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(4) Startups: How to Communicate Traction... by Brendan Baker

(4) Startups: How to Communicate Traction... by Brendan Baker
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. Here's what I've learned. Through thousands of pitches, I've found that fewer that 5% tell a great traction story. Here are 10 tips that can help. But first, let's get one thing straight - this is the only thing that matters to investors: Venture investors invest in momentum. (Here I'll bring in Alec Baldwin for a little help. . Here we go. 1) Compress your X Axis The X axis is how long you've been working. As an investor, who would you bet on? Consider these two messages, for the same consumer web product: "We started in 2008, and have 5000 users." Here, an investor's thinking: '5000 users/36 months = painfully slow growth.' More examples: OK.

Related:  Founding

What To Look For In A Company Board At any company level, the board of directors has a direct impact on the organization’s product strategy, hiring, fundraising and much more. And startups have to be very selective in choosing board members who will advise the company in the right direction. In the big company realm, both the media and the company’s shareholders have questioned Yahoo’s board, which continues to employ a floundering Carol Bartz as CEO and supports a bizarre product and business strategy. Then you look at Facebook, where founder Mark Zuckerberg has strategically assembled an all-star board to help the company grow as a public company and expand into new directions. Most recently, Facebook added Netflix co-founder and CEO Reed Hastings to its board, joining Marc Andreessen, Jim Breyer, Donald E.

Elements of a Strong Business Plan Napkin Think Force yourself to summarize your idea on the back of a cocktail napkin. Don’t submit your plan until you have this level of clarity. Best practices for raising a VC round Having raised a number of VC rounds personally and observed many more as an investor or friend, I’ve come to think there are a set of dominant best practices that entrepreneurs should follow. 1. Valuation: Come up with what minimum valuation you’d be happy with but never share that number with any investor. If the number is too low, you’ve set a low ceiling. If your number is too high, you scare people off.

4 essential ways to attract investors (Editor’s note: Doug Collom is vice dean and an adjunct lecturer on venture capital and entrepreneurship for Wharton | San Francisco. He submitted this story to VentureBeat.) There really isn’t a one-size-fits-all formula that can be followed for optimizing the chances of attracting professional investment. Each company is different and faces challenges and issues that can be overcome only through creativity, perseverance and resolve.There are, however, some elements that are so basic they cannot be ignored. Most institutional venture investors either expressly or intuitively address these requirements whenever they evaluate a business plan for a potential investment. Here are four to be especially aware of.

What should I send investors? Part 1: Elevator Pitch Nivi · November 2nd, 2007 “Summarize the company’s business on the back of a business card.” — Sequoia Capital Summary: An introduction captures an investor’s attention, but a great elevator pitch gets a meeting. The major components of the pitch are traction, product, and team. Waiting for the Accelerator Bubble to Pop Since Paul Graham launched Y Combinator in 2005, the field of startup incubators and accelerators has exploded in the U.S. and overseas, with new entries emerging in all manner of oddball shapes and sizes, from a 80,000-square-foot space in San Jose, Calif., dedicated to tech companies hoping to do business in China, to a program that offers entrepreneurs cash to develop their business in Chile. There are accelerators for green tech, health tech, ed tech, the cloud, and every other tech flavor du jour, and accelerators everywhere from Baton Rouge to Durham, N.H., as cities across the country lay claim to the title of the Silicon Valley of [insert industry here]. There’s Unreasonable at Sea, a 100-day program on an ocean liner, which encourages entrepreneurs to “combat the greatest challenges of our time” while sailing among ports in 13 countries. The result is that venture capitalists have begun to predict that accelerators are going to fail. There are already signs of paring back.

The Top 10 VC Firms, According To InvestorRank Any seasoned investor knows that past performance is not indicative of future returns. That is as true with public stocks as it is with venture capital firms. But if someone were to ask you to rank the top VC firms today based on their probability of success, how would you do it? Remember, looking at past returns won’t help you. 365 Days, $10 Million, 3 Rounds, 2 Companies, All With 5 Magic Slides Editor’s note: The following is a guest post by Socialcast founder Tim Young detailing how he raised 3 rounds totaling $10M in VC money in a year’s time with a 5-slide deck. This was originally published at “Knowledge Is Social.” “I have a short five-slide deck to share that provides a solid framework for understanding our business.” Since moving to San Francisco a little over a year ago, I have spent every day helping to build Socialcast and