angelpad session bb 10.6.11

How to build a traction narrative, pimp your AngelList profile, hustle on AngelList, and understand that fundraising is #&@* hard.

@brendanbaker

AngelPad – October 6, 2011

Brendan Baker

Not a founder (yet)

Shiny Ego Stuff

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*

Pimping Your AngelList Profile2

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Building a Traction Story1

Hustling with AngelList3Fundraising is $%*@ hard4

Our options

Building a Traction Story

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How do investors think?

1

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Momentum.

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Green is good.

Excitement > Hesitation

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Amplify and focus on the excitement points.

Surface and deal with the hesitation points.

Derisking.

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Risk

Progress

Can they build the product?

Will people use it?

Will people pay for it?

Will people come in mass?

Derisking often happens in steps.

These steps may vary for different startups.

Investors respond to a story.

Storyboard. Make the pieces fit together.

A story here means the takeaway message you want them to have, not something you’ll say directly.

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What is traction?2

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Traction is your story of momentum, told through

quantified evidence of market demand for your

product.

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“your story”

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Not told directly, but implied in examples of evidence.

Your traction is unique – use examples that are unique.

Don’t hide weaknesses, but frame them.

“quantified evidence”

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Profits

Revenues

Active users

Engagement

Customers/clients

Registered Users

Downloads

Partnerships

Traffic

Yes MaybeCohort progress

Engagement progressProduct velocity

NoPress

Testimonials

* This isn’t a set list. Use evidence that makes sense for you.

“Market demand”

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Dynamic > static.

Use evidence that describes momentum, and hints at market potential.

Graphs or growth numbers can work.

So the traction story should show the path

from product to market.

3

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Some examples

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Remember:

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The story is the implied message you want to send. It’s not something you’ll say directly.

Think of it this way: say you pitched an Associate at a VC firm. She liked you, and had a minute to describe your status and progress to a Partner. What would you want her to say?

That’s your target story. Tell it with traction.

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“They’re super early, but they build and learn fast. They’re worth betting on.”

story

traction

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“They’re creating a marketplace. That’s hard, but they know it. They knew they had to build the supply side first, and they

nailed it. Now they’re tackling the demand side. Early indications are good, and I think they know how to ramp it up.”

Launched in March 2011:- 25,000 vendors, with avg 25 items (growing 20-30%/month)- 11K uniques (growing 40%/month), with 3% conversion - avg purchase of $45 (growing 5%/month)- $120,000 revenue run rate (increasing 30%/month)- Just signed partnership with Yahoo! And ramping up ads.

story

traction

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“They’re accelerating their school by school rollout. The first schools are showing faster adoption than Facebook at their start, and are already

nearing local market saturation. They’ve started in the next set of schools, and adoption and engagement is even higher. They’re releasing faster than anyone I’ve ever seen, and it’s working.”

Launched 2 months ago in first school:- Downloaded by 80% of addressable population- Weekly actives: 55%- Feature requests: course sets, note sharing, daily deals V2

With V2, now ramping to 10 more schools in 3 months:- 3 launched to date- Each school population is downloading the app at a 15% faster rate- Engagement (photos shared, messages, etc) has increased 40%+ over V1

Currently building V3 with virality features, and planning to build street teams to reach the next 25 schools.

story

traction

Pimping your AngelList Profile.

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Your job is to capture their attention.

Don’t tell your life story. Focus on memorable highlights.

1

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You’re in a market for early stage funding.

Be unique.

Don’t take is personally.

Nobody cares about your problems.

2

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The best info, as concisely as possible.

Be focused.

Second draft = first draft – 25%.

Third draft = second draft – 25%.

3

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80/20: 80% what you’ve done, 20% where you’re going.

Investors will extrapolate your past success to predict your future progress. This is different in other pitching contexts.

4

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Evidence trumps potential.

Every time you call yourself a ‘visionary,’ a puppy dies. You’re not a gamechanger, seasoned professional, innovative, next

generation, or any other overused catchphrase.

5

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Conviction convinces.

Use present tense and strong wording.

Avoid weak shit like ‘we’re planning to…’

6

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Associate yourself with success.

Capture the gold dust from your investors, past employers or startups, customers, etc.

7

ASM: Always Show Momentum.

Venture investors invest in momentum.

Set expectations: ‘we’re still in private beta but…’

Use absolute and growth numbers.

8

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Geeks rule.

AngelList is a technical community. Broadcast your geeks.

9

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Give them something to touch right away.

Provide a demo with login details or failing that, screenshots. Don’t rely on a 2 minute demo video. Busy investors won’t

watch it.

10

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How to Hustle on AngelList

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Quick discussion around the ‘How to Hustle with AngelList in 12 Steps’ Quora post.

Fundraising is $#@* Hard.

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Quick discussion around Anatomy of Seed project.

Resources

How to Communicate Traction to Investors

How to Hustle with AngelList in 10 Steps

Anatomy of Seed: An Inside Look at a $1M Seed Round

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Thank you.

Thank you for building kick-ass companies.

@brendanbaker

Brendan Baker