SPEAKER_00: Hey, everybody, welcome to this week in startups. It's episode nine of our startup checklist. And this is the one you've been waiting for. You've got your startup really tight, you figured out your product, you know, your market, you got your team, you got your culture, everything's just dialed in and you want to raise money. So today we're going to talk about how to raise capital finding investors, figuring out if they're the right fit for you, how to nail that cold intro and how to pitch your startup perfectly, so that you don't frustrate investors and they understand what you do, why it's important, why they should invest and you get that second or third meeting. We also talk about sending investor updates, which makes raising more money easier in the future. But first, we're just announced a new privacy policy revision, it's super confusing, I'm going to break it down for you. And then we're bringing back our tweet of the day. And this is an archive video of David Letterman

SPEAKER_01: interviewing Bill Gates in 1995 about this new thing called the internet, stick with us, it's going to be a great show.

SPEAKER_02: This Week in Startups is brought to you by LinkedIn Marketing. To redeem a $100 LinkedIn ad credit and launch your first campaign, go to linkedin.com checklist. Vanta compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a sock to report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. And Odoo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever. And right now Odoo is offering $1,000 off your first implementation pack at odoo.com slash twist. That's odoo.com slash twist.

SPEAKER_06: All right, everybody, it's the day after Jack said he is leaving as CEO and will be leaving the board of our favorite company and

SPEAKER_00: favorite social network, Twitter. Right after he did that today, Twitter updated their security policy. Now their private information policy is designed to keep people safe in a world where anonymous accounts on Twitter can go kind of crazy and do things like dock somebody what's doxing? Well, if you don't know what that means, it's basically your personal information. There are levels of doxing. I was doxed by Mother Jones earlier this year, where they put the actual town where I live, which is a very small town. And I was like, why would you do that? And I asked the writer, please don't mention where I live, just say the Bay Area because they

SPEAKER_11: were trying to dunk on me because and they tweeted it. And then I actually reported it to Twitter, that they did that. And they changed it after I called them out on it, because it is dangerous. And the reason it's dangerous to dox people should be apparent to anybody. I've been doxed three times in the last two years. In one case, somebody took a picture that I took up the skyline. And they did a reverse image search. And then basically found a listing of my home. And this person was a professional. And they are upset about me because of some political thing. I think it was because I was from Mike Bloomberg and not Bernie

SPEAKER_00: or something. And they literally posted my home address on Twitter. And I immediately reported it, it got taken down. But it is dangerous, because I've had two stalkers, three stalkers, I've had death threats, when you become a high profile person, even moderately, you know, 10,000 people 25,000 people following you, which which a lot of people have now on social media. 1% of people having a bad day suffering from mental illness, you know, on pharmaceuticals, legal or otherwise, people can do really rash things. We're seeing it now in the pandemic. And so it is a very important thing that social media companies get this right. So what was the change they made? Well, they added, and I'll just read to you directly from it. New media and private individuals without permission of the person depicted. And there's a bunch of other things that are not permitted in this contact information, non public personal phone numbers, email addresses, financial account information, bank account information should all seem super obvious to everybody medical records, and you can't threaten somebody, you can't threaten to expose somebody's private information. So even threatening to dock somebody, asking for a bounty or a financial reward for somebody else, posting somebody's private information, all of these things are not allowed. This is really a backstop for the bad 1% of people, people who get too heated, but it is a real issue. If you go on TMZ, and you just type in stalker, you'll see all the celebrities have to deal with, you know, this kind of issue. And it can be scary for individuals. I know many people with security and many people in the tech industry who live otherwise normal lives have massive, massive security presence, you can read about Zuckerberg, having a stalker, and a pretty serious issue. And I mean, I'm actually reticent to even talk about this, because sometimes that incites more, but we do need to have a talk about it. And it's a super important issue for us to address on social media. So the goal is obviously preventing harassment, which is great. The official wording is confusing. And here's the quote, there are growing concerns about the misuse of media and information that is not available elsewhere online as a tool to harass, intimidate, and reveal the identities of individuals. So you remember there was that Central Park Karen, I won't say her real name here, I don't need to put any more heat on her. But she was recorded by a birdwatcher, the birdwatch, I mean, just seem to be all bad people. He asked her to get her dog out of the no dog area in Central Park. So two people just getting in each other's business. And, you know, this goes viral. And this is the thing that is unique about the world today is that when somebody does something, they're having their worst moment in life, they're having a freak out, they have a bad day, they literally have a literal nervous breakdown, anxiety attack, it could be captured on video, and it could ruin the person's life. And we have to ask ourselves as a society, like, does everybody have that once or twice in their life? Or do some people suffer from acute anxiety or, or just are socially maladapted. And as much as you want to dunk on the person, there also is some compassion that should happen. So I think what we're seeing here is some sort of way to think about that, perhaps, but it's unclear. And you probably don't remember this. But in September 2020, Twitter was named in a lawsuit by a man who claimed he was incorrectly doxed as a white supremacist and then lost his job. According to law.com, the lawsuit claimed Twitter had breached and implied covenant of good faith and fair dealing Twitter was dismissed from the lawsuit in November of 2021, just this month, because the plaintiff had no contract with them according to Bloomberg law. So there's all of this shared information. And when you put it out publicly, and it trends, there are real world consequences, some of the real world consequences are arguably a good thing, right? If you do something really heinous, the world should know like, so if I don't know if I saw somebody get a cup of soup thrown in their face, like nobody should have to do that. There is no excuse for that. And that person got arrested, or if somebody beat somebody up. And so how does Twitter actually apply this? Well, people on Twitter went kind of crazy that maybe the new CEO, because of previous tweets, he's done, or maybe he's a little more on the woke side, and they'll be controlling more speech. This is a juxtaposition from the founders of Twitter, Twitter. Biz, Ev, and Jack were known for being the free speech party of the free speech party. In other words, they grew up like myself in Gen X, or baby boomers, kind of trained that freedom of speech was a core tenant of America, and even ugly speech, you wanted to protect, if somebody said something completely inappropriate, you just want to always air towards more speech being better and drowning out offensive stuff with more non offensive stuff. And so that was the concern people have. And it was a little bit confusing. And Wesley Yang, a Twitter account tweeted, and he has a sub stack, apparently,

