fundraising hacks: raise more capital faster for your company
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Fundraising Hacks: Raise More Capital Faster for Your CompanyTRANSCRIPT
© 2013 David Teten. More at ffvc.com and teten.com http://www.flickr.com/photos/roblee/133498854/
David Teten, Partner, ff Venture Capital ffvc.com // @ffvc teten.com // @dteten HBS Alumni Career and Professional Development / HBS Alumni Angels February 5, 2013
photo by Aaron Patterson, http://www.flickr.com/photos/40875537@N04/5659908590/
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
Don’t Take Notes!
Download these slides, sign up for updates,
and get more free resources at: ffvc.com/raise-capital
and teten.com
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
• Introduction
• Traditional Methods
• Social Media
• Capital Network
• Next Steps
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
The Butterfly and the Entrepreneur
Egg
http://www.mesc.usgs.gov/butterfly/butterfly-life-cycle.html
Caterpillar
Chrysalis Breakout
Butterfly
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
ff Venture Capital (ffvc.com)
• Early-stage technology venture capital fund • 160 investments in 60 companies since 1999 • 17 employees • First investments typically $50-$400K at valuations of <$5m pre-money • Follow on in later rounds for best-performing startups • Prominent investments include:
Cornerstone OnDemand (IPO); Quigo Technologies (sold to AOL for reported $340m); Klout; 500px; Voxy; ThinkNear
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
List of companies through June 30, 2012
ff Venture Capital: 160 investments in over 60 companies since 1999 (ffvc.com/companies)
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
Selected ff Venture Capital Acceleration Resources
• Entrepreneur Network • Mentor Network • Preferred Supplier Network • Office Space • Continuous Process Improvement • Assistance in key startup functions: Finance and Accounting,
Fundraising, Recruiting, Development, Design, Media Outreach • More at ffvc.com/resources
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
Harvard Business School Angels of Greater New York (HBSAlumniAngels.com/NY) • Members are Harvard affiliates from all industries. • We invest in companies regardless of any Harvard affiliation. • In last twelve months, $1.8m invested in 8 companies. • $84K mean individual check size per company per round. • Third largest angel group in NY tri-state area by number of paying
members (to our knowledge). • Launched Venture Capital Access Program, focused on helping women
and minority investors raise capital from our network.
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
Venture Capital Access Program
• Program to help minority and women entrepreneurs meet members of the Harvard Business School Alumni Angels of Greater New York
• Partnership with the Marathon Foundation, a subsidiary of the National Association of Investment Companies.
Introduction
Intro Social Media Network Next Steps
© 2013 David Teten. More at ffvc.com and teten.com
Tradition
David Teten (teten.com)
• Partner, ff Venture Capital, early-stage technology venture capital fund • Founder and Chairman, Harvard Business School Alumni Angels of Greater New York .
Co-founded Venture Capital Access Program, introducing women and minority entrepreneurs to Harvard-affiliated angels
• Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online (TheVirtualHandshake.com)
• Lead author of first-ever research study on best practices in private equity/venture capital deal origination
• Lead author of first-ever research study on best practices of venture capitalists in increasing portfolio company value
• Board Member, Social Fortress* • Harvard MBA 1998, Yale BA • @dteten
* ff VC portfolio company
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Introduction
• Traditional Methods
• Social Media
• Capital Network
• Next Steps
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Traditional Capital-Raising Methods Personal networks of principals “Friends, family, and fools” Direct outreach Can work well, but only through
introduction Advisory board Be careful about paying a fee of any
kind Conferences/ industry associations Legal ways to market broadly Communications with existing relationships
Monthly mail with your metrics
Business relationships with potential investors
Existing/potential customers are the best
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Introduction
• Traditional Methods
• Social Media
• Capital Network
• Next Steps
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com http://www.flickr.com/photos/23439761@N03/3258313816/sizes/l/
Social media allows you to convert cold calls to warm calls.
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
“Social media is a communications
medium that relies on its audience to create, modify, or
distribute the medium’s content
- Nick Gonzalez, SocialMedia.com
http://www.flickr.com/photos/briansolis/2735401175/sizes/l/, http://blog.socialmedia.com/how-should-we-define-social-media/. /
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Why should I care about social media for raising capital?
• Because 3 out of 4 Americans use social technology. (Forrester, The Growth Of Social Technology Adoption, 2008)
• 2/3 of global internet population visit social networks (Nielsen, Global Faces & Networked Places, 2009)
• Visiting social sites is now the 4th most popular online activity—ahead of personal email.
