STARTING YOUR STARTUP

Ways the Startup’s can also be Perfected

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We are living in the age of the entrepreneur — more people are starting up, and it’s ever important to stand out in the crowd. When pitching investors, then, it’s crucial that entrepreneurs do their research, understand what’s expected of them and pitch accordingly.

We spoke to a handful of venture capitalists and startup entrepreneurs to get their top tips on how to put together the ideal startup pitch. Here are the best five tips we heard.

Start With a Immense Company,

“Having a great startup pitch has more to do with setting up and running a great company than optimizing some type of sales process to investors,” says Ken Howery, co-founder of Founders Fund and PayPal. “Great investors can see through most tactics that you will use in the pitch process, so the best fundraising strategy is to build a great company.”

Easier said than done, right? Well, tough cookie — go big or go home. If you haven’t got a good idea, get outta here.

While you’re at it, put a little passion behind your pitch, says Howery. Share the story of why you got started. The founder of physician-finding tool ZocDoc, Cyrus Massoumi, started the company based on a personal experience — he burst his eardrum while travelling and it took him days to find a doctor. “That made the company’s story and his motivation for building the business compelling,” Howery says.

Don’t Forget the Basics,

There’s plenty of material out there on what exactly an entrepreneur should include in a pitch, and for the most part it comes down to a list of nuts and bolts that should all be there, says David Tetenff Venture Capital partner and founder and chairman of the Harvard Business School Alumni Angels of Greater New York. ffvc has invested in the likes of ContentlyHowAboutWe,Indiegogo and Klout, and recommends that startups cover a list of very clear points when pitching to them or other early-stage investors.

To put it short, the pitch should include details on the company overview, team, market, solution, business model, customers, competition, financial overview, funding, vision and of course, a demo — or at least a mockup — should be available for viewing.

“Cover everything investors want, or you look like you’re ducking the questions,” Teten suggests.

He evaluates about 700 pitches per year, he says, mostly via email, with less than 5% graduating to a phone call or meeting.

RxAnalytics CEO Deepak Gopalakrishna hasn’t seen quite as many pitches as Teten, but in the past two years, he’s judged a few dozen in the Carolina Challenge and the Duke Startup Challenge and sees pitches weekly through his roles as an Entrepreneurs Network Fellow at Blackstone and as a .406 Ventures fellow.

Gopalakrishna points out that the investor pitch is all about building trust. Do whatever you can to convey that your team, your product and your approach are all the best out there. In an email exchange with Gopalakrishna, I got an entire rundown on what he thinks should be included in a pitch, but I was most intrigued by his thoughts on how much (or little) technology speak should be included. He says that many entrepreneurs go heavy on the technology and how it works, taking up about half of their pitch with those details and only leaving a smidgen of time for competition and market details. He recommends the bulk of the presentation be about the current landscape and competition. “Beat this to death,” he says. “Your potential investors will love you. More importantly, they will trust you.”

Furthermore, Gopalakrishna advises startups to very narrowly identify their core secret sauce. “You are never cheaper, faster, better and of higher quality. Pick one.” And while you’re at it, know that your financial projections are always wrong, he says. “Be consistent with the industry and understand that you will take a haircut on all revenue/EBIDTA numbers and your costs will be too low. Account for this. This will show that you have thought about everything. If you can show you’re thinking in assumptions, you are already ahead of 90% of founding CEOs.”

Make Other Towards You,

No one wants to hear a lifeless nimrod pitch his company. Where’s the passion? Where’s the excitement?

Todd Medema, COO of AutoRef.com and winner of several pitch competitions, includingAlphaLab’s Elevator Pitch competition, likens pitching to acting. You’re an entertainer, so razzle dazzle ’em, as the song goes.

“Be human, entertain your crowd, and use your body and voice to help convey your message,” Medema advises. “If presenting is acting, then you need a good story to tell. Think about how movies and books draw you in, make the experience personal, and keep you engaged over several hours.”

