What Movies Can Teach You about Pitching to Investors

Pitching is hard, and pitching in different contexts is even harder. I frequently see people struggle to shift from elevator pitches (30 seconds) to demo day pitches (5 minutes) to full pitches (30+ minutes). The problem is most acute for founders who really understand their businesses; they have tons of compelling points and metrics at their disposal, which makes it hard to decide what to include and what to exclude in short presentations vs. long ones. I think a great way to think about different types of pitches is to look at what the movie industry does in various contexts:
  • Movie posters are like elevator pitches. They're designed for an audience that only has 20 seconds of time to spare.
  • Movie trailers are like demo day pitches. A trailer shows enough highlights and explains enough context to get people excited about watching a movie, but it doesn't spoil the entire
    Total Recall
    Expendables
    Separation
    Continue reading "What Movies Can Teach You about Pitching to Investors"

What Movies Can Teach You about Pitching to Investors

Pitching is hard, and pitching in different contexts is even harder. I frequently see people struggle to shift from elevator pitches (30 seconds) to demo day pitches (5 minutes) to full pitches (30+ minutes). The problem is most acute for founders who really understand their businesses; they have tons of compelling points and metrics at their disposal, which makes it hard to decide what to include and what to exclude in short presentations vs. long ones.

I think a great way to think about different types of pitches is to look at what the movie industry does in various contexts:

  • Movie posters are like elevator pitches. They're designed for an audience that only has 20 seconds of time to spare.
  • Movie trailers are like demo day pitches. A trailer shows enough highlights and explains enough context to get people excited about watching a movie, but it doesn't spoil the entire plot.
  • Behind-the-scenes featurettes are like full pitches. They are meant for people who are very interested in a movie and want to know everything about it. 

Each of these products appeals to different audiences, and that's reflected in the content and the design. For example, because posters are for passersby with short attention spans, they're unlikely to include paragraphs of text or shots from many different scenes. A poster is typically just a photo of the best known-actor(s) in the movie, a one sentence tagline, a background that provides a hint about the plot, and maybe quote from a famous critic. For example, here's the poster for Total Recall:

Total Recall

What does this poster tell you? The movie features Arnold, the tagline implies that it's an action film, and the pyramid with two planets next to it suggests that the genre is probably sci-fi. That's it. There's no mention of Mars or mutants or erased memories or Philip K. Dick or anything else. Whoever designed this poster understood the audience (teenage boys) very well.

There's no single formula for what a poster should show, only that it should show the most exciting things about your movie as quickly as possible. You absolutely do not have time for anything else. For example, a poster for The Expendables only highlights the action stars in its cast. It doesn't bother with a tagline or quotes from critics because those don't really matter compared to having Sly Stallone, Bruce Willis, and Jason Statham in the same movie. 

Expendables

On the other hand, A Separation is a foreign film whose actors are not well known in the US, so its poster wisely focuses on awards and praise from critics. 

Separation

The Elevator Pitch

Your startup's elevator pitch should mimic the brevity and information density of Continue reading "What Movies Can Teach You about Pitching to Investors"

WhatsApp sails past SMS, but where does messaging go next?

Noted this week: WhatsApp reported that it now has 700m MAUs sending 30bn messages a day. For comparison, the global SMS system sees about 20bn messages a day. 

Screen Shot 2015-01-11 at 3.18.43 pm.png

Meanwhile these charts of global SMS use from Ofcom show the other side of the story: arbitrage and substitution.

As I discussed when Facebook bought WhatsApp last year, the smartphone itself is a social platform. The winner-takes-all dynamics of social on the desktop web do not appear to apply on mobile, and if there are winner-takes-all dynamics for mobile social it's not yet clear what they are. There are four main aspects to this: 

  • Smartphone apps can access your address book, bypassing the need to rebuild your social graph on a new service
  • They can access your photo library, where uploading photos to different websites is a pain
  • They can use push notifications instead of relying on emails and on people bothering to check multiple websites
  • Crucially, they all get an icon on the home screen. 