SPEAKER_23: and a number of people made the same sort of observation with the George Floyd video violate Twitter's new terms of service that prohibit posting video of private individuals without their

SPEAKER_11: consent. I'm reading Wesley's tweet. And that is a great question. So I think this is one of those situations where they post a rule, that's a backstop. It's not meant to be every time you upload a video, because as I said, like, well, if I take a picture of at the next next game, and I happen to have five people in the photo, and I don't have their consent to post it, am I breaking the rules, I'm gonna lose my account. So enforcement of this rule is at Twitter's discretion. So it's a backstop against bad

SPEAKER_03: behavior. I don't think it's as bad as it looks. And the timing certainly makes people's minds wander.

SPEAKER_27: But I don't think that this has anything to do with Jack leaving and then them wanting to do this.

SPEAKER_00: Obviously, there are rules against revenge porn, or anybody's private photos that were shared, you can't do that. That's pretty obvious. That's been around forever. So this is going to be a continuing saga as we as we figure out how to deal with social media at scale. And that if there wasn't scale here, this wouldn't be such a big issue. But because of the algorithms because things immediately surfaced to the entire corpus of users, pre algorithm, this didn't come up as much because pre algorithm, you'd have 20 people see it, two people see it, it would get resolved, it would get taken down. So in the era of blogs, blogs didn't have this virality, you could have people reblogged something, they would then decide, I'm going to write a blog post about that blog post. But there wasn't some list that algorithmically just shot it in front of 100 million, 10 million, a billion people like we have today, the good news about the new system we have is that people can be super informed, the bad news is people can get hurt. And things that were mistakenly posted or posted with bad intent or posted harm people can go viral at such a velocity, that it could actually

SPEAKER_01: ruin people's lives. And that's the the the reason why I think the algorithms are going to be what we need to change in this framework, when we're thinking about the framework of social media,

SPEAKER_00: the algorithms are just too powerful, maybe things should not get shot up to the top of everybody's feeds all the time, maybe that's not good for society, maybe things should slowly percolate, right. And so if everybody turned down the algorithm in terms of the number of people who saw something, they might lose a little bit of time on site, but we might gain a little bit of wisdom, and maybe a little bit more judgment about what should be shared online, because we've had chat rooms since the 80s, and people have been online. And this has not been this acute of an issue that we see today. So good on Twitter for doing this, and maybe not the best communication. But this is an opportunity. Jack was pretty available to people on Twitter, he would reply to people, he would go to speaking gigs. And so let's see if the new CEO is as available. Before I start the ad read just go to

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SPEAKER_35: LinkedIn. Okay, let's get to the ad read here. Every startup founder and marketer has been in this situation, you know it well, you're planning to launch your new campaign, you know your audience, the team is happy, everything's going according to plan, you love your creative. But you got that one thought in the back of your head, don't you? How can I be sure that my acquisition campaign will drive high impact leads for my sales team? You need those high quality leads, we all know that. And with LinkedIn ads, you don't need to guess. Because when you advertise on LinkedIn, your message reaches the people who are ready to engage you. They're in the business mindset, you know that LinkedIn equals business, business equals LinkedIn, the end. Over 30 million companies are active on LinkedIn today. And over 71% of professionals use LinkedIn to make business decisions. So startup marketers don't wait to start achieving your brand and lead gen goals. No, LinkedIn is offering our listeners exclusively a $100 ad credit to get started today. Get the hundy and get your first LinkedIn

SPEAKER_34: campaign up and running at linkedin.com slash checklist linkedin.com slash checklist terms and

SPEAKER_35: conditions apply because they've given you a hundy. Okay, now for a new segment, our tweet of the day.

SPEAKER_00: And it's a it's going to do double duty here, because it's also our video of the day. But as we are now five days a week, I'm going to be reintroducing some of the great segments we used to do on the show. And we're just weekly. This way, you can look forward to something. So some one of the things we're going to try to do is have the tweet of the day. If you have a tweet of the day, you can DM it to TWI startups open DMS, or you can email producers at this weekend startups.com today is tech analyst, Jeremy Oyang, he tweeted, we ridicule the newest technology we don't understand. Here's Bill Gates being laughed at for the internet and a clip of Bill Gates on Letterman in 1995 talking about the

SPEAKER_08: internet. It's 70 seconds. I'll see you on the other side. But but you know, I think about this. And what

SPEAKER_38: about this internet thing? Do you know anything about that? Sure? What the hell is that exactly?

Chamath Palihapitiya: Well, it's, it's become a place where people are publishing information. So everybody can have their own homepage, companies are there, the latest information. It's wild what's going on. You can send electronic mail to people. It is the big new thing. Yeah, but you know, it's easy to criticize something

SPEAKER_42: you don't fully understand, which is my position here. Go ahead. But I can remember a couple of months ago, there was like a big breakthrough announcement that on the internet or on some computer deal, they were going to broadcast a baseball game, you could listen to a baseball game on your computer. And I just thought to myself, does radio ring a bell?

SPEAKER_47: You know what I mean? There's a difference. There is a difference. It's not a huge difference.

Chamath Palihapitiya: What is the difference? But you can you can listen to the baseball game whenever you want to.

