5 Way to Get Investors Interested

We're about half way done with this year's Techstars Seattle class and Demo Day is inching closer and closer. It's the time in the program where companies start to think very seriously about their investor strategy. It goes with out saying that teams are all over the board when it comes to raising money. Some nearly have their rounds complete, while some have just started thinking about how to raise money. I always get asked "How do I go about raising money?" by startups. We'll here are a couple of tips: 

1. Be relentlessly resourceful. I may have stolen this tagline from Chris Devore, but that's only because it's just that good. Basically, don't take no for an answer. Don't accost potential investors, but think of work arounds if one stream runs dry. 

2. Personal introductions save lives. If you can get an intro to a potential investor from someone they know and respect, that is great. If you can get a couple of intros to the same investor, you're even more golden. 

3. Investors think of reasons NOT to invest in your company. Focus on what are the perceived weaknesses of you, your team, and your idea and figure out ways to mitigate the investor's fears. 

4. Know when to sell and know when to explain. Speaking with investors is very tricky. You have to know when to push and when to play it cool and just explain your business. Most investors will not see your vision right away, so if you're hard selling it to them, you've lost them. Don't lose them. Thanks to @avinci for these last two.

5. HUSTLE. No one will throw money at you. Well, at least not in your current profession. 

With that. Happy money raising!

-Andy

 

7 Tips for Great Investor Pitches

What makes a good pitch? It's no secret that entrepreneurs must perfect the art and skill of pitching their idea to friends, family, investors, employees, and anyone who will listen. We're in the midst of our first round of pitch practice this year at Techstars and the teams are off to a really great start. Honestly, I'm pleasantly surprised by how they are pitching right out of the gate. Below are a few tips that I have laid out for pitches. 

1. Treat it like a sandwich. Tell them what you're going to tell them (bread), tell them (the meat, veggies, cheese, & condiments), and finally tell them what you just told them (bread). It sounds simple, but that's the point!

2. Don't have too much text on a slide and keep slides to one idea. This may seem obvious, but you'd be surprised by how many entrepreneurs forget this and deliver slides with grad school level outlines on them. 

3. Have ONE pitch for everyone. Yes, tone it down a bit for your grandmother, but be sure to keep the ideas and specifics constant between mentors, investors, etc. Entrepreneurship is a small world and you don't want to have to put your foot in your mouth because your story isn't consistent. 

4. Have some badass slides. Check out Haiku Deck for help with this. 

5. Tell a GREAT story and connect with the audience emotionally. The most memorable pitches are the ones that make the audience feel. Figure out a way to do this. 

6. KISS: Keep It Simple Stupid. Don't over do it! If there are technical questions, they will be asked. Worry about telling a great story in a great way and you can deal with specifics after the audience pick their jaws up from the floor. 

With that, happy pitching!

Andy 

 

It's time to build something!

For this post I wanted to mirror what we’re currently working on at Techstars. Teams have spent the last month of the program validating and in some cases changing their idea with many customer interviews. You may think that you have an amazing idea that will solve a huge pain until you dig a little deeper and realize there is no pain or the pain is somewhere else. That’s OK. That’s what customer development is for.

Now we’re at the point in the program where it’s time to focus less on customer development (never forget about it though) and begin actually honing a product that some of the potential customers you’ve spoken with may actually buy and building a company that investors will want a piece of. Just like how investors look for dots of data that form lines, you should look for dots of data within your customer interviews that point to key features that they want. These nuggets of information are vitally important to what your product become and what features it will include.

We have teams at all kinds of different stages in the program right now. Some have viable products with customers signed, while some have little more than a well flushed out and validated idea with some wire mock-ups to boot. All of these teams have connected the dots they formed via customer interviews. Now it’s just time to build something. With that, happy building!

-Andy

 

Dinner and a Movie: How to Prevent a Team Breakup

As I mentioned in my last post, I am going to try to make the topic of team issues a blogging topic of mine. This post concerns how to prevent a team break up. A great way to get founder issues and insecurities out in the open and in turn prevent founder breakups is to conduct a founder exercise I call “going to the movies.” 