Any smartphone app is just two taps away - a desktop site can crush a new competitor by adding it as a feature with a new menubar icon but on mobile there isn't room to do that: mobile tends to favor single-purpose, specialized apps. These factors led to an explosion of social messaging apps in the past few years. 

It seems to me that there are two interesting questions now: how much these will settle down, and how much they will become more than just messaging. But actually, those are two sides of the same question. 

First, settling down. It does seem as though WhatsApp is far ahead outside the USA and east and south-east Asia. In the USA there's Facebook Messenger, Kik, Snapchat and arguably Instagram still fighting it out, in East Asia Line and WeChat and maybe others are contenders (and WeChat is very far ahead in China), and Facebook Messenger is a global presence too. It's all pretty unclear how much and where, exactly, and the numbers are very fuzzy - some give almost-meaningless 'registered' users and some give MAUs, and MAU is also not terribly meaningful - 'Hourly Active Users' might be better. Meanwhile Apple's iMessage is dark matter - it's probably big, with over 400m iPhones in use today, but we don't know how big.

But talking about winners per se also seems like it may be the wrong conversation - people use several of these at once for different purposes. WhatsApp may win 'text chat' but that's not quite what Instagram is about. After all, your smartphone comes with three social networks out of the box, voice, SMS and email, and you use them all. Are you really going to add only one more? So something else may displace WhatsApp Continue reading "WhatsApp sails past SMS, but where does messaging go next?"

The Sales Motions of B2C2B Companies

After writing about B2C2B companies last week, I received a lot of great comments about the differences between the B2C2B models, particularly the sales models after a company has acquired the initial Consumers. These are three sales models I’ve observed B2C2B companies use to convert the initial momentum with consumers into dollars. The first sales model is the 2 Phase Sell. LinkedIn and Duolingo employ this. LinkedIn attracts large number of consumers with a place to find jobs and post resumes.

The West is not at War with Islam

NYC had 911, London the July 7th tube attack, Madrid the Atocha train bombs that left over 200 dead and 1000 injured, Boston the marathon bombers, and now Paris had the Charlie Hebdo-Jewish supermarket massacre. All horrible attaks. But each time these bombings and shootings take place commentators argue that this is the beginning of a war between Islam and the West. Over years they have predicted many more innocent victims dying in the hands of Islamist extremists. But much to their surprise, in each of these cases, the murderers were uniquely sick individuals not representative of the 1.5 billion other Muslims and more attacks did not materialize in each city.

 

The lack of other attacks has shown that the vast majority of Muslims who live in Europe and USA are not willing to join the ranks of the murderers and are as disgusted as non Muslims. They feel towards extremists as we feel towards the Norwegian attacker or the Newtown killer. Does the Muslim religion currently produce more people willing to kill in the name of Islam? I think this is undeniable. But to be fair the West produces a lot of people who are willing to unfairly kill and torture in the name of “freedom” in places as Iraq, Afghanistan and Guantanamo. And if we simply count victims, Muslim victims outnumber non Muslim victims at over 100 to 1. The victims of Islamic terrorism in the Muslim world, are mostly other Muslims.

Follow Martin Varsavsky on Twitter: twitter.com/martinvars

Guy Kawasaki of Apple Inc, Motorola and Alltop.com

 

Screen Shot 2015-01-06 at 12.10.18What is the most important thing for a startup to have? Join us as Guy shares his investment strategy and provides inside access into the mind of a top VC.

Guy Kawasaki is the founding partner of Garage Technology Ventures, a seed & early stage venture capital fund investing in extraordinary entrepreneurs with unique technologies. Previously, he was Chief Evangelist of Apple Inc and an advisor to the Motorala Business Unit of Google. Guy is also the author of many best selling books including the recent best seller, The Art of Social Media: Power Tips for Power Users.

