Bootstrapper.com - Confessions of Serial Entrepreneurs

As a proud SIIA Previews industry partner, I encourage you to apply to present your early-stage content company before an audience of more than 200 potential business partners, customers, investors, and acquirers at the Software & Information Industry Association (SIIA) Previews event January 26th, in New York City.

The November 21st deadline is fast approaching for innovative start-ups interested in presenting at this third annual event. For added value, each Presenting Company will have a table-top display during the Networking Reception that concludes the event.

There is NO FEE to apply - do so NOW
Richie

I would like to officially announce that the Early Stage Summit will be on October 2^nd 2008.  The Early Stage Summit aims to fill the gap in NYC in the venture community by providing a forum for great companies to show off their products to the top investors from around town and also from around the world.

The Early Stage Summit is being produced by Bootstrapper.com with the help of Richmond Events, Susan Hahn & Associates, Pillsbury Withrop, Mashable, Seedingit.com, StartupHappy.com, SquareSpace and the Connectors Fund.

The goal is simple, allow 15 great companies to present in front of investors who will give live diligence feedback to help the companies understand themselves better. The event will be broken down into Tracks along industries and each will feature a keynote, a panel of investors, 3-4 pitches followed by live diligence from our investors followed by a chance to meet with the companies of your liking in our breakout rooms.

The event is by application only and I urge anyone, investors, entrepreneurs or press that is interested in attending to apply at EarlystageSummit.com. I’m also available for questions if you want. 

I usually don’t like to re-hash posts, but after reading what Michael Arrington just wrote for Tech Crunch, I felt like the advice was perfect for this forum. His original article on effective demos can be found here.

Below are observations taken from sitting through hundreds of phone and live demos at Techcruch50.

If you are presenting to a client, investor or partner keep the following in mind.

• Show your product within the first 60 seconds. If you have to lead in with fluff, your product is incomplete, too complicated or not very useful in the market.
• The best products take less than five minutes to demo
• Leave people wanting more. Be minimalistic in your presentations. Let your audience lead the conversation. People are far more likely to remember you if they are make “discoveries,” and not having them forced down their throat.
• Talk about what you’ve done, not what you’re going to do.
• Understand your competitive landscape–current and historical. Know who has attempted what you are doing in the past and who is in your space today. If speaking about companies in past tense, know why they succeeded or failed. If speaking about your current competitors, know how you are different.
• Short answers are best. From my own experience it is tiring hear some drone on and on when trying to answer a question.  Use words sparingly.
• PowerPoint bullet slides are death. There is enough about this elsewhere.
• USE A HANDSET ON A LANDLINE!!! I’ve been on calls where I’ve wanted to reach through the phone and strangle entrepreneurs because they decided to call me on skype.   Skype is great, except when there is a lag, or the line is choppy.  Also don’t use a speaker phone. The echo blows!!!
• Answer questions honestly. If you don’t know the answer say something like “Hmmm… that’s a good question. Let me think about that for a second,” or “I’m not really sure, I’m going to have to think about that for a bit and get back to you,” or “I’m not sure to be honest. What do you think?,” or even that you will cross that bridge when you come to it. Just be honest. You won’t know the answer to everything unless you are a bullshit artist.
• Always confirm the time of your meeting/call, and always be 15minutes early.
• Practice. Practice. Practice.

If you have anything else to add to the list feel free to comment below.

In our daily routine, we hear from numerous companies looking for ways to improve their pitch and overall web strategy.

I found this comment on the NextNY discussion group, and felt that it was insightful advice. In an interview Guy Kawasaki; the founder of Garage Ventures, was asked:

Q: So with all the advice you’ve given on pitching VCs, have you seen an improvement in the quality of pitches to Garage Technology Ventures?

A: Honestly, they’re not that much better. They are still too long, still using meaningless buzz words like “revolutionary,” and still don’t have credible business models. If only they would adhere to the
10/20/30 rule of Powerpoint: Ten slides, twenty minutes, 30 point font.

So the moral of the story is

Keep your powerpoint presentation simple.

• Make it readable form 20 ft away,  or better yet don’t include much text at all.
• Remove the words “revolutionary,” “World Changing” and “This is going to be huge” from your vocabulary FOREVER!
• Stop mentioning that if you can achieve just 1% market share of an industry, you will be able to create a 100 million dollar company.
• Be different / Be interesting / Provide Value

If you want to learn more about effective pitching please see Guy Kawasaki’s blog post on the 10/20/30 rule

Just before we go, we leave you with a short piece on how to turn a compelling speech into utter PowerPoint  boringness:

http://tinyurl.com/5dd59t

So last week I co-hosted the first Empire State Investor Conference. A friend of mine at SCIUS Capital approached me to help out with it and it went very well. We had about 15 investors sit and listen to pitches from 4 vetted companies (we started with more companies than we could count) and got a lot of serious interest in them. The event was hosted by Sun Microsystems & Cooley (a great law firm) along with Bootstrapper.com.