SPEAKER_38: Oh, I see. So it's stored in one of your memory deals. Exactly. That's the RAM thing you talked

SPEAKER_44: about earlier. Yeah. Do tape recorders ring a bell?

SPEAKER_00: It's so easy now to look back on that and say, Well, it's global. And it's free. And it's accessible 24 hours a day for free. And those would be the other reasons that this is incredible. And anybody can publish to it. Whereas only a small number of people can publish to the radio, right? There's a gatekeeper. So we never even got to the gatekeeper part of this. But this is triggering all all these discussions I used to have where I tried to explain the internet to people when I was 23, 24, 25 years old, probably 24 when this was going on. And that's, I think what's happening now with web three. Although we had a different definition of web three just 10 years ago, the original definition of web three was going to be the semantic web. Basically, every component on the web was going to be tagged. So you could know this was a this page had a recipe on it. And then these were the ingredients, these were the steps, this is a temperature. So you could pull information semantically in an organized basis into databases, etc. That was kind of behind the scenes. And nobody really cared much about it, except for Google and other database providers. So now we have web three, people are trying to figure out what is all the stuff and you're explaining it to people when they haven't used it, or when it's very difficult to use. And I think that's what we're seeing with DAOs, NFTs, obviously, Bitcoin,

SPEAKER_01: Ethereum, and other cryptocurrencies. We'll see how many of those actually turn into reality. But there was reasons to be skeptical about it. In 1995, it really didn't work very well. I did a radio show on the internet starting in 97 on pseudo.com. I have actually the tape somewhere. I literally have cassette tapes because they used to at the studio record the cassette, and I have the mp3. So I'll pull them out. But I was doing a really bad Howard Stern impersonation in those days, probably just

SPEAKER_27: horribly embarrassing. Like my performance in Center of the World that some of you got to watch on

SPEAKER_04: the live stream the other day. Of course, there's nothing better if you want to do great misses. Barron's May 31st, 1999 cover story, Amazon.bomb. So this could be another great headlines in history,

SPEAKER_01: another segment we do. And you can go ahead and pull that up for our live audience watching live. But

SPEAKER_00: basically in 1999, amazon.bomb, which was retweeted by Jeff Bezos recently. Okay, next up on the pod,

SPEAKER_11: episode nine of the startup checklist. This is going to be the most important part of the checklist for most of you. It's the one you all asked for, which is how do you run a fundraising process? Everybody wants to secure the bag. Money equals power. Money equals resources to finish your product to get to scale, etc. And so people ask me all the time, how do I run a fundraising process? Well, at the launch accelerator, we took the fundraising process, and we really made it into a scientific

SPEAKER_09: process. I'm going to reveal some of that today on the startup checklist episode nine, you can look at all of the items on the checklist that this week in startups.com slash checklist this week in startups.com

SPEAKER_35: slash checklist. And if you want to talk to all of our producers at once, you just email producers at this week in startups.com. One disclaimer, we do not take pitches for the podcast. If you do pitch somebody to be on the podcast, you know, as a PR person, we're likely going to put them in the penalty box and not have them on for a year or two, because we don't like have people tell us who to have on the

SPEAKER_04: podcast, we have three full time producers, I'm sitting on maybe 10 pitches from them, of people they should have in the pod. Now, if you are a fan of the pod, and you want to see somebody on the pod, you can just do that publicly on Twitter and say, Hey, we'd love to have, you know, the founder of Airbnb on the pod. And use that mention them and, you know, publicly, give them a little nudge, that's fine. But we take our own counsel on who to have on the podcast, we do not take pitches period. And I've instructed my team to be very hardcore about that. Anytime they get a pitch from anybody PR, we reply with thanks. We don't take pitches for the podcast. Best. And I send these five times a day. And I like sending them because I like people to know like to stop sending pitches. You're just not going to get somebody on the program ever. We do this. It's our job to find great guests. And it's not yours as a PR person. And then there's all these folks out there who are running, like booking services where you can sign up and then they guarantee you to get a couple podcasts and somebody had put me in their documents and I went ham on this person. We do nobody can buy you on this podcast. So this one person was kind of insinuating that he had the inside line on this. What he had done was a real scumbag move, I'll be honest, he had talked to our sales

SPEAKER_11: department about buying ads for a customer. Then he launched this other or had this other parallel business where he was booking guests. And then he put that we were one of his partners. And they also

SPEAKER_34: put like NPR radio lab was one of his partners like, Hey, dude, what are you doing here? Like, you're

SPEAKER_56: you don't get to book people. He said, Oh, I'm not saying that I'm like, that's what the pitch deck is

SPEAKER_34: for. It's like, Oh, well, I talked to your ad sales people. I was like, Yeah, like, I'm going to destroy you if you do this again. Please do not. Do not say that you can get people on this podcast. You cannot. Here's how you get on this podcast. One, do something interesting in the world to be successful.