Items Mentioned in This Podcast

The Art of Social Media: Power Tips for Power Users

If You Want To Write: Barbara Ueland

Influence: The Psychology of Persuasion: Robert Cialdini

In this session you’ll learn:

The 3 Types of "Platform" Companies

People use the word "platform" to describe products with fundamentally different characteristics.  OSs (e.g. Android), infrastructure products (e.g Twilio), and platforms (Facebook APIs e.g. Connect) may all be called "platform".  However, the distribution approaches and product strategy for each differs. Conflating what makes a platform work versus e.g. an infrastructure product can backfire and cause a team to have the wrong strategy for building a product or getting customers.  These startups tend to fail.

Below I attempt to define and differentiate between these different types of companies and their products.

1. Infrastructure.
Infrastructure products are ones that multiple companies have to build over and over again.  Eventually some smart entrepreneur realizes this and builds the common infrastructure product that other companies will pay to use.  An example of this is the founders of Mailgun, who built versions of the same email server for multiple employers until they realized they could build this as a general service for all developers.

Infrastructure products are often necessary for a product to function (every ecommerce site needs Stripe for payments) but are not often a "strategic" differentiating buy for their customer (although Stripe has managed to differentiate strategically based on its fast iteration on new features and its simplicity as a product).  Early on, many users of Twilio didn't care if they were using Twilio or another telephony provider - they just want it to work quickly, simply, at a good price (which ultimately meant using Twilio due to its ease of use).

The best infrastructure companies have clear economies of scale or network effects.  Twilio is probably able to negotiate better and better deals with carriers on pricing the more volume it aggregates from its customers.  Similarly, large amounts of payment data can provide scale effects for fraud or risk management.

An infrastructure company's success often boils down to a handful of factors:
-Ease of use and integration.
-Cost.
-Up time.
-Differentiated features or historical customer data.  This helps you lock in your customer base.
-Economies of scale.  This can lead to network effects on costs (pricing power of the infrastructure provider relative to its own suppliers) or features (fraud detection).
-Developers or sales channel.  In some cases a developer ecosystem emerges around an infrastructure product (note: this is different from developers using or adopting a product).  This is less common for infrastructure then people think, and is more common for a true "platform" (see below).

In rare cases, an infrastructure company can move up to become a "platform" in its own right.  This only works if the infrastructure company is able to collect and re-position unique end user data, or build direct brand recognition with its customer's customers. Continue reading "The 3 Types of "Platform" Companies"

The 3 Types of "Platform" Companies

People use the word "platform" to describe products with fundamentally different characteristics.  OSs (e.g. Android), infrastructure products (e.g Twilio), and platforms (Facebook APIs e.g. Connect) may all be called "platform".  However, the distribution approaches and product strategy for each differs. Conflating what makes a platform work versus e.g. an infrastructure product can backfire and cause a team to have the wrong strategy for building a product or getting customers.  These startups tend to fail.

Below I attempt to define and differentiate between these different types of companies and their products.

1. Infrastructure.
Infrastructure products are ones that multiple companies have to build over and over again.  Eventually some smart entrepreneur realizes this and builds the common infrastructure product that other companies will pay to use.  An example of this is the founders of Mailgun, who built versions of the same email server for multiple Continue reading "The 3 Types of "Platform" Companies"

My First Six Months as a VC: Challenges and Surprises

As expected, my first six months in venture has been filled with challenges and surprises, all of which I believe will make me a better investor in the long run. Below, I detail a couple challenges (one completed, one ongoing) and a couple things that have surprised me so far.

A little over two months ago, my friend Kanyi at Collaborative Fund Tweeted the following:

A uniquely important VC experience: to fight for an investment, especially when you have to push through internally *and* sell the founder.

This comment struck a chord with me, as I had just gone through this type of experience, particularly when it came to convincing a founder to work with us rather than another firm. It was the first time we had direct competition for an investment that I had sourced. It was stressful, exhilarating, temporarily disheartening, and finally emboldening when we were selected to Continue reading "My First Six Months as a VC: Challenges and Surprises"

Things I Expect To Hear At #JPM15

Are you ready for the circus?  Next week’s JPM Healthcare Conference is getting ready to kickoff, and much of the healthcare industry is feverishly preparing their materials for the mayhem.

