David S Rose on TED

David S. Rose on Pitching to VCs

In this talk, David S. Rose, former serial entrepreneur and now serial investor talks about pitching to VCs. The most important aspect that the VC is interested in is you.  You have about 15 minutes to about half an hour to make your pitch.

The most important part of your pitch is your integrity. The second most important thing is passion. Then comes experience. (I have done this before). If you have failed, maybe you have learned from this. You must have domain expertise(knowledge). Then come the skills to run the organization. You must exhibit leadership. 

Commitment comes next. You must have vision but still be a realist. Finally, you must be coachable. Your pitch must include all of these without your mention of them. 

You have 10 to 30 seconds to grab their attention. The rest of your pitch must have an upward path. It must get better and better and at the end, knock them out of the park. Make sure that no threads are missing. 

Begin with the market, the how and why you are going to do it. Reference things the VC can relate to.  Show validation through something that has been done before or awards you have received.

You must then have a believable upside. There may be things that may take a VC's mind down. It is your job to recover from these. One of these is when you speak of competition. The VC may have heard of a widget similar to the one you are creating. Some things mentioned may not be true.  Even things that make the VC think could be detrimental.

Make sure the figures add up. Watch out for silly mistakes and typos. If you cannot make a good presentation, how can you run a company? 

Bullet points are OK. Headlines are better but images are best.(A picture is worth a thousand words)

Your presentation need not have introductions like 'I am presenting...' (The VC knows all this.) It must have your company logo. Then proceed with a overview of the business and give a sense of context.  Then talk about the product. Do not do a live demo. Then tell them how you make money on it. Talk about your distribution relationship or a partner.  This helps validation. 

Tell them exactly what the competition is and then tell them how you are special. Your pitch must have Financials. Speak about your growth plan for about four years. (About a 100 customers the first year...) . 

How is the money you get from a VC going to help you get there? How much are you looking at? Two or Five million? Are you invested in it? Do you have other angel investors?

The conclusion: Go back to the logo. Wrap it up by 'sending the VC into space'. 

• Use ovation or other presentation software.
  
• Always use the remote control.
  
• Your handouts are NOT the presentation. The handout must stand out without you.
  
• Never look at the screen. Connect to your audience instead
  

 

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Talks by Guy Kawasaki - Part 2

Be a Mensch

• Mensch is a Yiddish word for a person who does not look for a payoff to serve others. He does it out of altruism.
  
• Menschs treat everyone with respect.
  
• It is about integrity and doing things right and the right way.
  
• Parents teach us integrity but growing up, integrity becomes relative.
  
• In the end, you are judged by how much you made the world better.
  
• You have a moral obligation to pay back society.

Entrepreneurs, Then and now

• In the 90s Entrepreneurship was about cleverness. 
• It was about disintermediating brick and mortar.
• Today it is about technology.
• If I am clueless about your technology, it is a good sign.
• Companies of the past wanted to build a brand.
• Today it is about winning the business. (We have moved from Power Point to Excel and plain accounting)
• Financing was about grabbing an audience and figuring out how to raise money.
• Now, it is about bootstrapping. Sell your beta versions to do it.
• Back then it was MBAs with German Cars.
• Today the key employee is an engineer.
• Kawasaki's law: Every engineer is work 1/2 a million. Every MBA is worth -1/4 million.
• Getting the word out then was with advertising. Today it is about PR. Get others to say good things about you.
• It is about Evangelism, selling them a dream, to make the world a better place.
•  Apple is doing well because of its  evangelists.
• The scope at that time for a company was global. It is about acting local. It is about getting sales in your local area.
• Business development was about alliances back then. Noone had a decent business models. 
• Today it is about revenue. 
• Raison the etre of the company was about liquidity.
• Today it is about passion. 
• The big picture then was about buiding something big. This is the same. Do something 10 times better not 10% better. It is better to fail at something grand than to fail at something marginal.

The 10-20-30 rule of presentation

• 10 slides
• 20 minutes: A windows laptop will take 40 mts to work with a projector.
• Your smallest font should be 30. This would mean less text and it forces you to know your material.

Funding Choices

• It is hard to raise money. You may never do it.
• Bootstrapping must be in the DNA of a company.
• It is worse to have too much money than too little money.
• Yahoo and Google did it with no money, either with a good business model or by evangelism.
• If you do get VC money. take it but do not spend it.

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Talks by Guy Kawasaki Part 1

If one were to name one of the most prolific opinion shapers on the web today, Guy Kawasaki would figure in most lists. Whether one reads his books or his blogs, watches his talks on You Tube or simply follows his twits, there is much to gain from his advice. 

In this post, I have collated some of his best talks from You tube. They offer nuggets (or as Guy himself would prefer, diamonds,) of wisdom to any aspiring entrepreneur.

The Art of the Start

In this talk, he says that one who starts a business must do so to start meaning, not money. The offers three ways to do so: Change people's lives, 'right' a wrong, or prevent the end of something good.