“Imagine trying to keep an audience engaged with your talk for several hours. The greats can. Why? Because they using pacing, they keep changing things up so that you never get bored.”

Allyson Downey, founder and CEO of weeSpring, says she gives her startup’s pitch at least half a dozen times per day. It can get tiresome, but it’s critically important to bring the same level of energy and passion to the sixth pitch as you bring to the first one, she says. Downey also confesses that she’s had to become more comfortable with public speaking over time. “When you truly, truly love and believe in what you’re doing, it’s a lot less scary to get up in front of a bunch of strangers to tell them about it,” she says. In agreement with Medema, Downey agrees that storytelling is essential and that the old adage of “show, don’t tell” is huge here. “What will illustrate the need for your product?”

For some final tips of advice on owning a stage, Downey says, “Be yourself. It may sound obvious, but it’s possible to over-prepare. Being too scripted means you’ll sound canned, and no one wants to hear a canned pitch.” And when it comes to silences, use them as an opportunity to gauge your audience’s reaction to what you’re saying, she says, especially in smaller, one-on-one settings. The more feedback you get, the better.

Be Authentic and Tactful,

In the act of razzle dazzling it up, don’t go overboard. It’s not about throwing glitter in the air and using 5,000 Keynote or PowerPoint animations. Remember that trust is still the goal here, so be honest and thoughtful when pitching and answering questions, says Samir Housri, principal atRho Ventures.

“Don’t massage your numbers, omit critical information that will impact the business or exaggerate the extent of your business partnerships,” says Housri. You want to display your business in the best light possible, but a good investor will do diligence and uncover anything you might have strategically left out. If you misrepresent yourself or your product, you hurt your own credibility and this can start the relationship off on the wrong foot.

“Be able to explain the decisions you’ve made as a CEO or team leader. What we look for in a leader is someone that can think for themselves and makes rational decisions with the information they have available to them,” says Housri.

Do Your Fact-Finding,

Your honesty and thoughtfulness will only take you so far, and that’s where preparation comes in. “Have a deep understanding of the key drivers of your business, your largest customers and what your team is focused on,” says Housri. “The best CEOs are able to get inside the heads of their customers, investors and employees and know what they are going to ask in advance.”

“If you have good, well thought-out answers to our questions, it makes us believe that you’ll also have them for your customers and employees,” says Housri.

While you’re at it, make sure you’ve done thorough research on the people you’re pitching to, says Howery. Who you pitch to is nearly as important as what you pitch. You should know whythis specific investor would be a good partner for your company. Otherwise, investors might see a red flag — either that you will take money from anyone, or you are trying to create a bidding war — neither is a good situation on the investor’s end. Getting an investment from the wrong person can be a decision you’ll later regret, as not every investor offers equal value.

Your Cogitation,

For all of the investors and entrepreneurs in the crowd, share your advice on how startup entrepreneurs should go about crafting their pitches. What resources do you recommend first-time founders check out to make the most of their pitches?

Every Successful Business Plan Elements Behind It

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So you have a great product, platform or business that you’re stoked to start up. It can be an exciting and thrilling opportunity to get your own company up and running, but it’s also filled with stress and anxiety — that road can be full of obstacles and a lot of confusion.

Well, first things first: Have you done your business plan yet?

It sounds trite, but the business plan is really the roadmap to success. When done correctly and thoroughly, that document can not only put you on track to proper growth and healthy strategies, but it can also be the perfect way to introduce your company to potential investors.

Here’s a list of guidelines that will help you craft the right business plan for your organization. Keep in mind: All businesses are unique and have their own specific challenges that must be met. But, if you stick with these characteristics, you will already be miles ahead from where you started.

What’s your business plan must-have? Let us know in the comments.

Keep It Brief,

Many people consider a business plan to be the novelization of their ideal path to creating a company, jamming all hopes, dreams and projected profits into a pages-long document that, frankly, no one is interested in reading. A business plan doesn’t have to be filled with everything you’ve ever wanted in your business — it just needs to be straightforward.