Given the biopharma industry pipeline’s exciting clinical progress, a record-breaking year of FDA approvals, a buoyant stock market, and 2014’s chart-topping biotech IPO volume – it’s bound to be a positive and optimistic kickoff to year.

Last year on a whim I attempted to kick things off with some humor, and shared the “Top 10 Little White Lies” told annually at JPM.  Much of that list still rings true this year.

Reflecting on this year’s climate though, and taking a page from last year’s playbook, I thought I’d share a list of the things I expect to hear at JPM walking around the halls, at the cocktail parties, and in our meetings…

  • “I’ve always thought autologous engineered cell therapy was a good investment”.  Likely heard from glowing buyside investors sitting around $JUNO and $KITE talks on CAR-Ts.
  •  “We’ve established definitive clinical proof of concept in You’ve-Never-Heard-Of-This-Orphan-Disease” and are heading towards registration trials.  With 7000 orphan diseases, this statement just may be true no matter how many times you hear it.
  • “Their beta-amyloid approach is different than everyone else’s.”  Spoken by excited neuroscience analysts explaining their bullishness on the latest Alzheimer’s program, exhibiting symptoms of suffering from hope over experience.
  • “If only we could have done that tax inversion deal…”  Maybe we won’t hear this one, but I’m sure there are a lot of CFOs and buyside investors daydreaming about it
  • “We’re going to be the Agios-of-X…”. Conveyed during private biotech pitches as a “comparable” future trajectory, like the Uber-of-X theme in tech.  Maybe true, maybe not – but $AGIO is a pretty special 1-in-500 type of company.
  • “We are expanding our R&D in Boston in 2015…”  Spoken by Pharma executives as evidence of their R&D commitment, amidst further site closures and layoffs elsewhere. In time, even Boston’s Watertown suburbs may actually become cool places to innovate.
  • “Can you believe they raised $450M?”  Likely said with mix of amazement, respect, and a large dollop of envy.
  • “We’ve been long on gene therapy for years…”  Really? It’s worth congratulating and thanking $BLUE and others for bringing gene therapy back in vogue, but its been a long road, and many miles to go before we sleep.
  • “We’re having some great discussions with the payor community…” Especially after the recent HCV deals. But isn’t this sort of like saying you are having great tax discussions with the IRS?
  • “The IPO window is still wide open in 2015…” Heard from every banker out in San Continue reading "Things I Expect To Hear At #JPM15"

Heat Death: Venture Capital in the 1980s

The history repeats itself crowd thinks that that there must be a bubble sooner or later. “Now?” they constantly ask, “Is it a bubble now?” as if history has to repeat whatever was most memorable about the last time. History may repeat itself, but there’s an awful lot of history that this particular venture capital cycle could repeat. Below is a short history of venture capital in the 1980s, my interpretation and comparison to the ’90s and today, and some thoughts about what that means. It’s long. If you’re attention-deprived, skip to ‘1980s v. 1990s’, about four-fifths of the way down.

To 1980

Baby, baby drove up in a Cadillac
I said, “Jesus Christ, where’d you get that Cadillac?”

- The Clash, 1979.

The Carter years were tough.

They started out well. The recovery from the 1973-1975 recession brought unemployment down and incomes up. But all this was undone by the return of inflation. By 1980, when inflation reached its peak, unemployment was rising, interest rates were at their highest levels since World War II, productivity growth had slowed, and business investment was falling. Fear ruled the markets, a “crisis of confidence” ruled the people.

Venture capital had a different trajectory in the 1970s: until 1978 there was almost nothing, then suddenly, it took off.