I got to see a bunch of buddies from the space who came to hear and hopefully invest and got to see some interesting companies. It was the first one so it was a bit rough around the edges but it was great overall. Next time, we need to coach the presenters more about how to present. One of them in particular had a very cool product but focused on the engineering of the product (a no no) instead of functional use. He was in love with his product. When someone is in love with their product, they are usually the worst presenters possible. Surprisingly passion (despite what most people say on the surface) is a horrible thing when taken too far in a presentation. You lose sight of the goal which is sales in some way. This is akin to someone going shopping for a camera and getting lost in the specs instead of caring about how good the dam pictures are.

Another company was a web 2.0 advertising play by someone who admitted to not know anything about web 2.0. It irritated the heck out of me though it’s a very good idea and one that i had myself.

The two best presenters were PriceProtectr.com which is just awesome. James who ran the event with me owns this startup himself and MediaPredict.com, which is one of my favorite startups in NYC and an amazing product that predicts stuff accurately.

Anyway, hope to see more of you at the next one. If you’re an entrepreneur apply, if you’re an investor reach out and I’ll consider saving you a seat.

Angel investors are a unique breed when trying to obtain financing for your venture. They listen to your presentation, challenge every loophole and bottleneck in your strategy, they are due diligence experts in their respective fields, negotiators of investment terms, and mostly importantly (to you) the ones who sign on the dotted line to fund your company. Before presenting to individuals like this, you must realize up front (and be honest with yourself) that mostly likely you’re not ready.  

As an entrepreneur, you only have previous experience presenting to (and being in front of) your family and friends. Whether you want to believe it or not, they are somewhat biased toward your venture- whether good or bad- and they’re probably not even close to seasoned veterans in the space you’re looking to enter. On the other hand, angel investors are experts in the field you want to enter, they encompass specific competencies which add value to the overall pool of angels you’re presenting in front of and they’re an unbiased 3^rd party. What you also must realize is that although angels may be hard to crack (and rip you up one side and down the other), in the end it boils down to the fact that they enjoy helping promising entrepreneurs who encompass a great vision for their industry. They were once just like you- ambitious, forward thinking, but lacking the resources they needed. They’re successful men and women who’ve been there, who now enjoy giving back to those with unique and disruptive ideas by opening up their rolodex and resources (ideas, funding, etc). 

My point in writing this continuing 4 part series is to let you, the early-stage (angel round) companies, know exactly what investors like this are expecting from you. I would estimate at least 80% of early-stage companies don’t know what an angel investor needs to become an active participant (and financier) in your company. Within 2 minutes of a CEO first opening their mouth I can tell whether they’re ready to tell me what I need to know. If so, I listen. If they bore me and don’t cater to what I’m looking for, they’ve already lost me in those first 2 minutes and I’m now thinking about the other 20 or so deals I’m on during my day jobs. Thus, the point in this series is to help you become a successful and confident presenter. 

You’ll have roughly 10 minutes to pitch your idea with a follow-on 10 minute period to answer questions. Throughout the following series of blogs I will provide specific suggestions on how to efficiently and effective organize your presentation so that your delivery is within the top 10% of all presenters. In addition, I will detail and explain some of the more common mistakes early-stage firms make. I intend for these suggestions to be enlightening but also encouraging so that you’ll soon have the tools necessary to be not only prepared, but overly prepared, and more importantly- confident.  By following my suggestions, I can estimate that you’ll be within the top 10% of all presenters. Obviously I cannot guarantee investment by angels in your venture if you follow these guidelines (because that’s all they are- guidelines). However, at the very least you’ll have increased the likelihood that many of the angels listening to your presentation will be significantly more engaged and attentive.

This is the goal: peak their interest first and foremost- be a salesperson, a darn good one who can clearly articulate every aspect of your business. If you can do that, you’re half way home to getting funding already. What I detail going forward in this series will help you with the other half.  

Networking today is flawed.

Most events are flawed.

Most events are boring.

Most events are a waste of time.

Why?