Who to hire

Hire infected people, proclaims Kawasaki. Choose passion over credentials and work experience.  This is counter intiutive and is at odds with the advice of most VCs. It is the lack of experience which can sometimes cause one to be most effective in a startup environment. Kawasaki is himself living proof of this theory.He offers the following advice

-Ignore the irrevelvant

-Hire those better than you.

-A startup is a disfunctional family.

Ideas - what make them successful

What separates a successful idea from an unsuccessful one?Here again the answer is very offbeat. Kawasaki says it is luck and Karma. If you stick to your ethics and mean well, you will have good Karma.

Do what you love and the money will follow

While Kawasaki invests only in high tech, there are enough low technologies that are not so hot but make the world a better place. If you do something you love, you may have a better chance at happiness. Kawasaki himself gave up law school as Kawasaki found that it was trying to reengineer his mind.

How do you find soul mates

We tend to look at people like us and sometimes promote people we like, even when they may not be qualified enough. A soulmate is usually a person in your social circle. If your soulmate is not performing at the expected level, you need to understand that your responsibility is to your company, not the individual.

Experience is overrated

For tech entrepreneur, the sweat spot is a 20 year old from a great engineering school. At 50 you realise that it is harder. The younger you are, you do not realise how hard it is. Ignorance is empowering.

Should you get an MBA

MBAs do not teach you how to manage. This can only come with experience. Quantitative schools cannot teach you even as much as you can learn from a small business. Statistical models and theory are not as useful as knowing that if something costs $1 to make, brings a return of $5 and will give you a return of 20%. Kawasaki does regret not having a technical degree for not being able to hold fort against engineers when it comes to deliverables. 

How to be a VC or Enrepreneur

Join either a big multinational like PG or a startup. Investment Banking is a bad choice as it gives you a false sense of knwoing it all. When you get bludgeoned by rejection, or work in a startup that failed, could teach you  your best lessons. Aim higher.

The business model

- Be specific on your target customer, the enterprise customer, the vertical.

-Unique business models are frightening. Product and serviceIt cous can be innovative.  Business models cannot be.

-Women are better that men when it comes to a business model. men have a killer gene to create companies to kill other companies.

The importance of a good presentation

- Most speakers 'suck'.

-Use a top ten format

Weave a mat and outline your priority

-A startup has no install base, underperformers, lousy furniture,etc. It is a pure virgin startup.

-You can work on cool things like logos,etc.

-Create milestones : This is the first priority. It could be a shipment, 

-Write down your assumptions: How many sales calls? How many successful sales calls? What does customer service cost?

-Then there are tasks: This can be rent an office.

Lower the barriers of Adoption

- You may have a great mouse trap, but the learning curve is high. This may force your customer to go elsewhere.

Education: The importance of Peers

In college, it is the students you meet. Pick the geekiest, pin headed person and they can be a real successful person. Hang out with Indians and the Asians. 

Product Development: Listen to your Customers

Many customers put it to uses you did not intend. Do not freak out. It is a good thing. Take money.

It leads to an engineering algorithm: Go to the customer and ask them why they are buying it.

or go to those who are buying and look for more reasons why people are buying  a product.

'Seed the clouds and watch sales grow'

This is about watching sales grow. When 100 flowers blossom.

Enable people to test drive.

Suck down: Suck up to those who are not the CXO people. Find the tech supports, the administrative people and sell to them. Suck down and suck across, don't just suck up.

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Lecture Notes: Alternate Financial Strategies

Speaker: Daniel Ross, PDD Class

In the land of Lemins, how do you find a leader?

How do you build a syndicate?

With less than/more than 10M

Angel Investors -Usually less tha 10M

VCs -Usually greater than 10M

Fundraising 2-6 Months

Getting VC Attention

* Introduction by a trusted firm or friend.

* Sexy Technology

* Your Business plan is a marketing tool.-Get an expert to write it

* Understand the comfort zone of different firms.

* Early/late stage investors?

* What verticals do they focus on?

* Can they leverage their strategies?

* Ask yourself: How long can I wait to get more ownership?

* Hot fields: Biotech, security, storage.

* What does the leader need from you?

o Credibility of CEO

+ Track record

+ Topical experience

+ Ability to attract a strong team.

o Strengths of the VP

+ Sales, marketing, business development

o Advisory Board

+ Brand names

+ luminaries

+ connections

o Huge market potential

o Does product work?

+ in production?

+ Betas?

o IP applications filed?

o Anyone eating your dogfood?

+ Customers?

+ traction?

* Always use other people's money.

* Avoid using yours. You commit enough by committing time and effort.

* What are VC's exit strategies?

SBIR to Government Contacts fund $500,000 to bring an idea to commercially not necessarily to market.

Beltway Bandits:

- You are competing with people not in your market

- Don't go to just one partner or VC. You are better off with more

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