SPEAKER_35: Three, have a hot take on something that people are talking about in the world, write a great blog post, use memes to start a $10 million venture fund. You know, mix it up on Twitter, have something

SPEAKER_00: interesting to say. But generally speaking, I would say building interesting stuff in the world having a

SPEAKER_11: great track record is how you get on the pod. And it's our job to find great things. And you see, we are filling up our dance card here, with all kinds of great features, etc. And so it's sort of like, don't call us, we'll call you like, if you're if you're meant to be on the podcast, my

SPEAKER_09: producers listen to, I don't know, they check in on all the different podcasts out there. So, you know, if somebody has been on other podcasts and then on Tim Ferriss, and then we know it. And if they would be good on our podcast, yeah, maybe we'll have them on. We know if there's some sleeper

SPEAKER_04: guests that comes on a, you know, niche podcast, maybe some, maybe they're on pumps podcast, or med Farber's, or whatever 20 minute VC, there's always great podcasts out there. Somebody's on one of those knowledge project, and we think, hey, they might have a good conversation with us that we can build on. We'll find that out too. So sometimes doing a good performance on another podcast is

SPEAKER_11: another way to get here, because I'll ask my team, when they suggest somebody listen to other pockets,

SPEAKER_09: they better, are they actually a good guest? Are they honest? Do they talk like a PR person? Like, we want guests who can be real. And can you imagine somebody coming on here media trained? Like, it's going to be they have come on media trained and it gets on media trained immediately when I say, Hey, you didn't answer my question. But thanks for that answer is really delightful media training. Like I've actually said that to people like, okay, don't give me the media trained answer. Give me

SPEAKER_11: the real answer. And that really makes PR people lose their minds. Sock to compliance is critically

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SPEAKER_03: Okay, let's get started. These are items 81 to 90 on the checklist. Again, this week in startups dot com slash checklist item 81 be able to pitch your startup effectively and

SPEAKER_64: concisely. This is something that seems super obvious. But oh my Lord, people do not know how to pitch their own startup. And if you are not practicing 1020 times recording yourself looking at a transcript yourself, you're not doing deliberate practice, you need to deliberately practice your pitch. This is uncomfortable. Set up a camera record yourself pitching, then make a transcript, look in the transcript for the arms and the odds highlight them, then do a second shot at it. And you

SPEAKER_11: want to get good at presenting your product. But you also don't want to sound like a robot. So you're not reading a script, the slides are your guides. So you don't want to memorize your deck in like a script. What

SPEAKER_04: you want to do is when the slide comes up, and you're giving your presentation that fires off in your mind what you're supposed to talk about. And you can actually read the slide. So we say internally at the launch accelerator, the slide is your guide. Don't memorize it. When you click next slide, the slide should guide you through what you're supposed to say. Now remember the five golden rules of pitching. This is something I've come up with from when we had meet the alley, which you can look for the New York Times story. In 1996 or 1997, I hosted an event called meet the alley, where I had five people present startups to Ted Leonsis myself and a bunch of other venture capitalists meet the alley was the name of that one. So that's when I started doing pitch competitions literally in 1997 at the loft 600 Broadway pseudo calm. And I did TechCrunch 40 created that with my guarantee and then went on to do the

SPEAKER_09: launch festival. So I know how these pitches work after sitting through 1000s of them and coaching hundreds of people on them. Here's your five golden rules. And this is so 81.1. Number one, get to the product in 15 seconds. You really want to get to that product in 15 seconds, you want people to see it so that their neurons fire and they are like, Oh, whoa, there's an Uber app. Oh, there's calm calm.com.

SPEAKER_64: Number two, examples matter. If you can't give crisp examples of people using your product, then you suck as a founder or you're not being diligent, you really want to show your product

SPEAKER_11: in action. And the way to do that is within a specific example. Why is a specific example a great way to do this? Because then now they've seen the product, they've seen the specific example, they can, they can now start to imagine other scenarios where your product might be in action. So Airbnb comes up as an example. Okay, meet Susan. Susan is in college, she's looking for what she's going to do at spring break, she has a budget of $1,200. She looks and she finds that she can get a hotel in Paris for the cheapest hotel is $179. So Paris is out of the question, she wants to go for eight days, that would have blown her whole budget, just those eight days. But look, there's a room available that she can rent for $60. Okay, well, maybe she can make it because that's going to be $500 for the room for eight days. And oh, look, she found a ticket for $379 in coach. Hey, she's still in budget. Now she can afford to go to Paris, which is her dream, as opposed to going to Tampa for spring break. Great. Boom. That example shows you that Airbnb allows people who would normally go to a domestic trip to go on an international one, it gives you the price. And it just shows you why this

SPEAKER_64: matters, right? Because people can take trips that are longer and more interesting than they previously

SPEAKER_11: could. So really think about that number three is synchronicity, what you're talking about should match what's on the screen. So when I was doing that example, if on the screen was our projections, now people are reading the projections, or they're reading your mission statement, or whatever you got on the screen here. And you're telling them a story. So cognitively, what happens, what you should do is, you should say, Hey, meet Susan, boom, Susan's picture comes up on the screen, click, she is deciding

SPEAKER_04: with her $1200 budget where to go click. And now you show the two the first option, okay, here's our first option of Paris in a hotel, does it work? Click, her friend tells her about Airbnb. And she finds this beautiful extra room, and it's small, but she doesn't need a lot of space because she wants to be

SPEAKER_35: out on the streets of Paris. Boom. What you're saying matches what's on the screen, and screens

SPEAKER_09: want to move. So I love when somebody is doing one of those pitches, and they 123 reveal three things on the screen, right? One slide one message is point number four, you are not writing a novel when you're

