Download - AngelPad Session BB 10.6.11
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How to build a traction narrative, pimp your AngelList profile, hustle on AngelList, and understand that fundraising is #&@* hard.
@brendanbaker
AngelPad – October 6, 2011
Brendan Baker
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Not a founder (yet)
Shiny Ego Stuff
Brendan Baker
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Pimping Your AngelList Profile2
Brendan Baker
Building a Traction Story1
Hustling with AngelList3Fundraising is $%*@ hard4
Our options
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Building a Traction Story
Brendan Baker
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How do investors think?
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Brendan Baker
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Momentum.
Brendan Baker
Green is good.
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Excitement > Hesitation
Brendan Baker
Amplify and focus on the excitement points.
Surface and deal with the hesitation points.
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Derisking.
Brendan Baker
Risk
Progress
Can they build the product?
Will people use it?
Will people pay for it?
Will people come in mass?
Derisking often happens in steps.
These steps may vary for different startups.
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Investors respond to a story.
Storyboard. Make the pieces fit together.
A story here means the takeaway message you want them to have, not something you’ll say directly.
Brendan Baker
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What is traction?2
Brendan Baker
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Traction is your story of momentum, told through
quantified evidence of market demand for your
product.
Brendan Baker
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“your story”
Brendan Baker
Not told directly, but implied in examples of evidence.
Your traction is unique – use examples that are unique.
Don’t hide weaknesses, but frame them.
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“quantified evidence”
Brendan Baker
Profits
Revenues
Active users
Engagement
Customers/clients
Registered Users
Downloads
Partnerships
Traffic
Yes MaybeCohort progress
Engagement progressProduct velocity
NoPress
Testimonials
* This isn’t a set list. Use evidence that makes sense for you.
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“Market demand”
Brendan Baker
Dynamic > static.
Use evidence that describes momentum, and hints at market potential.
Graphs or growth numbers can work.
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So the traction story should show the path
from product to market.
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Brendan Baker
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Some examples
Brendan Baker
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Remember:
Brendan Baker
The story is the implied message you want to send. It’s not something you’ll say directly.
Think of it this way: say you pitched an Associate at a VC firm. She liked you, and had a minute to describe your status and progress to a Partner. What would you want her to say?
That’s your target story. Tell it with traction.
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Brendan Baker
“They’re super early, but they build and learn fast. They’re worth betting on.”
story
traction
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Brendan Baker
“They’re creating a marketplace. That’s hard, but they know it. They knew they had to build the supply side first, and they
nailed it. Now they’re tackling the demand side. Early indications are good, and I think they know how to ramp it up.”
Launched in March 2011:- 25,000 vendors, with avg 25 items (growing 20-30%/month)- 11K uniques (growing 40%/month), with 3% conversion - avg purchase of $45 (growing 5%/month)- $120,000 revenue run rate (increasing 30%/month)- Just signed partnership with Yahoo! And ramping up ads.
story
traction
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Brendan Baker
“They’re accelerating their school by school rollout. The first schools are showing faster adoption than Facebook at their start, and are already
nearing local market saturation. They’ve started in the next set of schools, and adoption and engagement is even higher. They’re releasing faster than anyone I’ve ever seen, and it’s working.”
Launched 2 months ago in first school:- Downloaded by 80% of addressable population- Weekly actives: 55%- Feature requests: course sets, note sharing, daily deals V2
With V2, now ramping to 10 more schools in 3 months:- 3 launched to date- Each school population is downloading the app at a 15% faster rate- Engagement (photos shared, messages, etc) has increased 40%+ over V1
Currently building V3 with virality features, and planning to build street teams to reach the next 25 schools.
story
traction
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Pimping your AngelList Profile.
Brendan Baker
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Your job is to capture their attention.
Don’t tell your life story. Focus on memorable highlights.
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Brendan Baker
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You’re in a market for early stage funding.
Be unique.
Don’t take is personally.
Nobody cares about your problems.
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Brendan Baker
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The best info, as concisely as possible.
Be focused.
Second draft = first draft – 25%.
Third draft = second draft – 25%.
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Brendan Baker
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80/20: 80% what you’ve done, 20% where you’re going.
Investors will extrapolate your past success to predict your future progress. This is different in other pitching contexts.
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Brendan Baker
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Evidence trumps potential.
Every time you call yourself a ‘visionary,’ a puppy dies. You’re not a gamechanger, seasoned professional, innovative, next
generation, or any other overused catchphrase.
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Brendan Baker
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Conviction convinces.
Use present tense and strong wording.
Avoid weak shit like ‘we’re planning to…’
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Brendan Baker
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Associate yourself with success.
Capture the gold dust from your investors, past employers or startups, customers, etc.
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ASM: Always Show Momentum.
Venture investors invest in momentum.
Set expectations: ‘we’re still in private beta but…’
Use absolute and growth numbers.
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Brendan Baker
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Geeks rule.
AngelList is a technical community. Broadcast your geeks.
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Brendan Baker
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Give them something to touch right away.
Provide a demo with login details or failing that, screenshots. Don’t rely on a 2 minute demo video. Busy investors won’t
watch it.
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Brendan Baker
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How to Hustle on AngelList
Brendan Baker
Quick discussion around the ‘How to Hustle with AngelList in 12 Steps’ Quora post.
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Fundraising is $#@* Hard.
Brendan Baker
Quick discussion around Anatomy of Seed project.
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Resources
How to Communicate Traction to Investors
How to Hustle with AngelList in 10 Steps
Anatomy of Seed: An Inside Look at a $1M Seed Round
Brendan Baker
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Thank you.
Thank you for building kick-ass companies.
@brendanbaker
Brendan Baker