The idea behind the exercise is to tell the worst possible "nightmare" of the founding of the company gone wrong. An example illustrates the founder exercise -- imagine a date with the opposite sex.  "going to the movies" involves imagining the story of things started to go badly and then becoming a date from hell.  Imagine,  what is the worst possible thing that could happen? Does the date throw their drink in your face because you picked the wrong movie? Do they chew overly buttered popcorn with their open and you storm out of the theatre? Do you lean in for a kiss and get slapped in the face?

You get the idea. Go through this exercise with your co-founders and discuss each other’s fears and limitations in the realm of the worst possible thing that could happen to your company. It’s a great way to get everyone’s issues out in the open early in a company’s history and prevent breakups down the road.

 

When a team breaks up

Breakups are part of the process of building a company. I’m writing this post because we had our first team break up this year at Techstars Seattle. The team is still around and working on their idea, a really promising one, but with ⅓ less manpower. Oh, and the team member they lost was their only developer.

The decision was hard. Basically, 2 of the 3 members were really invested in the success of the company, and the final member was not, so it was time for him to go. Emotion was obviously present, but all three parties were professional and will remain friends. We deal with this openly here at Techstars. The decision was announced at our retreat last week. My reasoning for this transparency is that there is no need to create gossip or wonder in the Techstars ecosystem. Techstars is club and a network. Yes, there is a certain amount of competition, but as a whole, everyone is here to work their asses off and collaborate with others in the program. I’ve found that the more transparency there is in an organization, the better. Just ask Rand Fishkin, CEO of Moz, about this.

So, with that I sign off and urge you to focus on meaningful transparency in your office. It can take care of small hiccups before they become larger issues. More to come on this topic and the topic of maintaining your company in futures posts.

-Andy

 

Mentorship Post Round 2

As I mentioned a few posts ago, I’m trying to make mentorship a focus of my blogging during the 2013 Techstars program. Mentorship is the glue that holds the whole program together, so it is vitally important that the teams get the most out of their relationships with mentors. Mentors act as advisors, advocates, therapists, and can be great connections to investors or may even be investors themselves. A brief update on mentorship so far: Those teams who I have checked in with have found the mentorship very helpful. This is true for both teams with well developed products and visions as well as teams who are still trying to figure out what they are doing.

A large commonality between the teams pointed to the mentors being great for getting feedback on their basic idea and approach. This was helpful because it gave the teams a confidence boost that they are heading in the right direction (or conversely, a united front that they were not, but ideas regarding where to go).

Teams also felt that there is only so much talking one can do before they need to do some actual work. A lot like a freshman year humanities class beating a passage to death, one needs to start “doing” to eventually create something. That is where we are now. Until next time.

-Andy

Techstars Seattle Retreat 2013!

On Wednesday, we had our Techstars 2013 retreat at Big Door CEO Keith Smith’s cabin in Easton, Washington. In line with the Techstars mantra of Do More Faster, the purpose of the retreat is to hurry up the process of getting to know one another in the program. We figured that a Summer camp style overnight complete with a rather chilly lake, a motorcycle ride, a propane flame thrower, BBQ’d bacon, and a fair amount of beer was the best way to accomplish this.

Emphasis was placed on chatting with those in the group with whom you had not yet gotten to know. With every new group activity, you had to sit with people you had not met yet. Activities focussed on what you wanted to get out of Techstars and how you think it will help your career.

We held a funding panel with myself, Greg Gottesman, of Madrona Venture Group, and Big Door’s Keith Smith. The panel was an open forum for anyone to ask questions about funding, financing, and how to raise a round. It was great to level set on this often intimidating part of the company building process. Hearing the more formal points from Greg was valuable as teams begin to raise beyond their seed rounds. Keith also shared the painful lesson he learned by not selling his first company when he should have.

The weather was a little damp but we prevailed. I think that the retreat helped us to get closer as a group and has set the tone for the Techstars 2013 class. A big thank you to everyone who helped organize the retreat and to Keith Smith for the use of his awesome cabin.