“People think that a business plan needs to be a multi-page document that’s poetic in nature, and that’s not the case,” saysBarbara Findlay Schenck, author of Business Plans Kit For Dummies. “What you need to have is a piece of paper that details the main things that will keep your business on course.”

Schenck says the myth of the business plan as a lengthy document doesn’t match reality. In fact, just writing down the basics of your business is enough to think about your company’s pathway clearly, and how exactly you or your team will move forward.

Business plan specialist Greg Goodman agrees that excessive detail in a business plan, including month over month statistics or intense data projections, can not only be a burden on the company but also set unrealistic expectations for investors. An even worse mistake can be a business plan that includes a restrictive NDA.

“There’s a great grey area, and most VCs I’ve encountered will not sign one,” Goodman says. “They’re not going to sign it because they have the same liability issues as a company looking at an outside product. What if they’re already looking at developing it internally? Do they want to get sued by someone from Pennsylvania who thinks they have the greatest thing since sliced bread, but in fact they’re duplicative of something they’re already working on? It’s not worth it to them.”

But, Still Be Thorough,

Simple doesn’t mean sparse — the best business plan will be diligent in outlining the characteristics of the company that are most important. Hammering down the basics of your business, everything from a personnel onboarding plan to securing the proper name rights and trademarks, will ensure no important detail is left unchecked.

In her book, Schenck says that there are must-do tasks to make the business plan a useful document:

  • Describe the business.
  • Describe the product or service.
  • Describe the competitive environment of the product.
  • Describe how the business will make money through a business model.
  • Describe how to market the business.
  • Describe how you’re going to produce the product.
  • Describe the business team, whether it’s you or a small team.
  • Describe the financial projection, including how much money you need and how much money you will profit.

These tentpole concepts may seem obvious to some, but Schenck says she is surprised at how often these characteristics are missing from business plans of all kinds.

“It’s amazing how many businesses start without that knowledge and fail without that knowledge,” Schenck says.

Goodman says that even though it’s trite, the “roadmap” analogy is the most accurate way to approach the development of a business plan. By outlining all of the major points and remaining stringent about your details, you can have a solid pathway without the need for unnecessary details — and perhaps learn more about your own business in the process.

“You always should have a business plan just so that you guide your own steps,” Goodman explains. “The reality is that it has a certain value — it’s not just plotting out Step A to Step B to Step C. Once you start putting details on paper, you see stuff you wouldn’t have seen otherwise.”

Uniqueness Speaks Volumes,

No two businesses are alike, so business plans are not one-size-fits-all. Although it may be tempting to rip off a boilerplate business plan or to copy the plan from a successful business, that denies you the ability to address the unique challenges of your particular company. Worse, an untailored business plan is an easy way to set yourself up for failure.

“The business plan needs to mirror the proposed business endeavor,” Goodman explains. “So, what goes into it is everything that is necessary to depict that particular proposition, whether it’s a candy store or some high-tech venture.”

Goodman says that when writing a business plan, it’s important to write to your particular audience. If the business plan is a strictly internal document meant to keep the performance and growth of your company on track, then it should emphasize internal information that will help that (such as hiring order or important partnerships). If the business plan is an external document, then it’s all about writing about your business as attractively as possible to get investors intrigued.

“Even seasoned people don’t necessarily get that you need to think about who is reading your document,” Goodman says. “Your audience is different, and your audience can only be judged in relationship to yourself. If you’re Joe or Susie Smith and nobody knows your background, you need to write differently and make a different pitch for venture firms.”

Schenck says understanding the nature of the business is key to producing a great business plan. It’s important for founders to think about the purpose of the business, what they’re selling, who their audience is, and how it will make money. Those are questions that need to be answered right on paper, although Schenck asserts many businesses can’t answer them right away.

“These questions can be answered on the back of a napkin for all I care, but when you’ve answered them, you’re in business.” Schenck says. “Those questions answer what you’re doing, who you’re doing it for, how you’re doing it and how you’re going to make money doing it.”

