🦄 Unicorn Mafia Startup

2021-11-17 11:10:40 https://blog.hubspot.com/sales/awful-first-sentences-that-are-killing-your-outreach-emails

7 Awful First Sentences That Are Killing Your Outreach Emails Open / Comment

2021-11-13 20:45:33 We just reminding that we have two group chats for you

Feel free to join and invite your friends

English speaking chat https://t.me/startupfounderschat

Russian speaking chat https://t.me/startupfoundersfor Open / Comment

2021-11-13 06:30:12 How much data is generated every minute? Open / Comment

2021-11-10 10:52:05 Preparing financial projections

My strong recommendation is to limit your time spent on this to the very minimum, e.g. 1 hour total. Today, especially in Silicon Valley, *3-year projections are no longer a common requiremement for pre-seed and seed fundraising*. If someone pressures you to have a financial model, you can respond with super basic stuff like this:

1 year: 5 people, spending $300k, revenue: 0
2 year: 10 people, spending $1M, revenue $50k, 2 pilots
3 year: 20 people, spending $2.5M, revenue $600k, 5 pilots, 2 multi-annual contracts

This the level of detail will suffice for most conversations. For more complex models, simply ask other founders for their spreadsheets and just modify the numbers.

There are some industry verticals (ecommerce and delivery) have much more fragile unit economics and will need more sophistication from day one. But most other industries don't need detailed financial projections at seed level. Open / Comment

2021-11-09 09:28:58 Investor personas

Different investors are motivated by different things, invest at different stages, and can be the right choice for different startups. One of the most important steps in fundraising process is to figure out what investor personas will be the best fit for your company.

*Top-tier investor** — is well know, invested in famous companies, has strong inbound dealflow from their personal network. Sees 1000-5000 companies per year, invests primarily in (1) super strong traction, (2) repeat founders with great past success, (3) people they have strong personal connection with like former colleagues.

New angel — looking to build a reputation and learn about investing. Looks for companies where they can provide hands-on help based on their previous skills and work experience. Hard to find on places like Angel.co. Ask other founders — what fresh new angels they've seen.

New pre-seed or seed fund — looking to add first few "logos" to their portfolio and impress potential LP to add new capital to their fund. Look for something that looks "trendy" or "awesome". Understand that they need to come early or accept companies with less traction to win the deal against top-tier investors. Look for "new fund" announcements on publications like TechCrunch and Venture Beat.

Casual investor — investor who looks to learn more than to make money. Has a day job like a CEO of late stage startup. Has some personal areas of interests and free capital to play with. Interested in investing in smart people exploring their market of interest. Look for active operators who casually invest. Some of them invest out of "scout funds" associated with top venture firms.

Non-venture investor — someone who traditionally been active in other forms of investments like real estate, private equity. In many cases, a family office of a wealthy person. Looking for venture deals aligned with their primary area of business.

There are many more personas, but these will give you an idea. The mistake many startups are making is only building their list around "top-tier investor" persona. For most startups it's not the most likely type of investor to invest!

By Yury Lifshits @lifshits Open / Comment

2021-11-08 11:03:01 Build your up-level network

Before every fundraising campaign, I highly recommend building your *up-level network*. If you are planning a pre-seed raise, find founders who recently raised it. If you are prepping for seed round, find founders who raised seed before. Same for round A.

Approach founders with some similarity (industry sector, demographics, business model) and ask for their advice (10-20 min call or text chat) for you prepping towards fundraising. Share you deck and/or target investor list in advance. Don't ask for investor names or intros yet. Just general fundraising planning advance.

Good questions to ask:
— What are the "hot trends" for venture investors I can attach our company to?
— What are the weak spots in my pitch to fix?
— What kind of investor will be most interested in our work?
— What are our stringest points from your opinion?