SPEAKER_11: doing a PowerPoint or a keynote presentation or Google slides. So one slide one message, people will be like, our business model, they have four different paragraphs with six different bullets. That's a deal memo. One slide one point, if you have three different business models you're considering, you shouldn't you should really be focused on one, maybe two. Our business model is one, we're a marketplace, we take 5% on either side of the market for a total take rate of 10%. Slide two, we also offer a SaaS offering slide three, we also are considering a white label product. Oh, one slide each not on the same slide. Why? You want people to remember it, you want to let the slides breathe. And you want to keep the slides moving. If the slides are moving, people are going to stay engaged, especially in the age of being at an event, or being online. Point number five show, don't tell. Don't tell us what your product does show us your product in action. Don't give us vague descriptions. Show us data. Show us your customers show us the product in action. Show don't tell. So whenever you're telling people stuff, but it's not being shown on the screen, or not being shown an example, you've kind of failed, right? And it breaks that synchronicity I talked about before. And remember, bullet point 22 on this checklist is in fact, one simple sentence to explain your startup. Can you do it? Can you do the OSS? One simple sentence, no jargon, no marketing speak, just say what the company does in the most basic way. Airbnb lets people rent rooms. And that's enough because obviously in that sentence, the other side of it is that people can rent it and people can host people boom. Uber is everybody's personal driver. Boom, we get it. Having a personal driver is dope. Get a ride in minutes with your smartphone, boom. Get anything delivered in 15 minutes Uber Eats or the new Uber Eats mission statement. So you're going to want to make the stack with your team, you're going to want it to be tight, you're probably gonna have three different versions of it, you'll have a deck that you can send to people over email that doesn't have confidential stuff in it. It's called a teaser deck, typically 10 slides or less, then you're going to do a deeper dive in a 2030 40 slide deck that would be done in 2030 or 40 minutes, one minute per slides, generally a good rule of them. Sometimes people like to go even 20 30 seconds per slide. In the example I was saying where you're clicking, hey, we have three business models, you can move pretty

SPEAKER_04: briskly through those 10 seconds each. Okay, that's enough of what I'll tell you for, you know, being ready to present point number 82 on our checklist. Do you know how to find investors?

SPEAKER_11: I know this sounds stupid. But half of my life when I tell somebody I you know that, yeah, this is an area we invest in, they're like, well, do you know anybody who invests in this area? It's like, do you know about crunch base? Do you know about pitch book? Do you know about Google? I mean, this is really simple, folks. Look at your startup. Okay, you're in on demand. So you're like DoorDash, Uber, but you're on demand pet grooming. Great. Who has worked in on demand before? Okay, if you're an Uber investor, you're an Instacart investor, you understand somebody coming on demand, press a button, all those massage services, press a button, dog walking services, press a button, okay, this is going to be related to those. Therefore, you find investors who have invested in that space before. Also, have they invested in any consumer technology? Have they invested in any ecommerce technology? Well, you just work backwards, you look at who's invested in adjacencies or verticals around or that your startup is in, and you will be able to build a target list. Not only that, you want to drill down and double click again, not just the firm, but who in the firm. So you might have somebody in the firm when you look at their profile page online, you look at their Twitter, and you're targeting them. They're only talking about SaaS startups, and they only have SaaS startups, and you're trying to figure out where this grooming on demand. Well, you want the partner who does consumer or maybe who does commerce because you're kind of in that sector. So you really want to understand not just which firm but who at which firm and then adding to this complexity is some people do seed, some people do growth, some people do Series A, some people do the life of it. And there might be different partners at a firm who do the growth round when it's 25 million or more. And there might be

SPEAKER_35: somebody who's a scout who writes the 100k check and everything in between. So understand the stage

SPEAKER_11: at which those investors and you want to make a qualified list of targets. So anyway, you want to get to about 150 of those investors. One of the other things you want to know about your investors is, are they actually able to invest? Sometimes people will be between funds. Sometimes people will have deployed the fund, and they're only doing follow on investment. So you can just ask them very easily, are you actively investing? You know, do you tell me about your fund? How fully is it fully deployed? Is it half deployed? And what is your follow on strategy, you can ask these kind of questions to understand what impact their fund structure, and their timing is going to have on your round. And you're totally within your right to ask that. If people ask me that I'm like, Yeah, our fund three is halfway deployed. And yeah, we'll be raising our next fund at this date. I'm just making this up, by the way, this isn't true. But yeah, because I don't want to generally solicit here. But they will tell you what's really going on.

SPEAKER_04: If you listen to This Week in Startups often, you've heard me talk about Odoo's suite of business

SPEAKER_35: apps a lot. Well, they're going to give you your first app free forever, and then $1,000 off your implementation pack at odoo.com slash twist, O-D-O-O.com slash twist. And here's why Odoo is so great for startups. Well, their suite of business apps can help you run your entire company from just one platform. They're going to streamline all your workflows by bringing all your information together. This eliminates all the annoying repetitive tests like entering data across multiple platforms. Plus, if you only need two or three apps right now, that's okay. Use those two or three apps to optimize your workflow, and that's all you'll pay for. Odoo is not going to charge you for apps you don't use. Of course, they wouldn't do that. So Odoo offers 30 main apps and over 16,000 apps from their open source community. You know, the apps they have, bookkeeping, sales, CRM, website builders, and more. Again, your first app is free forever, and Odoo is offering $1,000 credit on your first implementation pack. Go to odoo.com slash twist for $1,000 off. That's odoo.com slash twist. Okay,

SPEAKER_11: checklist item number 83. Do you know how to build a fundraising pipeline? If you're in sales, you understand what this means. But basically, you want to start with 150 targets, really curate that list, you're hoping to get first meetings with one out of four, one out of three, depending on how awesome your startup is, how alluring it is, how hot your category is, you might get 10%, you might get 20%, you might get none, you might get a third, I think that would be the upper bound. And it really depends on how targeted that list is. If you're putting biotech investors on the list, and you're, let's say, a SaaS business, well, they're obviously not gonna even respond. But if they're in the SaaS business, and they're, you know, craft ventures, great. And then you have to know, well, Jeff, that craft is the person who does marketplaces and Brian and Sachs, they do the SaaS. So you have to understand which partner you email the wrong partner, they may forward it to their partner, that partner never

SPEAKER_04: gets back to you. Boom, now you've burned one of your leads. So be considered when making that list.

