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If this is your first time reading, I recommend you start with my 6-month challengeweek #1 choosing an idea and market validationweek #2 talking to others, building an MVP and focusing on value vs. growth and monetization and week #3 narrowing focus further, learning about gluten free, social shopping and eating experiments.

tl;dr This week has mostly been spent collecting gluten-free menu information from restaurants in San Francisco, talking with advisors on next steps and prepping for pitch practice for Greylock Partners this past Friday. I hope to start some preliminary user testing next week.

The focus of this post will probably be more on how to pitch angel investors — since Cusoy is so early stage — and lessons learned from my experience at Greylock.

I. Building out my MVP
II. Talking to advisors
III. How to pitch angel investors for seed funding
IV. Greylock Partners office hours
V. Next week and lessons learned

How do you seem like you’ll be one of the big successes? You need three things: formidable founders, a promising market, and (usually) some evidence of success so far.

The time to raise money is not when you need it, or when you reach some artificial deadline like a Demo Day. It’s when you can convince investors, and not before.

– Paul Graham, How to Convince Investors


I. BUILDING OUT MY MVP

With a basic technical framework in place, I have been doing a lot of data mining from various sources to collect gluten-free menu information and recommendations from restaurants in San Francisco.

Good thing for me that San Francisco is the “foodiest” city in the country, with the most restaurants per capita than anywhere else in the U.S: “At 39.3 restaurants per 10,000 households, San Francisco has nearly 50 percent more relative restaurants than the second place city.”

Nothing too exciting here — still working on my MVP and also trying to squeeze in some time to learn Ruby on Rails soon.

II. TALKING TO ADVISORS

I’ve also been reaching out informally to some friends, either other entrepreneurs or tech startups in a similar space, to get their feedback on what I’ve been doing. However, unless they are gluten free or have dietary restrictions themselves (they did not), I had to remind myself that my targeted user’s feedback was more important, but some guided assistance from them was also helpful.

Some interesting ideas that they suggested in terms of growth hacking and marketing:

  • Building an email marketing list a la Lean Startup
  • Google AdWords
  • Facebook ads
  • A/B testing Cusoy’s landing page

Some of these things I will start experimenting with – and maybe do a comparison of my previous experience with Google AdWords as well.

A lot of advice right now has still been to finalize my MVP and ship it to users as soon as possible and iterate on feedback. It’s been a “bottleneck,” so to speak, to the other things I can do. But I’m really glad to have still some feedback from informal advisors — and I hope to reach out to more this week, as well as continue going to Rock Health office hours, for a measure of accountability, support and motivation.

III. HOW TO PITCH ANGEL INVESTORS FOR SEED FUNDING

The most important ingredient is formidable founders. Most investors decide in the first few minutes whether you seem like a winner or a loser, and once their opinion is set it’s hard to change. Every startup has reasons both to invest and not to invest. If investors think you’re a winner they focus on the former, and if not they focus on the latter. For example, it might be a rich market, but with a slow sales cycle. If investors are impressed with you as founders, they say they want to invest because it’s a rich market, and if not, they say they can’t invest because of the slow sales cycle.

– Paul Graham, How to Convince Investors

Keep in mind that depending on what stage you’re in, your pitch may sound entirely different and have different focus — for example, pitching for a Series C round is very different than pitching for a seed round. Investors will look for different things depending on where you currently are with your startup.

In my particular case, I would be looking for seed funding from angel investors.

In preparing for Greylock Partners office hours, here are the people whose advice I’ve found most helpful for me:

  • Paul Graham (YCombinator)
  • Dave McClure (500 Startups)
  • Mark Suster (Upfront Ventures)
  • Brendan Baker (Greylock Partners, AngelList)

a) Paul Graham (YCombinator)

If you haven’t already, do yourself a favor and read his recent essay How to Convince Investors.

My takeaways:

  • Three ingredients for pitching success: 1) formidable founders, 2) a promising market and 3) (usually) some evidence of success so far
  • The most important factor are formidable founders: “A formidable person is one who seems like they’ll get what they want, regardless of whatever obstacles are in the way. Formidable is close to confident, except that someone could be confident and mistaken. Formidable is roughly justifiably confident.”
  • The secret is to thoroughly convince yourself that your startup is worth investing in and then simply relay that truth to investors. Be honest with yourself. If you’re not convinced yourself, how can you convince others? If you’re not convinced, don’t try to raise money.
  • Be a domain expert and know everything about your market – this is part of the process of convincing yourself your startup is worthy of investment.
  • The time to raise money is when you are able to convince investors.
  • Interesting: startup founders think of startups as ideas, investors think of them as markets.
  • Identify some sort of current trend about your target market – ask yourself: “Why now?”

Bottom line:

So here’s the recipe for impressing investors when you’re not already good at seeming formidable:

1. Make something worth investing in.

2. Understand why it’s worth investing in.

3. Explain that clearly to investors.

If you’re saying something you know is true, you’ll seem confident when you’re saying it. Conversely, never let pitching draw you into bullshitting. As long as you stay on the territory of truth, you’re strong. Make the truth good, then just tell it.

