Startable - Healy Jones’ & Prasad Thammineni’s Blog

As I found out this morning, there are actually entrepreneurs who read this blog, so Happy Thanksgiving to all of you! I’ll be off the grid until next week, so don’t let the markets fall further apart while I’m up in rural New Hampshire.

-Healy

As I continue to have my thinking cap on regarding cloud computing for the enterprise, I’m trying to come up with the different “pins” that will need to get knocked down for real enterprise adoption. I was turned on to a post on ElasticVapor on a cloud computing interoperability effort via a CNET post. The basic tenant of the article is that in order for enterprise to get really excited about moving applications/data into the cloud that they will have to be able to easily port data between different cloud computing providers’ systems.

Since my relatively dense previous post on cloud computing adoption and the enterprise wasn’t all that well loved by this blog’s readership base, I thought I’d post another… Read the rest of this entry »

Seeing the success of the Quick VC tips from Healy Jones,  I am starting a new series from the prespective of an Entrepreneur:

Entrepreneur Tip #1: Get enough sleep the night before the VC pitch

From personal experience, I found that if I sleep well the night before the pitch, I do a much better job with my presentations whether it is to a VC, a partner or a customer. You will be more attentive, less nervous, more responsive,  your answers will be well thought and the delivery will be smooth and to the point.

The actual numbers of hours of sleep that you really need depends on you. Research has shown that one needs about 6.5 to 7.5 hours of sleep. The other important element of a good sleep is the time at which you go to bed. Here consistency is important. You should go to sleep at the same time as you did the entire previous week. What I also found is that if I sleep before midnight, I tend to get good sleep and I need about 6.5 hours. The longer I stay up, the longer I need to sleep to get the same rest.

If you are travelling across the country to make a presentation, you need to make sure that the timezones don’t mess up your sleep. You should arrive at the hotel early enough that you get some good sleep. Last week, for instance, I was in Seattle for a big presentation and I went to bed at 9 PM PST (12 AM EST) and woke up at 4 PM PST (7 PM EST). I was well rested and ready to go. If you are overcharged and are unable to get sleep, Tylenol PM or Advil PM will do the job.

Yet another low-value tip for the entrepreneur about to pitch a startup idea or business plan to a venture capitalist. This one is for entrepreneurs/founders who will be presenting at the VC’s office:

VC Pitch Tip #3 - Get to the venture capitalist’s office early

A good venture capitalist is very scheduled during the day, and has only allotted a certain amount of time to meet with your startup and listen to your initial business plan pitch. Usually, for a first meeting, this is an hour to and hour and a half. The VC will likely be running off to meet with another entrepreneur or to get onto a phone call with a portfolio company right after the meeting with you - so you don’t have a lot of time to get your vision across!

The reason that you should get to the VC’s office a bit early is because you may experience annoying technical issues hooking your computer up to the projector, connecting to the internet or preparing your product/solution demonstration. Since you’re only got a short amount of time to make the venture capitalist “get” your vision, any time spent fiddling with your laptop or messing around with projector cables is time lost. By getting to the meeting early you will allow yourself some buffer to set everything up and do a trial run of your demo - hopefully giving you all the time possible to get your idea across.

I know this doesn’t seem fair. You’ve gone through the effort to prepare a presentation, dragged yourself away from your team and development work and are ready to bare your soul to some jerk VC… and they won’t even give you the courtesy to run over the schedule meeting time by a few minutes. However, keep in mind that there is likely another entrepreneur in the meeting room next door ready to pitch their idea to the very same VC.

While we can debate the rudeness of being late to a meeting (something VCs are notoriously prone to doing, sorry), there is no debate that the more time you’ve got to explain your startup the better your chances are. So, while it’s a pain to get set up early and then twiddle your thumbs for a few minutes waiting for the VC, it is much better than giving a half-focused introduction to your idea while you mess around with F8 key on your laptop.

Just a quick blurb on an Atlas portfolio company, Lilliputian. Lilliputian is creating a micro-fuel cell capable of powering mobile devices substantially longer than traditional batteries. Massachusetts Governor Deval Patrick was on hand yesterday to celebrate Lilliputian’s expansion plans. Massachuesetts state government seems to be really committed to turning the area into a real player in the clean energy industry. The region has the technology talent and investors to make it happen, and it is nice to see the state supporting this effort in a substantial way.

Julien Wallen, CFO at a startup called pearltrees, has pulled together some interesting data on VCs who fund internet startups. He used Crunchbase as his source, so the data isn’t perfect, but there are some pretty interesting data points. While this data isn’t a perfect source for info on venture capital equity investments, there are some very cool tidbits in it.