-Andy

 

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Techstars Seattle does Crossfit and is humbled/ Pained in the Process

This past week accounted for many firsts for the Techstars Seattle 2013 Class. It was the first week of the program, the first time the founders got a taste for how we do things here at Techstars, and the first time many of them had ever done Crossfit. I've been doing Crossfit off and on for about a year now and cannot help but see the similarities between the workout regimen and entrepreneurship. 

Both Crossfit and entrepreneurship are really, really hard AND the payoff can be enormous. To be successful, you need to take responsibility for your actions and be diligent with your execution. Issues and weaknesses will be brought to the surface and must be dealt with in order to move on to the next challenge and get closer to your respective goal. 

The process of starting a company, just like the process of getting in shape, is incredibly personal and humbling. You quickly can make great strides one day, and then spend the next few months focusing on some small aspect of your success. I'm looking forward to getting in shape along with my fellow Techstars at Crossfit SLU over the next few months. We'll keep you updated on how it goes. 

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Mentor Speed Dating Madness

Tuesday night we had our mentor mixer to officially kick off the 2013 Techstars Seattle class. The mentor mixer is a meet and greet between the mentors and the founders of the Techstars companies. Last year we held a free-for-all cocktail hour where teams and mentors were supposed to meet each other and figure out who they wanted to work with. It didn't work very well, so this year we switched things up and set up a mentor speed dating session. It went as follows:

Mentors were set up in stations through out the building with a bottle of booze, some mixers, and ice. We had the teams rotate from station to station every six minutes and speak with the mentors during that time. There was a ton jammed into a short amount of time. The teams had to pitch their business to the mentors and the mentors had to get a feel for the teams and their ideas during this six minutes. This went on for about an hour and half. It was crazy, but in the end, everyone seemed to feel like they got a fair shake of the mentors and the teams. Afterwords everyone descended into talking over each other in The Easy. We were told that this way of doing things was better than last year but that more time would have been appreciated. I respectfully respond to those critiques the the Techstars mantra of Do More Faster!!!!

A huge thank you to the mentors, the teams, and everyone who helped make the mentor mixer a great success! It's going to be a great class!

-Andy

An example of the stations where teams and mentors chatted

An example of the stations where teams and mentors chatted

What’s in a Mentor? Well, nothing but one of the most important relationships your company will have.

As Shawn Carolan, a VC with Menlo Partners says, “Startups don’t starve, they drown.” This is in respect to the often overwhelming amount of help, advice, and mentorship startups are graced with by friends, family, investors, and people who simply want them to succeed. It all comes from a good place, there is no denying that. People always want to help startups because startups are cool. They are often conceived and run by cool people who other people want to see succeed.

Kevin Dewalt, an EIR at the NSF wrote a great blog post on the topic of mentorship in start ups, and more specifically, the dos and don’ts of this type of relationship. He goes over many of the common types of “help” mentors provide to startups that are not that helpful at all. Brainstorming and distraction being among the most common things that can hinder an entrepreneur. This is because the vast majority of startups have all of the ideas that they could possibly ever come up with and their task is to trim their long list down to a few that they can do very very well. Another common area of misguided mentorship comes in the form of mentors raising potential problems and interactions rooted in potential success. This manifests itself in the form of mentors asking how a company will interact with Facebook, or Twitter, or any other big name service before the little company even has its idea halfway thought out. These questions will be answered when, and if a company makes it, but in the meantime they just freak the fledgling company out. There’s no use freaking out over something that doesn’t exist yet.

-Andy

 

The Mentor Dating Game...speed dating for TechStar founders

When asked by Sam Solomon, what makes Techstars different than other accelerators like 500 Startups and Y-Combinator, Techstars Associate and Startup Exchange co-founder Aswin Natarajan harped on the intense mentorship Techstars entrepreneurs receive as part of the program. Aswin is correct, it is the deep level of mentorship afforded to our founders and the ever-growing network that they become a part of that draws entrepreneurs to Techstars. However, like anything else in life or business, not all offers to help are welcome or all that helpful.