One of the reasons for venture capital’s current heady successes is the good judgment men like Burr [Craig Burr of Burr, Egan, Deleage] and Cronin [Dan Cronin of Ampersand Associates] learned while slugging their way through the near-dormant mid-’70s. The period between 1972 and 1978 may someday be remembered as venture capital’s years in the desert. After a heady adolescence in the late ’60s, the business almost disappeared from public view after the bull market of 1968-69 went into eclipse, taking with it the new-issues market that had buoyed the venture business. (Inc. Magazine, “The Billion Dollar Gamble“, 9/1/1981)

The pioneers of the 1960s and 1970s had figured out a winning formula: build a great network to source opportunities, spend months getting to know the management team and doing due diligence, invest at the earliest possible stage, work hard to help founders get the right team in place and put together partnerships, and take the company public only when it was ready to be a public company. The result was that, despite an IPO market that had virtually disappeared, iconic VC-backed companies made it out into the market. Cray and Tandem in 1976, Evans & Sutherland and Federal Express in 1978, and Apple and Genentech in 1980. The Reagan years looked promising.

The Accelerating Universe, 1980-1983

Never for money, always for love…
I guess this must be the place.

-

DataHero Number of Funds, by Vintage Year
DataHero IPOs
DataHero Tech IPOs
Screen Shot 2014-11-10 at 11.46.44 AM
avg irr vintage yr
DataHero New Capital Committed to VC (in millions)
DataHero VC Disbursements by Industry
DataHero High-tech Companies Formed in the US
Source: Gompers, Paul, and Josh Lerner. “The Venture Capital Revolution.” Journal of Economic Perspectives 2001 : 145-168
Source: National Science Foundation, “Science and Engineering Indicators–2002″
Source: Thomson Reuters, 2008 Investment Benchmarks Report: Venture Capital
Continue reading "Heat Death: Venture Capital in the 1980s"

Inside Trello, the venture-backed task-list app that’s determined to get big fast

The Fog Creek Software office in New York.
Want to master the CMO role? Join us for GrowthBeat Summit on June 1-2 in Boston, where we'll discuss how to merge creativity with technology to drive growth. Space is limited and we're limiting attendance to CMOs and top marketing execs. Request your personal invitation here!

NEW YORK — Over the summer, highly regarded New York software development shop Fog Creek Software spun out Trello, a product that a couple of developers had cobbled together three years earlier to help people keep track of what they have to do. Now Trello is taking off in a big way.

Fog Creek helped the new startup pull in a stockpile of venture capital and made sure Trello was outfitted with its very own corporate swag. But why now? And what made Trello so different from Fog Creek’s other developer-centric products, like bug-tracking system FogBugz and source code-hosting software Kiln?

It all happened because

Fog Creek Software cofounder Joel Spolsky at the company's office in New York.
A Kanban board.
Fog Creek Software cofounder and Trello chief executive Michael Pryor, right, speaks with Joel Spolsky, Fog Creek's other cofounder, at the Fog Creek office in New York.
The Fog Creek office in New York, where developers get their own soundproof rooms.
Joel Spolsky's MacBook. Spolsky once worked for Microsoft.
Continue reading "Inside Trello, the venture-backed task-list app that’s determined to get big fast"

Excited to be the Least Stylish Investor in the Most Stylish Company: Backing Bradford and Bezar

To date, I've backed three fashion related companies--Refinery29, chloe + isabel, and Ringly--and now I have the pleasure of joining the syndicate of investors in Bradford Shellhammer's new company, Bezar.

Could I a less likely candidate for such a portfolio?  :)

Bezar is where you find people who design the kinds of things that I see in other people's apartments and stop to pick up, inspect, wonder at and think, "That's awesome... I would have never thought of adding that to this place."

It's the kind of place where you buy clothing that make people notice because it's cool and interesting--even people like me, currently typing this with a Mets t-shirt on and jeans that I bought at Macy's.

It's a platform that puts the emerging designer up to be celebrated and I'm just as excited for the designers that are going to be featured on the site as I am for Bradford and his terrific team.