– Paul Graham, How to Convince Investors

b) Dave McClure (500 Startups)

How to Pitch a VC

 

Zapmeals: Sample Startup Pitch Deck

 

Beating The Series A Crunch

Note: This was mostly educational for me in understanding how to frame myself in an investor’s mind and the different factors of Cusoy’s investment stage. Accordingly, the embed below starts the presentation at slide 13.

 

c) Mark Suster (Upfront Ventures)

Here is a comprehensive list of Mark’s advice on pitching VC’s: Raising Venture Capital. Too many posts to list here — might as well read through any and all of the ones that apply to you and are of interest.

Excellent advice, especially given Mark’s background from both side of the table — both as an entrepreneur previously himself and now a venture capitalist.

d) Brendan Baker (Greylock Partners, AngelList)

Brendan comes from a very story-focused approach of pitching investors. Something I absolutely agree with and value, given his background with AngelList.

To give you an idea of his background and experience:

In the last year I’ve seen thousands of startup pitches while working with the AngelList crew, coached 100+ founders on how to communicate their product, traction and team, and worked with startups in fine institutions like 500 Startups, AngelPad and Bootup. I’ve also dissected 500+ emails from a recent seed round fundraising to map investor response.

– Brendan Baker, 2010 Quora post

(He was also one of the people I met at Greylock last week!)

Here is a list of all his Quora posts.

Some posts of particular interest:

Pitch Patterns
Including step-by-step instructions for title, story, product progress, problem statement, solution statement, product, market, how it works, team, competition, positioning and traction slides.

Pitching VCs: 10 Ultra Beginner Mistakes to Avoid
These weren’t issues for me, but this is great for beginners on things not to do.

Startups: How to Communicate Traction to Investors
This is not immediately applicable to myself but I will find it very helpful in the near future once (hopefully) Cusoy gains traction!

Startups: How to Storyboard your Pitch Deck in 10 Steps
I really like his story-focused approach and completely agree you should weave a narrative around your pitch.

Pitch Prep: Playing the Excitement Game
“Maximize the excitement points and minimize the hesitation points.” More on this in the next section.

And another from his Tumblr:

Derisking Buckets: How to identify and deal with investor hesitations
Great investor perspective when evaluating your pitch deck and overall pitch. What are investors thinking about? How do you pre-emptively address their concerns and de-risk buckets?

IV. GREYLOCK PARTNERS OFFICE HOURS

Back story and context

Wow, so this was an amazing opportunity I stumbled across last week: the chance to pitch Cusoy in front of two people at Greylock Partners and receive personalized feedback. All for free, without the hassle of reaching out through personal connections or cold emails.

This was the first time Greylock has ever held open office hours.

If you guys aren’t familiar with Greylock Partners, they are a top Silicon Valley VC firm. Some famous companies they’ve invested in include Airbnb, Dropbox, Facebook, Instagram, LinkedIn, Pandora, Path, Tumblr and Zipcar.

I follow Josh Elman on Twitter (who recently got promoted to Partner at Greylock Partners) and he retweeted Brendan Baker that they were holding open office hours at Greylock for pitch practice. Prior to Josh’s tweet, I had no idea who Brendan was. Also, I hadn’t directly met Josh before, but I went to the product conference this past April where he and Greylock co-hosted with Samsung moderated discussions with different product people and companies.

There were six spots open last Friday. You had to apply for a spot and include your AngelList profile as well as some information on your startup (website, etc).

At first, I panicked because I read Josh’s retweet two hours after Brendan tweeted it, so I was scared a lot of people had already signed up and there wouldn’t be any spots left. I hurriedly applied two Thursdays ago and hoped and prayed I’d be chosen.

It wasn’t until this past Monday that I got an email confirmation in my inbox from Brendan. It made me jolt up in my seat.

Interestingly, for all my worry and concern about missing this opportunity, I was the first confirmation — the other five would come much later that day.

Preparing for pitches

The format was 10 min reserved for pitching (8 min was preferable, and 5 min the best) and the remaining 10 min for pitch feedback.

To prepare, I spent hours reading the various resources I included above, as well as a lot of other not-so-good resources on pitching — everyone has an opinion, it seems — but the ones posted here had the highest value for me.

Interestingly, I thought it would have been hard to fill up 10 min (this was before I finished creating my pitch deck) — once that was done, it was actually hard to cut down from 10 min to 8 min and the hardest to get it to 5 min, even if it meant glossing over some details.

Listening to others

I was the fourth person to present, but participants were allowed to sit in and watch others pitch and hear pitch feedback from Josh and Brendan, and I arrived at the start so I could listen in on all the pitches.

To be honest, I was quite intimidated when I sat in on the first pitch. The presenter and her team already secured $450,000 in funding, had the most rock solid team (interestingly, had some people’s names who I recognized from a long time ago), extensive domain expertise, awesome early traction, etc. I was really excited and impressed by her and her team’s potential and progress… and was alarmed at how my pitch paled in comparison.

