Being EIC of AlleyWatch, and taking the pulse of the industry in general and startups in particular, here are what we hope are some general takeaways that might help you in future on some decisions you might have to make, or with moves you plan on making:
- A considerable number of the successful entrepreneurs have been through accelerators. (Drew Houston/Dropbox, for one.) If you decide to go through one of those programs, and once you’ve finished, don’t disappear. Stay in touch – with the Managing Directors and the others who’ve gone through the program, and not just the companies in your class. If you need help, introductions, etc – ask. Remember: you’re one of their investments. They have a vested interest in seeing you do well. You have a valuable resource at your disposal – use it. Wisely. Ditto on fellow alums.
- Companies who’ve gotten the biggest funding rounds (in New York, so far) have not necessarily gone through accelerators, and the founders who tend to get the largest funding rounds are often – not always – successful serial entrepreneurs, not 20 somethings. Or even 30 somethings. There are exceptions, of course (DigitalOcean/Techstars, $37M). On the other hand, investors will be more likely to meet with you if you’ve been through an accelerator: you’ve been pre-vetted.
- Investors tend to put larger amounts into FinTech and companies focused on B2B. Just FYI.
- On speaking with investors, many have shared with us that they are more likely to consider early stage companies if/when they’ve been referred by someone in a company that’s already part of their portfolio – that’s a heads up: find an investor who focuses on your space, look at their portfolio companies, find someone from one of those companies to take to coffee/lunch – go through your own contacts for the introduction. Make sure your own contact likes you and what your company is doing. It helps.
- Make sure your company is listed on Angelist and/or Crunchbase. Investors do check to see if you’re there. They can then also easily refer a potential co-investor there to take a gander at your thumbnail. And are more likely to take you seriously, the more professional you are. Or seem.
- Press is a great way to help your mom or grandmother understand what it is that you do. It helps if it’s good press, but chances are, they may not understand all of the intricacies of what you’re doing anyway, so show them the piece anyway. In the case of your grandmother, you may have to print out the article. We’ve been told that it seems to have more of an impact.
- HIRE A PROFESSIONAL WRITER. For your website, for your ‘printed’/sharable material, whatever. Hiring one on a consulting basis is fine. As Editor in Chief of AlleyWatch – and we cover companies launches all the time – we often personally can’t figure out precisely what many companies are about, based on their websites, written material, or even their press releases. If we can’t understand it, we can’t make a readership understand it, either. Want to know why you’re not getting press from other outlet? They’re busy and if you’re not making yourself understood, they’ll just go and cover something else. Hire a writer – someone who can make your story/pitch understandable to people other than your cofounder and your best friend, who has been hearing it, ad nauseam, since the day you first got the idea, and can recite it chapter and verse, and who pretty much tunes out when you read your latest (unintelligible to most of the population on the planet) iteration. Do not hire an intern for this job – most often interns don’t know the industry. Investors are reading your materials, too. You want an intern – the person on your team with the least amount of experience – to make your first impression? Bad idea.
- Industry networking events are important, but one of your criteria for attending should not be whether or not there is free booze, unless you’re just going for the free booze. Make sure it’s a quality event. Those events where you meet 40 investors in 40 minutes? Those investors are meeting 200 other people, too. Think you’ve gotten their attention? Or that there’s a snowball’s chance in hell that they’ll remember you? Go to events where you stand a chance of having meaningful conversations with people. You may just meet some of your future employees, too, you know.
- If you’re looking for press, do your research. Different reporters tend to focus on different areas/specialties – enterprise, gaming, whatever, and there are generalists as well. Focus on those reporters who are most likely interested in your vertical or story. If you’re doing something that’s in their sweet spot, go for it. If they’ve just published an article about something your company might have been a good fit for – tough sell. The story is already published. The reporter has no doubt moved on to the next story.
- Many investors have blogs. Read them. Good for insights into what they’re thinking/possibly looking at, in terms of where they might focus next, when it comes to investing. Also a good insight into whether or not you agree with that investor, and whether or not you’d feel comfortable working with that person.
Bonus: this piece of advice from someone at the New York Tech Meetup.
There are a lot of conflicting opinions and advice out there about what basics you need to how to get funded (one pager? 10-slide deck?), what you need to approach investors, how to get traction – the list goes on. The truth is: there are no hard and fast rules. They vary, depending on the vertical and the investor, where you happen to be launching your company (the rules in NYC are not the same as the rules in, say, France, where markets are different, there are fewer investors, and the investors are generally more risk averse) – again, the list goes on. And you know what they say: opinions are like…noses. Everyone’s got one. Follow yours.
Image credit: CC by Vancouver Film School