SPEAKER_09: It's not a race to throw people on it, you want to really curate and go slow. This is like really being thoughtful about picking that list. I get people who just send generic emails, and they're basically spamming 1500 investors. That's the wrong way. You're doing it wrong. If you're doing that, you want to really target these in. And you really want to be able to understand your target first meetings, maybe you get a third, maybe get, I don't know, 3040 of them, maybe even 50, who knows. And if

SPEAKER_64: you can convert a third of those or half of those even to a second meeting, now you know, something's

SPEAKER_09: good. If they want that second meeting, you know, you are in really good shape. But I would expect a

SPEAKER_64: severe drop off. So let's say you got to 40. Now you're down to 20 or 15, maybe 10 going to diligence, maybe five going to do this, maybe three going to diligence, and maybe you get one to three term

SPEAKER_11: sheets, 150 targets really carefully selected to get but one, two, three, four term sheets. In other words, one out of 50, one out of 75 of yours and targets wind up giving you a term sheet. That's the

SPEAKER_09: funnel. It's a numbers game, just like sales, just like dating. Everything is a numbers game. In

SPEAKER_11: this regard, when you're trying to find a match with something that is, you know, super important, it varies greatly, you will get judged based on that email you send, right. And we'll talk about that template right now. Item number 84. Do you know Jason's perfect cold template email? You know that the perfect cold email, short and to the point. Examples matter. Steve, where we saw your interview on this week in startups, we talked about your investment in Robinhood, we're doing something similar in Latin America, for millennials. And we're also doing cryptocurrency. We currently have 1400 customers, we charge $25 a month for unlimited trades, and to be able to talk to

SPEAKER_04: a money manager. And here's a quick product demo at this link. And here's a loom. If you don't know

SPEAKER_11: what a loom is, it's basically a video where you loom is a company that helps you make these, but you can use any piece of software to do it. Basically, you're presenting and there's a little picture in a picture of you talking. And so you can really make it custom you can send somebody alone. Hey, Steve, it's Jason, want to walk you through my deck just to save your time. So you basically take that first meeting, you put it in the deck. Pretty cool. If you're good at presenting charts work,

SPEAKER_04: but you want it to be short. If you write a novel, that's not what you're doing here. Just think of it like a trailer. The trailer is not the entire movie. The trailer is to get you to buy a ticket to the movie. That's what this email is. You're trying to get people to buy a ticket and

SPEAKER_09: come see the whole movie, which is your long presentation, which by long I mean in today's

SPEAKER_04: terms a 20 30 minutes zoom 15 minute presentation in all likelihood 15 minutes of q&a. Okay, now checklist item number 85. Do you know loom zoom room? Okay, this is pretty standard now. People are sending looms or short emails with a short deck. Pretty much the same thing. The loom is kind of like a higher level if you're good at if you're good at presenting, and you really want to impress people

SPEAKER_11: that you took time. There's a reciprocation here. Oh my god, the person took the time to make me a custom video where they walk me through the deck. And they address me by knowing who I am. And they've heard me on podcast and they've read one of my medium posts. And that's just like, huge VC bait. You're a fan of theirs. You know, when I get emails, oh, I'm a big fan. I loved all in episode 55. Your Chris Sock interview was great. This tweet really spoke to me. I am now building this startup that does x, y and z

SPEAKER_09: it's perfect for your syndicate. Because we're at $25,000 a month and reoccurring revenue. And I heard

SPEAKER_11: you say that on a podcast. Boom. Now think about this. Every time you do one of these looms, it's another rep. It's you getting another swing at that. So if you did 10 of these a day for 10 or 15 minutes, I think it's a pretty good use of time, you're gonna get pretty darn good at it. And you're gonna get feedback. So you send 10. Nobody one person replies, what do they say in the reply? Oh, really like the loom. But you didn't talk anything about your customers. Okay, now you know when you do the next 10. Start with your three best customers. You want to lead with what's strongest in these things as well. So if your products really strongly with that, if your traction is really strongly with that if your team is really strong, lead with that. Oh, yeah, we're three engineers,

SPEAKER_35: out of Facebook, Amazon and Google. We actually worked together recently at Coinbase. And now

SPEAKER_11: we're starting our own DAO platform. You know, you're like, Whoa, look at that resume. You just do risk the whole thing for me. You guys know what you're doing. You gals know what you're doing. Fantastic. So think that through. And then once you've done the loom, you're trying to get a zoom. This is so low risk for people. Hey, can we do a quick zoom? I'm available seven days a week

SPEAKER_35: from 4am and 24 hours a day. You tell me when you're available. And here is a link on my calendar to 30 minutes, 45 minutes or an hour, whatever works best for you. And now you're showing like,

SPEAKER_04: Oh, wow, you'll do this in 20 minutes, 30 minutes or 40 minutes. Wow, you really respect my time. So that's a power move. When somebody is like, I just need 10 minutes, I'll go run you through the deck and answer any questions you have. It's like, Oh, great. You don't need to have lunch with me. You don't need two hours. Like we can get through this pretty quickly and see if there's a match. So the loom gets them on the hook. The zoom builds that rapport and answers any question. And then

SPEAKER_35: maybe you'll get in the room with them. If they're if you're local, or maybe they'll come fly and see you now that COVID is ending. So I think that's going to be the new process loom zoom room, got it item 86 on our list. You want to nail that first meeting, you really want to be super, super tight, and you want to be prepared. So most people will say start with venture firms that you don't care about as much or investors who are not your top ones. So you can spend two weeks pitching people who aren't your ideal customers, you get those reps and you get the feedback, and then you move on

SPEAKER_04: to your top targets. Little tip there. Start with the people you're not really concerned with winning them as a business. And then, you know, the people you really want to win as investors and partners, you can put in week two or three. Best practice have two decks with you. Hey, Jason, want to be

SPEAKER_35: respectful of time, I have a five to 10 minute deck, it's 10 slides. And then I have it in as an appendices if you want to drill down into anything. And then I have a 1520 minute deck, that's 30 slides. And you know, 10 of those slides really go into our go to market strategy, and five of them go into the total addressable market as we see it, I'm not sure which one you want to do today. And then now you've come across again, it's being super considered. Not sure how much you know about shipping. We're Flexport, we want to talk to you about our product and our service, we can do the 20

SPEAKER_04: minute 25 minute one, which has a primer on the shipping industry, or we can do the quick 15, the quick

SPEAKER_15: five to 12 minute one if you're if we'll just tell you about our business and our performance.