Take for example an investor panel. You have 4 investors on a panel and 40 entrepreneurs in the audience. The panel lasts 2 hours, followed by Q&A, followed by every entrepreneur going over to every investor shaking his or her hand and asking for money. The investor usually says “sounds interesting” or “no” or “ok”, no real feedback is provided in those 20 second and often times the investors feels / looks annoyed being approached.

Let me go further.

The entrepreneur doesn’t give a shit what the panel has to say. He really doesn’t. He doesn’t want to hear about how you turned a $2MM investment into $100MM. He doesn’t want to hear how you fucked up investing in pets.com. (except maybe because then he may think you’re dumb enough to invest in his bad idea)

The entrepreneur wants to find out 3 things:
1) How can i get the investors attention?
2) How can i get a meeting with the investor?
3) How can I get the investors money?

Does the panel serve any of these purposes? No.

Now let’s look at what the investor wants…
1) Network with his peers
2) occassionally meet a smart entrepreneur to invest in

What he doesn’t want it a hoard of gold diggers looking for cash.

The standard panel networking format does not help anyone. It is a waste of time - though you can still meet people and I still go to them - i just disagree with them.

A VC friend of mine always says “Always appeal to the lowest common denominator” no one cares how fancy your tech is if its too complicated for them to use it.

So what’s the solution?

Now this is a shameless plug for my own investor networking events - however I DARE you to find anyone who has gone to one of them that doesn’t love it.

Have a quick speaker or two make a simple speech on a specific topic. Limit it to 5 minutes per speaker, 1-3 speakers max. Followed by Q&A. Cut out the panel discussion no one cares about.

Then let anyone get up and give their elevator pitch to the group for FEEDBACK. PROACTIVE feedback. Let anyone there chime in with advice, questions, comments etc…max of 5 minutes per person total. Then after, if any investor is interested he can approach the person who had the idea separately after.

This way the entrepreneur gets real and quality feedback and the potential to interest investors WITHOUT pitching them directly.

This also does another thing. It allows people to build relationships. Maybe the idea is bad but because it wasn’t a straight shoot down, real advice can be given and accepted without hard feelings. Nothing kills a conversation quicker between an entrepreneur and a VC than the words “i’ll pass”.

This way the open forum serves to quality people for one another and provide real feedback and advice. it also is stress free and pitch free networking and involves no bullshit hobnobbing.

just my 2 cents…

I hate PPT’s. PPT = Powerpoint.

I hate them so much. I find them irritating.

But they are important because they show a potential investor or strategic partner that you know how to make a presentation and sell yourself. That you can break your concept down to simple very concise sections and talk through them and essentially sell the dream.

Anyone can write but not everyone can pitch. A pitch puts the meat in front of people and then leads them to the questions you want them to ask. It should lead them into the story and seeing the dream.

It should not a huge bongle of numbers and dozens of technical slides. It’s the juice, not the fruit.

If you can pitch well, then you can articulate well which means you probably have a decent idea how to promote your widget.

More importantly its interesting and short and doesn’t require a huge amount of time to read and isn’t boring text. Pictures are cool, animations are okay as long as they aren’t too complex or tacky. No one cares how long you spent on your PPT as long as it sells the dream.

All documentation should support your PPT. It’s your shock troops,you’re marines.

Here’s why? You find an investor, what do you send him first?
A brief intro email + PPT

If he’s interested you follow up with a 1 pager breaking everything down in one place

That’s followed by a short executive summary and SIMPLE set of financial projections….

That’s followed by a good beating also known as due diligence…you lead the investor into it so by the time they do their due diligence and start asking the questions that would be in your plan - you’ve already sold them on the concept

If you are pre-revenue, what are you really selling?

Potential ROI? No.
Potential Revenue? No.
Your idea? Maybe
You? YES

The single most important thing trying to raise napkin money is you. What is your background, why will you be successful. Why are you the guy to take THIS idea to the promised land. Do you have relevant domain experience or a successful exit? If the answer is no, it will be pretty dam hard to raise capital….unless…

You have a demo or IP and are willing to replace yourself as CEO….

In general the TEAM is most important
Second is the idea, as part of the idea is the size of the potential market
Third is the IP
Fourth - how you found the investor

Those 4 things together will determine if you get capital. If you don’t have good answers, you probably won’t raise a cent…

Some things to keep in mind

1) Always do research and have some numbers behind you. Even if they are full of crap, numbers help sell.

2) Lead into your pitch with a story or have a demo or an inspiring use case. A few seconds is fine but people like to hear a story.

3) Keep it under 3 minutes for the full pitch and 60 seconds for the quick pitch. If it’s too complicated odds are you won’t be able to execute it because you won’t be able to focus on the core or articulate your vision. More importantly, people get bored fast.