How I got to this investment was another long term story.  I was a huge Fab.com buyer in the early days when we backed it at First Round Capital.  It was the only marketing e-mail I opened up everyday--because it always had the coolest stuff.  Each e-mail brought with it something that I felt that need to tweet and share--and many, probably too many times, something I bought.

That was the core of what Bradford brought to that company.  It was built around his design sense.

But Fab fell into the trap that many companies who go down the VC route fall into--too much money, too soon, and growing too fast.  Money pushed the whole thing off the rails and made it into something that wasn't the exciting thing it was when it first launched.

After Bradford left, I reached out to him and asked him to get dinner.  I wanted to hear his lessons learned and help him figure out his next thing.  Small world, it turns out I also knew his husband from the finance world having met him over 10 years ago.  

We had a great chat and stayed in touch.  When he told me he was launching Bezar and asked me to be involved, I was thrilled.  Fab was a huge part Bradford, and Bradford is Bezar, but Bezar is not Fab.  It's so much more.

The team is hard at work improving upon the concept of a designer focused site that will inspire the creative juices in all of us.  It's fitting to be led by someone who experienced and learned a lot in his first time around.  Bradford said something to me that I think every entrepreneur should consider, "This might not be Continue reading "Excited to be the Least Stylish Investor in the Most Stylish Company: Backing Bradford and Bezar"

My First Six Months as a VC: Investments and Lessons Learned

During my first six months on the job, the majority of my time has been spent sourcing new investment opportunities for our fund. To date, we have invested in four startups that I sourced for Deep Fork. Below is a snapshot that provides some background on these investments followed by some takeaways from these experiences.

      Bowery.io (NYC), RebelMail (NYC / Washington, DC), and 2 unannounced (NYC and SF)

      3 enterprise (all in NYC); 1 consumer (SF)

      Led 1 funding round

      2 investments came via introductions by friends who were consulting / advising the companies

 

      1 investment came from having known a co-founder for an extended period of time

      1 investment came from a chance encounter with someone (a founder) building a product to which I became addicted a couple weeks before joining Deep Fork

Here is a sampling of my key takeaways (obvious and not) from these experiences that I have used and will continue to use as a guide going forward:

Relationships matter—you never know where your next intro, investment opportunity, etc. is going to come from. I do my best to keep relationships fresh / healthy, and, provided my schedule allows for it, I take nearly every meeting because it’s a chance to learn something new and expand my and our fund’s reach. Building these relationships and being genuinely helpful before, during, and after a company’s fundraising process (even if we don’t invest) is also of critical importance. At the the seed stage, I’ve found the “before” and “during” stages are a little harder because of how quickly many processes take place. However, in one instance (which I’ll detail a little more tomorrow), we were able to successfully win an investment because we had formed a tight bond with the founders over the course of a couple months through several meetings and dozens of hours spent in the product (along with a corresponding amount of feedback).

Related to my comments above, a lesson I learned from my dad, and one I have held closely during my short “career” (having graduated from college in 2009), is that people like doing business with people they like. It’s often hard to build a connection and figure this “chemistry” out in a short meeting or initial phone call with an entrepreneur, but it’s something I go back to when evaluating any investment. And I know entrepreneurs do the same thing when evaluating prospective investors. “Can we work together over the next 5 to 10 years?” Building and maintaining a good rapport with founders (regardless of whether we invest) has already proved to be crucial in my first six months on the job, Continue reading "My First Six Months as a VC: Investments and Lessons Learned"

Immuno-Oncology: Scratching the Surface

Another day, another announcement about great data from immuno-oncology.  It’s clearly one of the hottest fields in biopharma today, and has been for a few years.  The opening paragraph of a recent Leerink report by Seamus Fernandez and team on I/O is a great summary of the field today:

Others may complain about ‘IO fatigue’ but we can’t
get enough of it. Biopharma companies are changing the way we treat cancer by unleashing the immune system, achieving functional cures
in several of the most deadly cancers. The breadth, durability, and tolerability of PD1/PDL1 antibodies demonstrated over the last three years should establish this class as the backbone of a new pillar of cancer care, immuno-oncology.