SPEAKER_35: This just puts you on a higher level, you're really thinking about the other side of the table as opposed to yourself in the meeting. I do this as an investor, when they asked me,

SPEAKER_04: I say what's best for you? Would you like to do 10 minutes of presentation 10 minutes of questions?

SPEAKER_11: I've already reviewed the deck, you just want to talk for 10 minutes 20 minutes? What works best for you? Well, I really want to show you the product. Okay, great. Show me the product. And that's a nice back and forth. And I like that back and forth because I like to see how gracious the founder is and their EQ, right? Not IQ IQ, but EQ, like how emotionally intelligent are are they not just in

SPEAKER_04: how intelligent they are. And you can always tell them I can send you the appendices, I can send you the deck afterwards, you can go deeper dive in it, you got to be high energy, you got to be super positive, you got to really get people excited about what you're doing. You want to be prepared to

SPEAKER_11: answer questions concisely. What's your revenue? Last month, we had $27,000 in reoccurring revenue.

SPEAKER_09: For 2021, our yearly revenue will be $470,000 on target. Short answers, concise. Why? Listen to

SPEAKER_11: their question, give them the answer. Now they can ask you another question. It's like ping pong, boom, you just, you're hitting the ball back and forth. They ask a question, you answer the question in as much time as they took to ask the question. That's ideal, back and forth in a volley. They asked a question, it took them two or three sentences, you answered it in under two or three sentences, maybe in one. Now Wow, crisp back and forth is going, they're going to be able to ask you more

SPEAKER_35: questions. Don't waste your time. Don't filibuster. Don't make excuses, just concise answers, own your traction. And we actually record people answering questions, we categorize questions in our accelerator. And we try to figure out like, how long are you taking to answer this question? And was that ideal?

SPEAKER_04: You took 70 seconds to answer this question. And the question was, tell me about your team. Okay, that might be appropriate. The question was, how many employees do you have? How many team members you currently have? You took 70 seconds? Like, maybe that should take seven seconds. We currently have five full time employees, and three contractors. Oh, great. Tell me about your contractors. What are you outsourcing right now? Tell me about your next two hires. Now the investor can ask you more questions and get into that nice rhythm, like in a tennis volley or ping pong volley that we've all been able to experience in our lives. Before the meeting ends, you want to make sure you have clear action items and next steps, you know, and just asking outright, do you think you want

SPEAKER_11: to invest in this round? Would you like to go to diligence? What's the next step for you? Would you like us to present at your partnership? Would you like a couple days to think about it? You really want to take ownership of this moment in time when the meeting's wrapping up? Is there any other questions I can answer for you? Would you like to move into diligence? Do you want to do another meeting? Would you like to talk to some customers? Would you like to meet the team? You know, we really would love to have you in this round. So just be forward like that. We you're our dream investor, Jason, we'd like you to lead the round. Would you be interested in that? Have you thought about would you like to put a term sheet in? Just be there be be concise like that. That is a sign of like confidence. That means you're going to do that when you're hiring somebody or closing a customer. That's great for us to see as a VC, you want to be forward. You want to be just let's consummate here. Let's do it. Let's be in business together. If in fact, you want to be in business together. And you

SPEAKER_09: should know that going into the meeting that this is your target, you do want to be in business with

SPEAKER_11: them. Okay, checklist item number 87. Can you nail the post meeting follow up? Again, you have to follow up do not sit there and be passive be positive. Think about things that maybe weren't clear in the meeting or that you stumbled on that you might be able to provide more clarity on Oh, you had asked me about our hiring roadmap. Talk to the team. We actually spent some time thinking about that. And we made this notion page. Here's the notion page. If you click on it, you can see our year one, year two and year three hiring plans. Wow. Or you had some great piece of feedback. You asked us about competitors. And if we were aware of this one, we weren't. We actually looked at it. Here's the key differentiator. They're not doing SMB. They're only doing large enterprises. We're starting in SMB, we might go into their market, but we don't think they're going to go downstream for us. Thanks for

SPEAKER_35: tipping us off. Never lie, never bend the truth. And you want to create a sense of urgency. So, hey, we have two term sheets. We're wondering if you'd like to submit a term sheet.

