what startup investors are looking for
TRANSCRIPT
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WHAT STARTUP
INVESTORS ARE
LOOKING FOR
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INVESTORS DO NOT EXIST TO GIVE YOU PERMISSION TO START
NOR TO MAKE GOLD OUT OF YOUR CRAP IDEAS AND POOR TEAMS
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YOU ARE THE PRIZE INVESTORS ARE COMMODITIESGREAT TEAMS WITH GREAT PRODUCTS ARE RARE MONEY IS EVERYWHERE
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STOP SUCKING THE F*CK UP TO INVESTORSMAKE THEM SUCK UP TO AND CHASE YOU!http://venturehacks.com/articles/no-lead
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IS YOUR PITCH A DATA PITCH OR A CONCEPT PITCH?VISION VS FACTS - DID YOU ALREADY LAUNCH?
https://www.linkedin.com/pulse/20131015161834-1213-what-i-wish-i-knew-before-pitching-linkedin-to-vcs
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PRE-LAUNCH? SELL THE VISION LIKE NO TOMORROW
POST-LAUNCH? PREPARE TO SHOW YOUR METRICS
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DECK CONTENTS1. COVER
2. MISSION
3. SUMMARY
4. TEAM
5. PROBLEM
6. SOLUTION
7. TECH
8. MARKETING
9. SALES
10. COMPETITION
11.MILESTONES
12.CONCLUSION
13.FINANCING
MORE?
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WHAT INVESTORS ARE HEARINGREGARDLESS OF WHAT YOU ARE SAYING
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WHAT THEY HEAR
• Is there money to be made here? • Are these the right people who will
make me money? • How much money can we make
here (with these people)?
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HEURISTIC VC WILL ONLY INVESTIF AND ONLY IF TEAM IS RIGHT & OPPORTUNITY SIZE IS BIG ENOUGH
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• TEAM • TRACTION • TREASURE
- Thomas Grota, VC DTAG
http://www.slideshare.net/tgrota/what-investors-are-looking-for-a-view-from-a-venture-capitalist
TL;DR:
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CAC VS LTV •For each buck you spend acquiring a
customer, how many bucks does she leave behind in the whole lifespan you have her as a customer?
•CAC = Customer Acquisition Cost •LTV = Customer Lifetime Value •A CAC : LTV ratio of 1 : 3 or better = good
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DRIVING FACTORS • HIGH CHURN RATE • LOW CUSTOMER
SATISFACTION • LACK OF STICKINESS
• RECURRING REVENUE • SCALABLE PRICING • CROSS-SELL / UP-SELL • ADDITIONS TO PRODUCT
CATALOGUE • LEAD-GEN FOR 3RD PARTY
• SALES FORCE IN THE FIELD • OUTBOUND MARKETING • UNOPTIMIZED CAMPAIGN • WRONG TARGET AUDIENCE • WRONG CHANNEL • NO NETWORK EFFECTS
• NETWORK EFFECTS • INBOUND MARKETING • FREE OR FREEMIUM • OPEN SOURCE • FREE TRIAL • TOUCHLESS CONVERSION • DIRECT MARKETING • CHANNELS • STRATEGIC PARTNERSHIPS
CAC LTV
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GROWTH RATEEXPONENTIAL
•“Startups = Growth” byPaul Graham YCombinator
•What is your growth week over week? • More than 7% week over week is good
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ENGAGEMENT RATEGROWTH IS NOT ALL
•“30 / 10 / 1” by Fred “AVC” Wilson
•What is the % of all your registered users that will use the service or app Monthly / Daily / Concurrent (At Any Given Time)?
•30/10/1 or better is good
•Especially important for B2C apps
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COHORT ANALYSIS - YOU NEED TO DO THIS
• Video: Cohort Analytics Explained
• Video: Google Labs Cohort Analysis Workshop
READ http://cohortanalysis.com/
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SAAS METRICS YOU NEED TO TRACK IT RIGHT
• The Ultimate SaaS Metrics Cheat Sheet
• Christoph Janz' Blog (kpi dashboards)
• David Skok's Blog (SaaS metrics)
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Your churn rate is the amount of customers or subscribers who cut ties with your service or company during a given time period. These customers have “churned.”
READ: http://churn-rate.com
CHURN RATE
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EXISTING MARKET SIZE HOW TO DEFINE IT
•TAM - Total Available MarketTheoretical total market size or customer mass with problem today
•SAM - Serviceable Available MarketTheoretical total market size or customer mass that are able to use / purchase a solution like yours right now
•SOM - Serviceable Obtainable Market (or TM - Target Market)Your target market cap or customer base within the next 2-3 years, your credible ambition
TAM
SAM
SOM
PITCHINGMASTERCLASS.COMhttp://steveblank.com/2013/11/08/a-new-way-to-look-at-competitors/
NEW MARKET SIZEHOW TO DEFINE IT
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BUSINESS MODEL CANVAS INSTEAD OF BIZ PLAN
• Understand how your business couldwork - or NOT
• Get the book “Business Model Generation” to understand and communicate your Business Model
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