This first post is a brief one about the mentor/ mentee “dating game:” the process of matching up founders with the mentors who they will hopefully click with and who will help them succeed. This all sounds easy enough, but in reality it is more of an organic art than a real science. Yes, there are obvious dos and don’ts, like matching up a social travel company up with a social travel mentor, but beyond that, it’s anyone’s guess who gels with who. As Brad Keywell says of his longtime mentor Sam Zell: “You’ll know a mentor when you see one”. There is someone out there who will come into your life while you’re busy pursuing your passion. He or she will see the spark in your eyes and affirm your vision — while also challenging you in ways you never considered. Your mentor will care about you enough to give you the ultimate gift: brutal honesty. They will want what’s best for you, with no hidden agenda or bias.”

Here at Techstars we used to simply assign mentors to teams after a big meet and greet and hope that the rest would figure out itself. That worked alright enough, but this year we’re trying something a bit different. We’re calling it “Mentor Speed Dating” and basically it will consist of mentors being stationed at tables around our space and the teams rotating through the mentors and chatting for 15 minutes before moving on the next mentor. After the speed dating, we’re going to have each company and each mentor select a few mentors or companies with whom they clicked. From there, we’re betting that the rest will figure itself out as Brad Keywell mentioned above -- and trust that Techstars founders will know a mentor when they see one :-) We’ll keep you posted on how it goes!

-Andy

Sam Solomon video: http://www.youtube.com/watch?v=vU4KalBO1EA

Brad Keywell article: http://blogs.wsj.com/accelerators/2013/05/23/brad-keywell-you-know-one-when-you-see-one/ 

 

 

The Top Three Reasons Mentorship is Important to Entrepreneurs

1. Top 3 reasons that mentorship is important to 

entrepreneurs? 
* Growing a company is complex and having input from smart people who have had similar experience is super useful.
* It helps entrepreneurs see the forest through the trees 
* Entrepreneurship is about execution.  Having folks guide you through the process of starting and scaling a company is invaluable.

2. Top 3 qualities a good mentor should have? 
* The mentor should know that they are mentoring and not running the company.
* The mentor should be able to listen for core problems.
* Give simple advice even to complex situations and problems. 

3. Who should be a mentor?

Expert, C level of an exited company, domain experts.

4. Why you should mentor? 
Giving back to entrepreneurs is the most valuable thing you can do. It's why moms help moms with child birth.... because moms know how hard it is and how important it is to have support to get through some of the challenging times. The same is true with entrepreneurship.

Making the Call to Pick the 11 Techstars Teams

On one hand it is a great day, you get to call up 10 CEOs and share the good news and make their day. There is nothing that can replace the excitement roaring through the phone of how happy they are, “I wish you could see my face right now! OMG! We are so stoked! We won’t let you down! So excited to be a part of Techstars Seattle!”.

On the other hand, I have to tell the others that were right on the cusp, that they were so close but did not make the cut. This is harder than you might expect because you have spent a lot of time getting to know these people and have built up relationships with them. You follow them, and their progress over the selection cycle, staying on top of updates, and cheering when the the team hits a milestone or breakthrough.  It bothers my heart every time having to turn away the teams that were so close. In the end, I’m still rooting for them and try to support them the best way I can.  I want these teams to know that although they didn’t make it into Techstars this year that it is not a vote against their company and  I encourage them to keep pressing forward, and to stay in touch. From past experiences, I know that many companies will apply to Techstars multiple times before eventually being accepted, and many companies will go on to be wildly successful without Techstars.

The selection process is far from an exact science. In the end it really is a gut check. Of course we weigh in product and market, but Techstars always starts and ends with the team, that’s what we bet on when we say yes.

However, as I mentioned this year we had an exceptional number of high-quality applications, and when faced with that final decision, I couldn’t take just 10. So this is the first year Techstars Seattle has decided to invite 11 companies to join us in August.  I’m feeling really optimistic about this group of 11 outstanding teams, and can’t wait to announce the 2013 class to you all next month. Techstars Seattle kicks off on Aug. 5! Also don’t forget to mark your calendars for Thur. Oct. 24 TechStars Seattle Demo Day, you won’t want to miss it!

Onward!

Andy

 

Narrowing Down the Techstars Field

Going into year 4 of Techstars Seattle one would think that the selection process would get easier.  That’s not the case! The truth is the selection process is never easy, and every year we are faced with hard decisions. The past three years have been super competitive and this year (2013) was no different.