And it goes beyond the PD-1 axis; as Leerink notes, and was highlighted in this 2013 NEJM paper, the race for the best combinations with synergistic efficacy is well underway. The current wave of late stage therapeutics represent a $40B-plus market opportunity (again according to Leerink), with significant portfolios at Novartis, BMS, Merck, Amgen, AZ, and others.  We and other venture firms have been quite active in the space.  Earlier this year, Novartis acquired CoStim Pharmaceuticals, an immuno-oncology checkpoint inhibitor company backed by MPM and Atlas (here); we’ve also been supporting bispecific antibody programs in the checkpoint and I/O space at F-star (here).

Stepping back from the business aspects, the big advantage of immuno-oncology is its adaptive anti-cancer mechanism.  As an individual’s cancer evolves and mutates, the patient’s immune system evolves its anti-tumor response – made possible by either removing the brakes or stepping on the gas via these new I/O therapies.

This isn’t a new concept, or a new field.  During my training in immunology two decades ago, immuno-oncology concepts were also hot.  Lots of enthusiasm (and funding) underpinned the first wave of cancer vaccines: tumor lysates, defined epitope cassettes, DNA vaccination, etc…  And although it was relatively easy to induce proliferation of tumor-antigen directed T-cells, they largely weren’t effective in vivo.  Over the intervening period, researchers elucidated that tumors evaded these tumor-directed T-cells by subverting immune checkpoint pathways and other immune-regulatory mechanisms.  This insight, among others, is what unlocked the potential for I/O therapies to enable a functional immune response that is tailored in a patient to their particular tumor.

I/O represents the ultimate in personalized medicine, as the tumor antigens and specific epitopes leading to T-cell mediated tumor destruction in any given patient are likely different.  The mechanisms and targets of tumor killing are likely both polyclonal (T-cells emerge against a number of different tumor-specific epitopes) and dynamic (they change over time); this is in direct contrast to the static Continue reading "Immuno-Oncology: Scratching the Surface"

Benchmarking LinkedIn’s S-1 – How 7 Key SaaS Metrics Stack Up

Since LinkedIn’s IPO in 2012, the company has grown its market cap by 6x and as of this writing is worth about $27.5B. Second to Salesforce, LinkedIn is the second largest SaaS company in the world. Unlike most SaaS companies which are B2B, LinkedIn is a B2C2B company. LinkedIn attracts hundreds of millions of consumers to post resumes online and sells this data and access to its audience to advertisers and recruiters and salespeople.

My First Six Months as a VC: SF vs. NYC

I’m coming up on finishing my first six months as a VC, and I’ve been reflecting on a number of things during the last few weeks. So, rather than keeping them to myself and a few close confidantes, I figured I’d think out-loud and jot them down, so to speak, in order to welcome feedback / advice / questions / etc.

The first post below details my thoughts on my move back to NYC after a year in San Francisco. I’ll publish a second post tomorrow on some learnings / takeaways / themes / etc. among investments I’ve sourced for Deep Fork, thus far. And, on Friday, I’ll write about challenges I have faced and am facing as well as some things that have surprised me so far.

As I mentioned in the initial post about my current role, my time in San Francisco was an amazing learning experience, akin to startup grad school, but I was excited to return to NYC and anticipated immediately immersing myself in the city’s startup community and the city itself. However, being back here has exceeded my expectations. I’ve been able to reconnect with people in the tech community whom I met during my first stint in NYC and have met numerous others, as I’ve come back into the fold fairly easily, primarily due to the collegial, collaborative, and inclusive nature of the city’s startup ecosystem.