(Nielsen, Global Faces & Networked Places, 2009)
• Visitors spend 5 million minutes per day on Facebook. (Facebook)
http://www.slideshare.net/mzkagan/what-is-social-media-2005829 . http://www.flickr.com/photos/sreejithk2000/2385193167/sizes/l/
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
But I don’t use social media, and neither do (some of) my targets! • The reality: you and your target investors are in the social media matrix
whether you like it or not. • Your candidates search for you on Google before doing business with you. • You are already a member of gated online communities, which you may or
may not be fully leveraging: your alumni network, your local “Moms” or “Dads” mailing list, your church/synagogue/mosque
• You can accelerate your sales process by leveraging potential candidates’ digital footprints. These help you to source leads, filter them, and then run a better educated sales process.
http://www.slideshare.net/mzkagan/what-is-social-media-2005829 . http://www.flickr.com/photos/sreejithk2000/2385193167/sizes/l/
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Introduction
• Traditional Methods
• Social Media
• Capital Network
• Next Steps
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Investor Network Valuation Formula
David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
Ch = Character Co = Your Firm’s Competence R = Relevance of the contact S = Strength of your relationship I = Information N = Number of people D = Diversity
= D * ∑ (Chn*Con *Rn* Sn*In) N
n=1
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Always Be Closing
Alec Baldwin in Glengarry Glen Ross
http://www.onlygoodmovies.com/blog/thoughts-on-film/glengarry-glen-ross-my-favorite-movie-scenes/
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Balance Strength vs. Number
Average Strength = Minutes Available / Person Number = # People therefore…
Average Strength * Number = Total Minutes Available
vs.
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Biography analysis software allows searches by common affinity and more effective subsequent outreach.
• Boardex • Data.com • Klout* • Pipl • ZoomInfo
Leading Providers of Biography Analysis Data
*
* ff VC portfolio company
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Daniel Zumino, founder of BCG Paris and angel investor, had made a small investment in a startup
• November 1999: He sent email to Stanford GSB alumni list seeking capital for the startup
• March 2000: Raised $8m through referral from alumni, via this listserv
David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
Case study: Entrepreneur raised $8m from an alumni email list
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• CogMap • Glassdoor • TheFunded • TheOfficialBoard
Corporate analysis software provides an insider view of the org chart, compensation, and customer views of a company.
Leading Providers of Corporate Analysis Data
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Cash is a market signal
* ff VC portfolio company
Interaxon* Campaign on Indiegogo*
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Phone • Email • Web conferencing • Instant messaging • Internet telephony
(e.g., Skype) • SMS • Twitter
Using multiple media channels promotes stronger trust-building
Caroline Haythornthwaite, “Strong, Weak, and Latent Ties and the Impact of New Media,” The Information Society, 18 ( 2002) 385–401. http://flickr.com/photos/re-ality/41676755/sizes/o/
Major Media Channels for Origination (descending order of importance)
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
You can identify potential startup investors through any of multiple online databases
Selected Searchable Databases of VC Funds
• AngelList
• BoogarLists
• CB Insights
• CrunchBase*
• Galante’s
• Grey House
• LinkedIn*
* Has the most data for free
• PWC MoneyTree
• TheFunded*
• VCProDatabase
• VentureDeal
• VentureXpert
• vFinance
• VCGate
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Track VC Investing (a lagging indicator)
• CB Insights • Crunchbase • Techcrunch • Mashable • Mercurynews.com/vc • Venturebeat
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Effective capital-raisers are data hounds
Tools for Assimilating Data into Your CRM System
Data source Selected technology for inserting data into CRM Business Cards
ScanBizCards, Cardscan, CardMunch, CardShark, IRIScan, Neatco, Plustek
Emails Writethat.name, Contact Capture, eGrabber, Gwabbit Cloud Plaxo, LinkedIn
CRM Salesforce, Act
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Major Gated Communities for Investors
Early-Stage Private Late-Stage Private Public
AngelList Assoc. for Corporate Growth Albourne Village
Caplinked AxialMarket FT Alphaville Longroom FundersClub CapitalSphere Sum Zero Gust Comp & Carry Value Investors Club
PE-Nexus
Investors are connecting with one another via online gated communities; get in their door
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Yahoo Groups
• Google Groups
Online Community Platforms • Ning
Every special interest group has an online community
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Senior executives prefer to interact online behind barriers, just as they do in face-to-face networks
Sample Gated Communities for Executives
• INMobile
• Sermo
• Int’l Exec’s Resources Group
• Executive Forum (CT)
Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Target investors who are one step removed from you
• By geography • By industry • By personal
characteristics
http://flickr.com/photos/extranoise/169187125/sizes/l/
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
• Introduction
• Traditional Methods
• Social Media
• Capital Network
• Next Steps
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Step 1: Google Yourself
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Step 2: Be a Data Hound
http://www.flickr.com/photos/sookie/94778946/
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Step 3: Reduce Email Use
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Step 4: Join the Right Club
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Step 5: Find People to Meet Online
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
Any questions ?
Slides at ffvc.com/raise-capital
Sign up for updates at ffvc.com and teten.com
@ffvc @dteten
Network Next Steps Intro Social Media Tradition
© 2013 David Teten. More at ffvc.com and teten.com
ff Venture Capital does not endorse or encourage use of any of the sites discussed herein, and is not responsible for any damages caused by their use. You are encouraged to do your own due diligence and make your own independent decisions as to the appropriateness of these sites and services.
Disclaimer