Remember, your business is unique and deserves special care when crafting a plan for success. Making a fair assessment of your needs and planning accordingly will ensure that your plan is stable enough to get you off the ground.

How to Find a Lead Developer for Your Startup

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Hiring a lead developer for your startup is a “make-it-or-break-it-moment.” This is the person whose creative vision and technical know-how will determine the success of your product. This is the leader who will guide the engineers you hire down the line, accessing each of their strengths to maximize potential for innovation. And this is the person who will determine, through ability and ambition, whether your product is a standout or just another bit of noise in a tech scene full of loud voices.

But you probably already know that. You’re probably wondering how you’ll ever find the right person to serve as your startup’s lead developer, when the person who excels in interviews and jumps out on paper may not necessarily live up to your expectations.

Those are some valid concerns, and we understand why you’re holding off from doling out the offer. We’re here to provide you with important tips for hiring your top technical talent, to make sure you hire the right visionary to lead your brilliant idea to technical perfection.

Look Where They Hang Out,

If you were looking for great athletic talent, you would go to a batting cage, a gymnasium or a track. If you want to meet a brilliant developer, check out a local meeting for programmers.

Flatiron School founder Avi Flombaum recommends checking out Meetup.

“You find the right types of people from going to meetups, where those people might be hanging out,” he says. “Programming meetups are great for finding the people with the right experience.”

Flombaum recommends CTO Meetups for a more senior bunch of developers, as well as Agile Development Meetups, and the New York-local NYC on Rails Meetup and NYC.rb Meetup.

Avoid Quiet Geeks,

While you should never underestimate a true geek’s creativity, you want your lead developer to be a leader. Someone who’s not a great communicator really should not be considered.

“We look for the ability to speak to humans,” Thrillist CTO Mark O’Neill told Mashable.”Can you communicate well with non-geeks?”

Flombaum agrees, emphasizing the potential of developers who teach and write. You should think of the people who you’ve heard speak about programming and whose writing has inspired you.

“I think teachers, people who are teaching courses on Skillshare, make great mentors and leaders,” Flombaum says. “I like to look for people who can articulate their thoughts in writing. You should think, ‘Whose blog do I like reading?'”

Seek Technical Experience and Expertise,

Though it should seem like a no-brainer, all of the hiring experts we spoke with emphasized the need for dazzling technical credentials.

“The first thing we look for are top-notch technical skills backed by the right experience,” KonyCEO Raj Koneru says. “At Kony we put special emphasis on solid leadership skills, because in order for us to scale effectively, the lead has to motivate their developers to go well over and beyond the regular call of duty. In true developer fashion, leads will only be respected if they prove that they’re technical experts.”

Birchbox CTO Liz Crawford echoed the need for technical expertise. “Our ideal candidates are committed to delivering the best possible customer experience, value software engineering practices and never forget about scalability and reusability when designing code.”

However, according to O’Neill, tech know-how doesn’t guarantee an understanding of the Internet.

“We ask, do they understand the web?” he says. “We’ve seen great technical talent have a hard time adjusting if they’ve never worked on the web before.”

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Look Beyond the Usual Suspects,

The right lead developer for your startup may not be someone who’s currently seeking a job, so look beyond job boards and applications submitted.

“The right developer might not know they’re in the market for another job,” Flombaum says. “There are a lot of great programming newsletters that feature sponsored positions, and they’re read by developers who aren’t looking for jobs.”

In addition to going to Meetups where great developers mingle with other great developers, you should make sure your listing is seen by engineers happily employed or working on a project.

Ensure a Cultural Fit,

Working in a startup, there’s not room for a bunch of giant egos butting heads. There also isn’t room for people not willing to be scrappy and pick up additional tasks that are beyond the agreed-upon job description.

“We look for non-divas,” O’Neill says. “Yes, they are smart, but we need leaders who are also grounded.”

Crawford agree, noting that Birchbox seeks out engineers who “love to learn and are team players.”