My year in SF was the best possible (and essential) startup education, but, to be quite frank, it often felt like I was on a permanent work trip. My biggest gripe with SF wasn’t about “work-life balance” (I expect to work a shit load and love my job and the hours could never be as bad as banking)—it was about “tech-life balance.” Worrying about who overhears your conversation at Sightglass, explaining the startup at which you work while at a party (“I’ve never heard of Wanelo…what is it?”), making sure someone doesn’t look at your laptop when you’re reviewing a company’s AngelList profile or deck becomes exhausting. You need to work extremely hard to find a non-tech outlet in SF, and, if I’m honest with myself, I didn’t work hard enough to find one consistently. However, in addition to being closer to my family and long-time friends, what I love about NYC is the fluidity of being able to move seamlessly among industries and backgrounds and enjoy a balance naturally. Ultimately, I have become an ardent believer that personal happiness begets professional happiness (and success)—professional prowess can’t be a panacea.

Additionally, I believe that being in such a diverse environment, in terms of industries (i.e. finance, tech, fashion, advertising, etc.), people’s cultures and background, Continue reading "My First Six Months as a VC: SF vs. NYC"

What Constitutes Failure in Venture Capital?

Venture capital investors have long feedback cycles (as much as 6-7 years) and extremely unstructured time (one could justify almost any activity as being in furtherance of getting a deal or helping a portfolio company). So, we often look for signals that we are good investors along the way. Hunter Walk said wisely last month to Run Your Playbook, Not Someone Else’s, which got me thinking about this.

Many of these signals are external and qualitative: media coverage, social followings, ‘what people tend to say about you’, etc. Increasingly some of the signals are external and quantitative: Mattermark rankings, Pitchbook rankings, CBInsights rankings, etc.

Internally, investors have signals, too. Surprisingly, though each fund has a way of benchmarking success/failure, there is incredible diversity between the approaches.

One partner I spoke with said that they track every point in their funnel, from “meetings taken” to “follow-up meetings” to “term sheet given” and like to see consistency in their ‘admit rate’ over quarters or years. 

Another partner never looks at the top of the funnel, and only cares about the relationship between “term sheets given” and “investments made”. If they write a term sheet and the company *doesn’t* take it, that is a sign of failure.

Yet another partner doesn’t care about term sheets that are successfully accepted, and instead measures success as term sheets written where the company had at least one other term sheet from a ‘reputable firm’.

And another partner still measures term sheets written where the company, whether the firm invested or not, goes on to raise significant follow-on funding.

Each of these signals reflects the personality of the investor and of the firm, and I often learn almost as much about how a fund sees itself (and intends to fit into the future) from this than I do from its portfolio.

Our signal, for now, is this: did a company that fits our investment thesis, where we love the mission and brand, raise capital without us hearing about it first?

Who knows what that says about us. But I do know this: if you’re working on something and looking for funding, holler at us!

NYC and Chicago indie.vc Information + Q&A Sessions

I’m heading back east next week and thought it might make sense to host a couple informal sessions where I could give a bit more of the backstory on indie.vc and where those who’re interested in participating could ask questions.

So, I’ve lined up dates in NYC and Chicago.

NYC will be next Wed evening @ Kickstarter HQ. RSVP here.

Chicago will be a brown bag lunch session next Friday @ Basecamp HQ. RSVP here.

These will be very informal and free form sessions. Space will be limited so if you’re interested, jump on this quickly.

And please only RSVP if you really plan to come.

Thank you to Yancey and Jason for their generosity in hosting us. 

I’m looking forward to meeting many of you next week.

My First Six Months as a VC: SF vs. NYC

I’m coming up on finishing my first six months as a VC, and I’ve been reflecting on a number of things during the last few weeks. So, rather than keeping them to myself and a few close confidantes, I figured I’d think out-loud and jot them down, so to speak, in order to welcome feedback / advice / questions / etc. The first post below details my thoughts on my move back to NYC after a year in San Francisco. I’ll publish a second post tomorrow on some learnings / takeaways / themes / etc. among investments I’ve sourced for Deep Fork, thus far. And, on Friday, I’ll write about challenges I have faced and am facing as well as some things that have surprised me so far. As I mentioned in the initial post about my current role, my time in San Francisco was an amazing learning experience, akin Continue reading "My First Six Months as a VC: SF vs. NYC"