There is no surprise that Venrock, GC and Spark are the Boston players near the top of the list. 

Pre-money valuation (average) go from $5 to $22 to $45 (millions) for the A, B and C rounds, respectively.

Note that this is from Crunchbase, and so the data isn’t perfect. In fact, my fund, Atlas, would rank much more highly if some of our companies were included, such as Songbird, Zoopla, OwnerIQ, Moo, etc. Some of this is because Crunchbase has a strong US bias, some is because not all of our companies are in Crunchbase or are not properly categorized in Crunchbase, etc. 

However, I hope that Julien continues to update this list, as it is quite interesting.

Continuing with my theme of quick tips for the startup entrepreneur pitching his/her startup to venture capitalists, I’d like to offer this relatively worthless tidbit:

VC Pitch Tip #2 - You won’t be eating much lunch during that “lunch” meeting

A lunch meeting with a VC isn’t really a lunch meeting for you, because you’ll be the one talking. Remember, you are meeting the venture capitalist to pitch your business. That means you’ll be presenting and answering questions while the VCs stuff food down their throats. There will be food available for you to eat, but there will not be time for you to eat it. If you have low blood sugar or get distracted when hungry I’d suggest you grab a bite to eat before your lunch meeting with the VC. 

VCs don’t schedule these meetings to torture entrepreneurs, but sometimes it feels like that is the case, with the entrepreneurs staring forlornly at their plates while frantically working their way through the PowerPoint slides… the only chance to grab a quick bite when a self-important VC launches into a long-winded diatribe about the importance of technology differentiation and something about a “China Strategy.”

The other tip related to this one is that you probably want to pick the food that is the easiest to chew. You never know when that VC will finish up the useless “China Strategy” point and leave you with just a second to chew, swallow, clear your throat and come up with some sort of competent sounding response to the asinine question. 

(The intent of these tips is to help the entrepreneur with little things that can be done to make the actually meeting with a venture capitalist go a bit smoother. None of these tips will directly cause you to raise capital, but may make the actual pitch go more smoothly.)

I’ve decided to post some really basic tips on presenting your startup business plan to venture capitalists. The intent of these tips is to help the entrepreneur with little things that can be done to make the actually meeting with a venture capitalist go a bit smoother. None of these tips will directly cause you to raise capital, but may make the actual pitch go more smoothly.

Pitching a VC your company is quite stressful. I hope that these silly little tips can help you relax and decrease distractions, so you can focus explaining your business and selling your team.

VC Pitch Tip #1 - Turn off your screen saver.

Many times during a presentation by a startup CEO we get into a lengthy discussion. During these discussions the startup executive’s computer (the computer that they are using to project their slide deck for us) can kick on. I’ve seen CEOs horribly distracted by their screen savers turning on, even when we were not looking at the slide/screen at all. I don’t mind when the screen saver flicks on, and I’d imagine that most VCs don’t care either, but if this sort of a thing distracts you then turn off the screen saver before your pitch. 

If you are trying to raise early stage venture capital and are actively engaged with a VC or two, you may have noticed a funny variance in the VCs level of interest, excitement and mood. This is completely normal! As a startup’s dialog with a VC matures the VC will go through a totally natural “Deal Hype Cycle.” I’ve diagrammed the important stages in this venture capital deal hype cycle below and included some tips on how you can recognize these stages in your potential funding partner - and what you can do to help keep the process moving along. As a startup CEO, you don’t have to be a passive participant on this roller coaster… you can positively influence the VC and keep your fund raise on track! Note also that this is the cycle for an investment that actually closes.* (You may also be interested in my previous post on the VC deal process.)

Stage 1: The Pitch

Hype Level: Pretty Good

If the VC took the meeting with you they must be at least decently interested. Most business plans introduced to venture capital firms never make it to this stage (i.e. are never met with), so your startup probably has something going for it.

What you can do: Read the rest of this entry »

This morning Amazon announced the finalists in their Startup Challenge - Prasad and the team over at Pixily are finalists! Congratulations to the entire Pixily team! For those of you who don’t know, this is a competition where Amazon is searching for the “hottest” startup using Amazon’s Web Services to build its infrastructure and business. If the Pixily team wins they will walk away with $100,000 in cash and AWS credits!

I believe that the finalist will be picked on 11/20 at Amazon’s head quarters in Seattle, so godo luck to Pixily!