SPEAKER_04: We're going to try to make a decision this Friday, we're asking everybody to have their term sheets

SPEAKER_11: in on Friday. And maybe including exciting updates. Hey, we met three weeks ago. We'd love to hear

SPEAKER_35: back from you. Wanted to let you know we close two more enterprise customers one for 2000 a month and one is paying us actually 40,000 upfront for the year. Now 15,000 of those consulting services, but it is our

SPEAKER_11: largest reoccurring revenue at 25k a year. So really excited about that deal with Sony. That

SPEAKER_04: kind of stuff, man, it shows you're you're making progress even during the fundraising process. Item

SPEAKER_09: number 88. Do you know how to diligence your potential investors? Yes, you, the founder should

SPEAKER_35: be diligent in your investors. Very simple. Your diligence just means researching and you want to do

SPEAKER_11: backdoor dark references. What does that mean? You're going around the back door. You're not telling him you're doing a reference. You look, you see who they've invested in. And you just email the founders. Hey, I'm thinking about having Jason on my cap table. What do you think of Jason? Oh, you email 100 folks, you're gonna get 99 great answers. There might be one or two people I didn't see eye to eye with. That's okay. If somebody didn't see eye to eye to them. And they're just like, Hey, yeah, Jason, I didn't vibe. Okay, that's fine, too. You're gonna have that. But you at least want to know that. And then you can come to me and say, Hey, you know, I talked to somebody, they said, like, Yeah, you left the board. It was, yeah, you know, we didn't see eye to eye on the future of the

SPEAKER_04: company. So we left the board, we gave them back the board. See, we sold our shares back. It's like, okay, great, didn't work out. Does anybody expect this always to work out in our industry? Of course not.

SPEAKER_11: So this is a great way for you to really understand what is going on. Some investors, they just write checks, their hands off, you might be looking for an investor like that. Other ones are super, super deeply involved. Other ones, you know, can be just a huge negative experience. You might remember we had Ryan call back on the program. And he had detailed his nightmare VC experience with Craig Shapiro from Collaboration Fund. We invited Craig to go on this

SPEAKER_04: podcast, he declined or I should say didn't even respond. And I heard from the back channel,

SPEAKER_09: Ryan was upset that I asked him about this experience, even though I told him I was going to ask him about when he was going to be on the podcast. Anyway, it's worth watching episode 1141 of this podcast when Ryan called back was on talking about this nightmare experience with a VC because he

SPEAKER_11: went into detail in this blog post didn't mention the person's name, everybody in the industry knew, everybody tweeted, Hey, it's this person. And you know, people, it's not too hard to figure out who was on the board. Long story short. It's a good episode to watch because you can see what happens when it goes bad, it can be pretty ugly. And it doesn't mean that that, you know, Craig Shapiro from the

SPEAKER_09: Collaboration Fund hasn't learned from this or this two sides every there's really three sides every story is as Ryan's as Craig's and then there's reality. And so Rashomon right, there's many different sides and versions of the truth. And you can take that all into account, right? Sometimes

SPEAKER_11: people don't find that's okay. Okay, item number 89. You want to send a great investor update, really right concise monthly updates, you can put people on your monthly update for non investors, investors who have yet to invest, you put them on a BCC or you do like a mail merge, you know, like, hey, Jason, it was great meeting with you want to give you an update on the business. Things are going great. We grew 17% this month. And there's a chart at the top. Wow, when I see that chart, and it starts trending, and I'm like, I made a mistake or, oh, these folks have proven me wrong, or the concerns I

SPEAKER_04: had did not turn out to be true. Great. I can invest at a higher price, perhaps, or give them a term sheet for their Series A or Series B. If I passed on the C or Series A, that is a great way to continue to re-engage investors who you spend the time to do one or two meetings with, you might as well see if

SPEAKER_11: maybe next year or the year after or maybe your next startup in four or five years they want to invest in. Remember, people invest in lines, not dots. But if you make a bunch of dots over time, it might form a line, right? And that's what you're looking for, you're building credibility with the investment community. And the investment community is building credibility with the entrepreneurial community over time. And then your reputation kind of results in your matching and

SPEAKER_09: your performance. Finally, item number 90. Understand all the SEC rules and regulations around fundraising. When you're raising 506B, that's the most common way you don't talk about it

SPEAKER_11: publicly because then it'd be put into this solicitation rules. The 506C you can raise in public, but you have to confirm those investors are accredited by reviewing accreditation documents like W-2s or letters from the Warriors accountants. That can be cumbersome or not. 506C usually costs more money because it takes more time. And folks usually hire a service to verify that accreditation. I think the shore fund management which were investors in and they do our back end will do that for you. You really only want to invest money from people who understand the risk. That means accredited investors and people who are willing to lose the money. If you take 50k from your friends, your family, is it going to ruin the relationship? Or do they have $50 million in 50k? They're totally fine with

SPEAKER_04: supporting you and that's no big deal for you. That's like one night of poker for them. Okay, fine. But if that's like they're a third of their retirement account, you don't want to take that money, right? You don't want to be responsible for that. Maybe take five, you know, which would be

SPEAKER_11: three or 4% of the retirement account and they really want to support you. Okay, fine. But think

SPEAKER_64: it through. You got to be really careful with accredited investors here in the United States. And you need to have a great law firm advising you and you need to do your research about this.

SPEAKER_11: But basically, you take money from accredited investors and you avoid this problem, or you use a platform like Republic Seed Invest. Those are the two trusted ones, at least ones I trust. I don't trust the other ones, to be totally honest. You know, if you're going to do that route, then you can talk publicly about it. But there's a whole different set of rules for that. So make sure if you are going to be public, you understand the rules, it does add complication. I'm not saying don't do it. But it does add a lot of complication. If you do it privately, you do it privately. Easy breezy. That's what your lawyers are going to tell you to do.

SPEAKER_09: Why wouldn't you do it privately if you can close it privately? And that's kind of what's screwed up about the accreditation laws, at least today when we're taping this in 2021. Maybe in 2022 2023, you'll be able to do this publicly and accreditation will come in the form of a license, not just how much money you have in your bank account. Okay, that wraps up Episode nine. On Episode 10. We're

SPEAKER_11: going to do the catch up episode. And we're going to cover all the things we missed in the checklist. If you have things you think we missed, email producers at this weekend startups.com and tell us what you think should be on the checklist. Hopefully, some super fans and stands. And people who just are fans of the podcast will tell us what we missed. Okay, we'll see you all next time on this week in startups. Bye bye.