HOW VC'S SEE YOU

Portrait of an Investor

But... Benefits of Pattern Matching

PORTRAIT OF AN ENTREPRENEUR

BUT A FEW OF YOU WILL BE VERY

What drives a venture capitalist to invest in a start-up?

Market?
Team?
Both?

One of the biggest reason VC's pass on investing is that a market doesn't "feel" big

VC's ALSO PASS DUE TO TEAM ISSUES

What does the ideal entrepreneur look like?

White, male, nerds, no social life, Harvard or Stanford drop-outs - John Doerr, 2009

Of course, looking for the next Mark Zuckerberg can lead one to miss the next great University of Washington entrepreneur... Or Diane Greene...

WHAT SHOULD A TEAM HAVE?

IF YOU DON'T HAVE THE WHOLE TEAM

MOTIVATIONS

• Equity
• Co-founder status
• Friends and/or former colleagues who want to work with you
• Timing can be everything
• Must read: "The Founder's Dilemma" by Noam Wasserman
• VC's try to figure out your motivations

WHAT AN ADVISORY BOARD CAN DO

• Lend legitimacy
• Fill in holes: functional or industry knowledge
• Bring connections: customers, employees, and investors
• But...

BIG NAMES WHO ARE WINDOW DRESSING

HOW DOES TEAM DUE DILIGENCE WORK?

• LinkedIn
• GitHub
• Portfolios
• Reference list
• Professors
• Sometimes none of the above

WHAT ARE VC'S LOOKING FOR?

• If it's an enterprise company...
• Expertise/industry understanding is critical
• Go to market understanding
• Management experience
• Functional experience (engineering and sales)
• Strong 24/7 work ethic and agility

WHAT ARE VC'S LOOKING FOR?

• If it is a consumer company, then...
• No prior experience necessary: the numbers tell the story
• Before there are numbers: intelligence, ability to learn and pivot quickly, great engineers, unique consumer insights, and drivers (personality description)
• See prior: 24/7, fearlessness, belief in oneself

A GREAT PITCH SHOULD

• Tell why the world needs what you have and who cares about it
• Explain your company's strategic value
• Describe what is differentiated and defensible
• Assert why you will win
• Describe what milestones you will hit so the next guy pays 2X today's price

MOST COMMON MISTAKES

• Product pitch vs. investor pitch
• Failing to do any validation
• Focusing broadly (no platforms)
• Failing to address GTM - also known as "if we build it..."
• Top down market sizing only
• Thinking the only milestone is time to running out of cash

WHEN SHOULD YOU RAISE VENTURE CAPITAL?

• When you really, really need it (it's expensive)
• When you think you can provide a return on their money and your time
• When you find a VC with whom you want to work (the partner matters, not just the firm)
• Note: raising money isn't the goal... Making a return on that money is!

BEST PITCHES

• Local Ad Tech Co Series A: (went on to raise $111M)
• Social network Series A: was consistently doubling revenue
• Cyber Security Series B: many reference-able customers

WORST PITCHES

• Social Networking co: big expectations; small user base
• Social Networking co: tough premise - ex's
• SaaS company that never talked to a customer
• Too many to name...

GenAI may be coming for our jobs

TinyTeams.xyz

What This Means for You

• You need not build a company for terminal value because....
• $12M in ARR for 8 people is a great dividend paying business
• But, you could build one by accident: see Calendly as an example.
• This is particularly important, given what is going on in venture capital

VC Secondaries

What is happening?

A Final Word for the Women Here

YOUR MILEAGE MAY VARY