight:

Another great initiative for women in technology and startups

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6 startups that passed Homebrew partner Hunter Walk’s terrifying ‘10-year’ test

6 startups that passed Homebrew partner Hunter Walk’s terrifying ‘10-year’ test | Pitch it! | Scoop.it
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.

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