4) Have an exec summary and a PPT and a video. The plan itself is more of a right of passage. It probably wont’ get read. If it’s read it probably won’t matter but investors want to see that you can create one. In the end your vision sells, not your recycled paper.

5) Get professional help/advice. If you are serious about your startup call in a favor, give a point of equity or spend $1000 and get it done right. Also the people that can help probably have connections to capital as well.

6) Network. Always be positive and try making friends. If you cold pitch people and they don’t bite you’ll never talk to them again and it’ll be awkward. Make friends, be nice, talk. Casual pitch in passing if you can.Always ask for referrals if they know anyone that might be interested if they aren’t. If they say no, means they think its a bad idea probably.

7) There are 2 ways to get turned down. 1) That’s a bad idea 2) It’s a good idea but not for me. If it’s the first one, don’t push, you won’t change their mind. If its the second ask for referrals, you may just get one that leads to capital.

The team is as important as the idea. Make sure you have a team or are impressive enough to stand on your own 2 foot. If you work in a retail store, are solo and need money to build a brilliant web idea, you probably won’t get it. If you are an ex amazon marketing guy and need money to build a web idea, you might. If you have success under your belt then your odds are much higher and you probably don’t need my advice. (if this is you, why are you reading this? Go focus on your own startup, maybe you can teach me something new)

9) before you make your first pitch, do at least 10 practice pitches on people you trust. Be able to answer their questions and critique. Do not get defensive. Defensiveness is a sign of weakness and stubborness. Even if you are right! Being defensive will screw you. You need to know how to take advice and rough feedback, and learn from it - a) to better your idea b) to save you time/money if its a bad idea c) to refine your pitch itself for next time because you’ll learn the questions people ask

10) Due Diligence. There are 2 types of due diligence. One is the kind we all do all the time. We judge. We poke holes. We as a people are a negative bunch of aholes. We do it all the time. (except for the rare person). The second you pitch anything even if its not business and ask a question you will be judged. Make sure you are presentable when you pitch and look the part you are looking to fill. Second admit when you don’t have an answer but you better dam well be able to answer the following questions:
- How will the product will be built? By Who? Why are you competant to build it?
- What domain experience do you have?
- How will it be marketed?
- What are your competitive advantages? What barriers to entry can you create?
- why should i invest in you?

the second type of due diligence is basically digging. This is when they are serious about putting money in. They will research you, your team, your product and industry and make sure you are not full of shit or fleas.

For those of you who don’t know, I’m a huge met fan. If you’ve ever been to Shea, occassionally you see a guy in a crazy blue/orange mets mask. That guy is me. I picked it up for $8 in the playoffs last year and its a hoot. Of course my GF thinks its stupid and tried to throw it out but I’m a Met fan through & through. LIke always though, I know how to stand out.

So back to the topic and I will explain my baseball analogy.

1) Prepare. Get your materials together, work through them, get them down. Make sure you’re warmed up.

The Art of Pitching Edit | Delete
Guy Kawasaki wrote the Art of the Start - which is a great book btw. Here is my simpler version - the Art of Pitching…

1) Always stretch first. = be prepared and warmed up

2) Practice makes perfect. Light bullpen sessions in your spare time are a good idea. = rehearsh your pitch

3) Video tape yourself so you can see your mechanics in action. = this serves 2 purposes, one you can see if you�re persuasive and show it to pepople for feedback and secondarily you can send it around as a teaser

4) Get a coach that will critique you and make suggestions = get an adviser to help you with your plan, even if you�ve done it before, a second opinion never hurts

5) Throw = go for it

6) if you see a flaw while you’re in a game, try a different pitch and correct it later. Don’t go back to square one in the middle of a game = if you�re in the middle of pitching and someone brings up a problem, don�t get defensive, deal with it, answer and keep pitching

7) Stretch again after = recap your pitches and critique yourself and edit your pitch for the next time

Rest for 5 days and hit the mound again = rest and try again

9) Repeat

10) W = hopefully close a few bucks

Guy Kawasaki wrote the Art of the Start - which is a great book btw. Here is my simpler version - the Art of Pitching…

1) Always stretch first.

2) Practice makes perfect. Light bullpen sessions in your spare time are a good idea.

3) Video tape yourself so you can see your mechanics in action.

4) Get a coach that will critique you and make suggestions

5) Throw

6) if you see a flaw while you’re in a game, try a different pitch and correct it later. Don’t go back to square one in the middle of a game

7) Stretch again after

Rest for 5 days and hit the mound again

9) Repeat

10) W