So what’s the selection process like and what makes it so difficult? The process begins with many hundreds of submitted applications, which we have to screen and sift through to get down to the top 10%. That first filtering isn’t actually the tough part of the process, the tough part is when you get to the top 10% and have to decide which teams you are going to invite for an interview.  When you get to the interview, the whole process becomes more complex and emotions come into play. The applicants are no longer just videos of people sitting under a tree with a guitar singing a jingle about why you should let them into Techstars, or of a demo video of their slick product. Now, the application is a team of ambitious individuals sitting across the table from you, staring you straight in the eyes, palms sweating, pitching hard as to why they should be accepted to Techstars with a finite amount of time in front of you.

This is where process gets so hard that it can keep you up at night hard. We have met over forty teams and need to pick ten. We have a selection committee that we pulled together with a diverse group of individuals. Everyone has an opinion. Everyone has their front runner they are rooting for and want in that batch of 10, and everyone has a team they love and a team they don’t love. Dealing with all this can be draining.

Eventually after long discussions, follow-up phone calls with CEOs, rewatching videos, assessing product/market fit and a bunch of other factors weighed in, we make a final decision. This is the point of the selection process I simultaneously love and hate, making the phone calls.

Until next time,

Andy

 

TechStars Seattle deadline is TODAY!

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As many of you probably already know today is the deadline to submit an application to TechStars Seattle! So far we have had some amazing teams apply, and I'm really impressed by the quality of applications we have received. 

I already know I'm going to have a tough time making a final decision with the teams this year! It's going to be a long weekend sorting through these apps!

For those interested in applying you have until midnight tonight May 31 to apply! What are you waiting for? Apply now to give your startup an unfair advantage!

 

First women-only Code Fellows bootcamp this summer

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This has been a big week for Code Fellows!

We announced that we are holding Code Fellow’s first women-only course this summer! The bootcamp is design to help create a learning environment that appeals to women to help narrow the gender gap in tech jobs. We want to see more women in tech, period. There is no doubt this is a field dominated by men, and we want to help change that by training more women to take up the coding trade. This will be a course designed for women-only and run from July 8-28, 2013 for the introductory course and August 5-23, 2013 for the more advanced bootcamp.

Below is some media coverage on the women-only bootcamp that we received this week:

GeekWire - "Attention lady hackers: Code Fellows debuts women-only bootcamp, guarantees $60K salary"

TechFlash / PSBJ - "Is Seattle becoming the place for women who code? CodeFellows says yes"

The Daily Journal of Commerce - "Bootcamp for women to learn coding skills"

I’m also excited to tell you all that we kicked off our 2nd bootcamp; we have a bunch of fresh faces that are participating in the Ruby on Rails Silver beginner’s course. This is a 4-week course, followed by the Ruby on Rails Gold course for intermediate students. We made some changes from our first class, and have decided to run this second rails course with a Silver and Gold model breaking up the classes by skill level. I’m excited to see how this class goes.... and grows. Developing more great engineers every day!

 

March for Innovation

TechStars is joining the Partnership for a New American Economy for the March for Innovation (#iMarch), which will bring together leaders from the technology and startup communities in a digital march for smart, comprehensive immigration reform. This includes a new visa for entrepreneurs, additional visas for high-skilled immigrants and permanent residency for graduates in science, technology, engineering and mathematics.

Immigration reform is a central issue for the tech and startup communities. Talented entrepreneurs from around the world continue to play key roles in many new companies, and their impact is clear:

  • More than 40% of Fortune 500 companies founded by immigrants or their children
  • 28% of all companies started in the US in 2011 had immigrant founders
  • More than 1/4 of tech companies report having difficulties hiring talent and number of Americans studying in STEM fields grows by less than 1% per year

I hope you'll join the push for immigration reform and get involved with the March for Innovation. You can help by:

  • Share the #iMarch with your networks. Click here for some great content you can share with your networks!
  • Host an event in your city. The #iMarch will take place on May 22nd and 23rd, and many incubators and accelerators are hosting events that evening. If you're interested, please reach out to aaron@aviatormedia.com who can provide support on planning a discussion, coordinating logistics and connecting with other local partners and resources.