start up advice - short version

Start-Up Advice – Short VersionARIEL POLER @ariel

Ariel’s Background Founder: IPRO, Topica, Textmarks & Best of Angel.

Board Member: Kana, LinkExchange, Freedom Financial, Odeo, StumbleUpon, LOLapps, Scan, Strava.

Investor: AdMob, Flixster, Slideshare, Xobni, RockYou, Outright, BrightRoll, Instructables, Causes, VivaReal, Optimizely, Rally, Thumbtack, Viki, Pantheon, ApartmentList, Mashery, StumbleUpon, Kongregate and NexTag.

Personal: MIT (math), Stanford (mba), San Francisco (home).

Fundraising

Tips for PitchingWho you pitch to is the most important thing

Don’t confuse product pitches (or sales pitches) with company pitches

Key points often overlookedCustomer acquisition strategyUnit economicsTake a look at bestofangel.com

It is not about checking boxes. It is about getting the investor excited

"You are too early” and other excuses

Most investors do deals when they get excited. But they don't like to say “I am not excited", so instead they use an easy excuses, such as:

- You are too early- The deal is too small- I want to see more customers/revenues/technology

Be careful about trying to solve address their excuses, because once you do they are likely to find others. Instead, figure out how to get them excited.

Investors like to keep their options open.

It is not a Black and White distinction between Angels, VCs, Private Equity

There are many shades of Grey...-Full time professional angels.-Angels with funds.-VCs that focus on seed investments.-VCs that participate in seed rounds.-VCs with Private Equity growth funds

What matters most is the individual, not the firm!Do your homework to identify the best possible people.

BTW, “Signaling” risks are exaggerated

International Companies have better chances of fundraising elsewhere

• Silicon Valley is the only region with too many good deals. Investors elsewhere HAVE TO invest outside their region, but we don't. So the bar is much higher...

• So non Silicon Valley companies might be better of fundraising in places such as London, New York or Boston.

• Of course, a few Silicon Valley investors do invest abroad, but the bar is higher and the choices scarce

Series Seed vs Convertible Note vs SAFE?

• Who cares???• Whatever works best for the investors• If a note, make sure it has a cap (and one

everybody likes)

Beyond Fundraising

You can’t follow all the advise that you get –

including mineThere are many ways of building companies

You must find the approach that works for you

Advise should help you gain insights and to experiment

It is the same for competitive athletes…

Speed is overrated!

What good is going fast in the wrong direction?

The better you understand where you need to go, the faster you can move

But, never stand still!

If you have money you will spend it… Get it when you know how to use it

Risk is your friendMake big bold bets. All of the most successful

entrepreneurs do!

Use time to diversify: focusing on one thing at a time

But it is OK to experiment with different things for a while until you decide what you want to focus on. But just for a while…

Don’t believe what you ReadMost success stories are made with 20/20

revisionist hindsight

It often takes time, e.g. StumbleUpon and Twitter were not overnight successes as some people think…

20/20 Hindsight gives great strategic vision. Realistically, successes are built incrementally.So, don’t obsess over your world domination vision.

Just make sure you have a vision for a small success – from which you will be able to build a larger one. To use a baseball analogy, start by getting to 1st base.

Help me Help YouDo your homework

The right people to talk toThe topics you want to discuss

Be Specific

Add value