Once you've talked/chatted with 20-50 "up-level" founders, you can hit them all at once later, when you are ready to raise. You'll show them that you've addressed some of their feedback points. Now they can see your progress-making ability and will be more confident making intros for you. Open / Comment

2021-11-07 19:29:42 Template — Asking successful founders for investor leads

Hi, _Successful Founder X_. I am a founder of Y company. We do _one-line description_ and already _one-line best achievement_. See our deck and target investor list linked here.

I am new to fundraising and look for more investor leads in our space. Even the names alone will help, without warm intros. We specifically look for investors writing $XX-$XXXk checks and interested in _some keywords and trends_.

Would you be able to point me to some names? Or chat with me to give advice and vet me first, then (if you like what you hear) share 2-3 names who could be a fit for our round? Open / Comment

2021-11-06 12:57:01 How to use reminders

When you ask for help from other founders/connectors and when you follow up after ward intros to investors, frequently people don't respond. This isn't a sign of rejection. Everyone is super busy, traveling, balancing family and work, and could have potentially read your message right before losing connection, jumping on a plane, or doing some other task. The frequency of "dropping the ball" in fundraising is very high.

To counteract, you need to send everyone lots of reminders. I got my previous job (Entrepreneur in Residence at Entangled Group) after a warm intro and *four reminders* before getting a reply. Make your ask super simple, typically, just ask for an indication of interest and readiness to continue the conversation.

Here's a typical sequence of reminders you can use. Space them by 2-3 business days.

*Reminder 1 — Single line, ending in yes/no question*
Hi X — following up to the intro from Y. Would you have time to learn more about our round?

*Reminder 2 — New positive news, brief summary, yes/no question*
Hi X — this is Z from company A again. We do _company description_. Since Y has intro-ed us, we made serious progress on traction metrics N, M, P. The round is still open — would you have time to talk in the next few days?

*Reminder 3 — Last chance, yes/no question*
Hi X — Life is busy! This is my last email on company A after an intro from Y. Is there still a chance you might be interested to consider us for investment?

Generally speaking, once you have a warm intro, an initial indication of interest, or a promise of help, you can do 3-4 reminders until getting the next response. Open / Comment

2021-11-06 12:56:01 Fundraising readiness criteria

In general, readiness criteria may differ widely between investors. For the same project, one investor may say that it is "too early for seed" and another will be willing to lead the Round A. And yet, there are general patterns. Here's how I see it in simplified terms:

# Seed Round readiness
*1. Team credibility.* The team members have proven skills in key areas of the business. Most frequent requirements: specialized domain knowledge, tech skills, consumer growth, b2b sales.
*2. Demand signal.* Direct information from customers or prospective customers. Possible formats: waitlist, letters of intent, pilot contracts, early revenue. In many cases, the demand signal is acquired before product launch.
*3. Market story.* For large existing markets ($1B+ customer spending, $100M+ revenue current leader), a clever idea on how your new underresourced company will eat away market share from today's leading players. For emerging markets, an upcoming major market change that will create new customer needs and unlock previously impossible solutions.

# Round A readiness
*1. Usage volume.* For B2B companies, recurring revenue approaching or exceeding $1M ARR. For consumer companies, 100k MAU or more.
*2. Solution fit.* Strong retention and engagement for consumer companies, net negative churn and high renewal and referral rates for B2B products.
*3. Scalable distribution model.* Predictable, repeatable, and profitable way to acquire more customers and users. Open / Comment

2021-11-05 13:11:01 Should you share your deck with investors in advance?

1) Create a pre-meeting "package" to share. It can be a short deck, a list of bullet points, plain text summary in email, and/or a pre-recorded demo. This package should be enough to explain the basics of your business (idea description, current stage, location, current round), but not enough details to make the final judgement before talking to you.

2) Create a more comprehensive post-meeting package.This can include a longer deck, a text doc with frequently asked investor questions, team resumes, customer testimonials, metrics, roadmaps, etc.

Share the first package with intro-makers and investors before the meeting. Then, share the full package after the first meeting if/when the investor indicates interest in setting up a follow-up meeting. Open / Comment