In fact, every other team seemed to have either have seed funding — from $100,000 to $450,000 to $1 million secured already — and/or a solid team assembled, traction, etc already. Whereas, here I was, just a budding product manager who has an idea with a working MVP demo and have only been working on it for the past four weeks.

Of all the pitches, I was personally excited by two of them (first mover advantages, great domain expertise, rock solid teams, great traction etc), somewhat interested in another (a technical startup whose premise somewhat went over my head), and a little dismissive of the last two (saturated space and/or I wasn’t persuaded by the “need” for these startups). It was very interesting to sit back and listen to the other pitches and play a little pretend VC myself and see if my private thoughts and feedback for each pitch and team mirrored that of Josh and Brendan’s feedback.

One of my takeaways from this and Josh and Brendan’s feedback in terms of pitch feedback was that there is no one-size-fits-all format for everyone and every team’s pitch deck. It sounds like common sense, but it really depends on your startup idea and various other factors whether or not to put your team slide in the front or the back and other details like that.

Greylock’s feedback for me

Excite investors with my background and career trajectory so far
Surprisingly, they were most excited by me — by my background. How I worked at three top, high-signal companies: Square, RetailMeNot and Evernote — and I’m just a recent college grad (graduated last December 2012). Not to mention working in product management. I’ve gotten a lot done in such a short amount of time and worked with several top-notch and highly respected tech companies, all pre-IPO (except RetailMeNot, which recently IPO’d!) and $280+ million funded.

When Josh left the room for a moment, Brendan told me and the group that Josh was particularly excited by my background, coming from Evernote, and didn’t want to miss my pitch. They were all very impressed with my career trajectory and companies I’ve worked for in the past. (This made me more stressed out, uncomfortable and nervous, ha!)

I shouldn’t sell myself short. After all, I actually got all those internships/jobs through personal networking and actually was Evernote’s first associate product manager. When interviewing with Square, I did so much preparation beforehand that Square actually offered me the sales/marketing internship mid-way through my first round interview. With RetailMeNot, the previous product management intern was a Stanford CS and MBA background — to give you an idea of my competition and their standards — compared to my Rice econ background. With Evernote, I reached out to them cold late last year and pitched myself successfully; they created their first associate product manager position for me. (This doesn’t begin to include how I hustled my way into investment banking before I decided to transition to tech!)

Very few people know the exact details of my job history above… nor did I mention any of that during my pitch, as I get embarrassed about tooting my own horn, but I will try to weave that in to excite investors of my background and past hustling. I mean, if anyone can make a startup work out, it’s someone like me given my background, right? 😉 Hahaha.

At this stage, I need to play up my background much more than I did and stop being apologetic about how early stage Cusoy is or how it is super niche for gluten free (for now).

I also need to be more confident in myself when pitching — admittedly, I was not only intimidated by other pitches and their progress so far, but I also had scrambled to put together a pitch deck in a matter of a couple days and did not do as much practice as I would’ve liked in actually pitching. This was actually my first official experience in pitching investors.

Excite investors with big market potential opportunities
I also needed to place market sizing and the “why now?” slide in the front to get them excited at the big opportunities for Cusoy — they initially got turned off once I said gluten free niche because they thought it was a very limited and small opportunity. Only after I went over the market slide, near the very end, did their ears perk up and got excited.

Reminds me of PG’s words — I think of Cusoy as an idea, but investors think of your startup as markets. I am still finding product/market fit right now, but I am more and more cognizant that if/when I do pitch investors, barring exciting traction numbers, I need to have a solid business model for how and why investors will make money from investing in Cusoy.

Overall experience

I’m super glad I went. I honestly had some doubts and had even seriously considered several days before the pitch practice to cancel, simply because I thought I just wasn’t ready and didn’t want to waste their time with Cusoy, which is super early stage right now.

V. NEXT WEEK AND LESSONS LEARNED

So next week will be focused on finishing my MVP, continuing to interview restaurants and collect information, continue to talk to advisors and most importantly, hoping to start user testing this week.

Key lessons learned:

  • Be confident in yourself when pitching. If you can’t convince yourself, how can you convince investors?
  • Emphasize myself as a formidable founder.
  • Ship your MVP as soon as possible. Get feedback from users. Keep moving. Don’t stop or slow down.

 

P.S. I’d love to meet you on Twitter here.

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7 thoughts on “Week #4 – Building out my MVP, talking to advisors, learning how to pitch VC’s and pitching Greylock

  1. Hi Melissa.
    First of all, Let me congratulate you. THIS IS FANTASTIC READ !!!
    I have seen many people writing about their experiences and iterating the UPs and DOWNs they went through to illustrate the fact about what they achieve and i appreciate that. Your journey not being exception, but fantastic and rejuvenating and still way more go for many more adrenaline stimulating moments. I wish you all the best for your endeavors wish for your success.

    Startups are exciting, Have fun !!!


    Vaibhav

  2. Great post Melissa! Thanks for sharing bits of your intern and startup adventures. It was so great having you at RetailMeNot, I’ll keep my eyes on your blog and Cusoy.

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