how to hack your startup's seed round

How to hack your seed round

Alan Jones

@bigyahu

alan@bluechilli.com

Wait, what?

“Hack” = insider ways of

achieving your goal not yet widely

distributed

• Macworld magazine

• OnAustralia (ninemsn)

• Yahoo! Inc.

• HomeScreen Entertainment

• Bluepulse

• Pollenizer

• Startmate

• Blackbird VC

• BlueChilli

• Bugherd, Chromasun,

OtherLevels, Scriptrock,

Bugcrowd, That Startup Show,

Tzukuri

What do I know?

• HomeScreen Entertainment

• Bugherd

• Chromasun

• OtherLevels

• Scriptrock

• Bugcrowd

• That Startup Show

• Tzukuri

My seed round investments

BLUECHILLI PORTFOLIO SEED

ROUNDS

WhenTypically how much in AU, today

From whom

Your cash Day zero Limitless (you can always earn more)

Well, duh

Friends and family Unvalidated idea $10-50k People who know you well and trust you

Seed round Validated prototype or MVP

$100-750k Experienced individual investors

Series A Scale acquisition, improve product, hire team

$750-$3M VCs, Private equity, business partners, seed round angels

What is a seed round?

• Do you have a brand, landing page and Google

AdWords account?

• Can you demonstrate a basic prototype or

minimum viable product?

• Do you have co-founders?

• Do you know your search volume and cost per

online acquisition?

• Do you know your addressable market

When am I ready to raise a seed round?

The seed investor funnel

Positioning

Acquisition

Conversion

Engagement

FINDING GOOD SEED

INVESTORS

Step one:

• Brings relevant experience

• Up-to-date experience

• Comfortable with uncertainty

• Doesn’t need care and maintenance

• Helps you raise Series A round

What makes a good seed investor?

• Media: StartupSmart, SmartCompany, Business

Insider, Slattery’s Watch

• angel.co

• linkedin.com

• Startup incubators and accelerators

• University entrepreneurship programs

• Startup industry events

Where do I look for seed investors?

• They attract seed investors looking for new talent

• Run by seed investors

• Guide you to prepare for seed

• Motivate you to get there

• Accelerators are an endorsement to investors

Apply for an incubator/accelerator

• Keep applying: persistence counts

• Follow them online

• Attend their events

• Buy alumni a coffee

• Try to buy their mentors a coffee

What if I can’t get in an

incubator/accelerator?

• Buy a premium account so you can approach

people directly

• Look for non-employees connected to relevant

startups (ex-employees make seed investors)

• Don’t ask to connect just to be connected, send

InMail instead

• Don’t do anything until your profile is complete

• Play it straight

How do I use LinkedIn?

• Don’t do anything until your startup’s profile

page is complete

• Look for investors in relevant startups and

follow them, then approach them a week or

so later

• Look for the followers of relevant startups

as a secondary target

• Find investors in relevant funds

How do I use angel.co?

• CRM e.g. Capsule, Podio, Google Docs

• Email marketing e.g. Mailchimp

• Buffer for social media

• Blog your journey with WordPress or Tumblr

Use easy, cheap tools to manage

relationships

• Time-poor and secretly like to be

• Too many approaches, not

enough good opportunities

• Summarise, summarise

• More of us follow than lead

• We’re action-oriented

• We have short memories

TL; DRHi Alan,

We are [Brand Name] and we are Uber for

Shopping Trolleys.

You invested in [Related Startup] and we want you

to join our $200k seed round as an investor.

We have interest from people you know including

Bardia Housman, Simon Hackett, Jindou Lee and

anticipate closing by end April. Bardia said to speak

to you.

First step is to check out our AngelList profile at

[URL] and Follow us there to get further updates.

I’ll contact you again in 2 weeks to ask if we can

meet to answer your questions.

Full contact details

SEED ROUND HACKSFrom Startmate and BlueChilli founders

• Network; for the purpose of learning, making

friends, and building influence

• Investors talk to each other a lot. Buy people

coffee. If you're shy, learn not to be as shy.

Network your arse off

• Talk to founders who have just raised a seed

round (last 12 months) and ask them for coffee

• Go for intro but cold email works incredibly well as

they want to help you

• Ask what they did that worked

• Ask who’s a joker and who’s good

• If it goes well, ask for 1-3 intros

Other founders are your best friends

• Raise privately one on one first, before you pitch

to a large group. This way you polish your pitch

and can learn to answer the FAQs.

Don’t enter pitch competitions on day one

• Lock in that lead investor to help herd the group,

otherwise it will take much longer.

Don’t enter pitch competitions on day one

• Don’t open the round until you have some

commitment. When you open and “your round is

30% full” sounds way better than “we have spoken

to 25 angels and they are all still thinking”

Don’t enter pitch competitions on day one

• Have the terms ready and negotiate from there.

• Use StartMate term template to save legal cost.

Don’t negotiate from a blank sheet

• Get a sense for the size, frequency and total

portfolio

• Understand whether they’re fully allocated

Where are they at in the cycle?

• Ask their permission to add them to your

Mailchimp database

• Ask who else they can introduce you to

How do you wrap up?

• We aren’t investing for rational reasons

• Show us how we can help and we will

• More of us follow than lead. Find the leaders

• TL;DR

Remember