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TSH Startup Masterclass:
You’ve Got Seed… Now What?

TSH Masterclass You’ve Got Seed… Now What?

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Write-up by Linsey Willaford-West, Founder, eTeamUps

What does a Series A mean? It is your first round with professional investors, with true financial targets and commitments.

How to get from seed to A: deliver an MVP, build out your team and get customer traction

MVP: the core of your business to prove the business
Committed team: working together full-time and covering the key bases of the business
Product/Market Fit: proving that you have built something that target clients will pay at a commercially viable rate

When do you need Series A

When you have proved the above
3-6 months before you need the money
When you need to get to the next level

Investors matter

Money isn’t money… remember that you will be in a close relationship with these investors for years! They should be a resource to help grow your business. They should be people that you would really like to work with!
They will generally follow-up in subsequent funding rounds and will have influence over your future equity

Start early- start to casually network and pitch 3-6 months ahead of time. Investors will want loads of data, but try not to let it distract you from running your business (consider doing this ahead of time or appointing someone to focus on this)

Build a relationship- have trust for the road ahead & understand their firm (their investment thesis)

When pitching, be UNIQUE and put the vision in context of your competitors

Agree on milestones with your investors early. This is important to align the vision of success and motivate the team. Less direct milestones might be of equal importance. Examples can include: user conversion/engagement rates, team & product development.

You have series A- now what?

Know your runway- how much time do you have before you need to fundraise?
Start investing to grow the business
Communicate the milestones that you agreed with your investors with your team

Set a communication schedule and keep to it
Communicate loads!

Think about your own role (will you be the person who will lead the company into series B and beyond, or should you start specializing?)
In your board meetings, use it as a working session to problem solve and automate your data so that you don’t spend too much time generating data just before the meeting

After Series A, B/C is for expansion and team building, C/D/later is growth including expanding to new locales, product lines, etc

February 3, 2012 | Techmeetups

Startup Masterclass

TSH Startup Masterclass:
10 Things You Need to Know About Fundraising

Presentation by Mark Davis, CEO & Co-Founder, Kohort

Write up by Linsey Willaford-West, Founder, eTeamUps

Is VC a pandora’s box? Align the plans for your company with your fundraising strategy. For example, if you need loads of money to build a big company, go for VC. If you need a small amount for a business with small potential returns, bootstrap and keep as much of your business as possible.
Debt vs equity? Benefits of convertible notes: defer valuation, simplify paperwork. Benefits of equity: lock-in valuation, make it easier for future financing. To make the decision, answer the question whether if the market valuations are strong. If so, take VC. If not, take debt and hope for an upturn later.
Venture math- investors don’t care about the pre-money valuation. They care about this equation: investment / dilution – post investment = pre money valuation
Three documents- you will need these: 1) executive summary 2) 10-20 slide ppt presentation 3) operating model (revenue plan, cash flows, how you plan to build the company)
Investment overview slide: the first slide should include the answers to the questions that the investor wants to know in terms of whether you are a fit with their investment thesis (this usually includes Market size, Competitive Position, etc)
Culture drives structure: everything in the structure of the deal is negotiable!!
Fundraising is like dating- since everyone is different you will be rejected sometimes, no matter how great your company is! Signal how popular you are and that you are speaking to other investors. Tell investors every time you hit a milestone with other investors (i.e. offer, got a term sheet, etc).
The three-step: don’t go for fundraising when you are desperate for cash as it will weaken your negotiating leverage. Start by taking a convertible note that will give you 3-6 months of lifeline. Then go to Angels for a commitment of a full round. Then go to the VC s and say “I have a deal on the table, do you want to be a part of it before it closes?”
Raise-slow: take your time. If an investor gives you an offer on the spot, you don’t need to take the offer immediately.
Get a pile-up: get as much money on the table as possible before finalizing terms
Respect- always be respectful and maintain good relationships

Find more from Mark: @mpd and mpd.me

Mark is writing two books on these topics…so look out for it!

February 3, 2012 | Techmeetups

Startup Masterclass

TSH Startup Masterclass:
Startuper and Investor Getting to a $1B Startup

Presentation by Andrey Kessel, Co-Founder & Partner, TexDrive

Write-up by Linsey Willaford-West, Founder, eTeamUps

Andrey presented a case study of Solexa’s journey from startup to a buy-out by Illumina raising the following points as the key lessons learned.

Remember that funding is just a tool, it is not the end game
Building a company is always a rollercoaster – ever the best known ones went through the period that you are going through!
Valuation is a function of risk. The more risk that you eliminate (i.e. technical risk, market risk and team risk ), the higher valuation you get. This is linked to the milestones for building a company
Get a good team and a set of advisors/people you can draw upon
Insisting on NDAs too much is a red flag for investors and tells them that either the entrepreneur is naive or the business is non-defensible

February 3, 2012 | Techmeetups

TSH Startup Masterclass:
Winning the Hearts & Minds of Venture Capitalists

TSH Masterclass Winning the Hearts & Minds of Venture Capitalists

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Write-up by Linsey Willaford-West, Founder, eTeamUps

About Octopus:

Growth & early stage focus
Invests £250K-5M
Every Wednesday they run ‘open office’- message Ataylor@octopusventures.com
Looks for companies with: product, route to market, team, ability to validate customer acquisition costs with traction

VC or Angel?

If you have traction and want to fund growth, go for VC funding. Go for angel if you are pre-product or pre-traction.
Choose your initial seed investor wisely. 20-25% for £500K-1M is a good rule of thumb. Be careful that they do not give you too high a valuation that will make it unattractive to the VC in the next round.

Preparing the approach:

Ensure you understand the VC that you are going to meet, and ensure your business is a good fit. Find out what the VC is looking for and do your homework on what value they might be able to add to your business
Your chances of getting an investment: 12K business plans sent each year, see 200 company meetings per year, then make a single deal every 6-8 weeks
Get a referral from someone in their network (one option is through the portfolio companies)

Meet up with the VC

Send presentation in advance
Bring the two execs from your team, but ask first
impress the VC right away with who you are and why you are special
Communicate the business plan in simple terms
If you don’t know answers to the questions, don’t wing it, just say that you will come back to them with the answer

It’s all about the team

This is more important than the product or business plan!
Be proud to talk about what makes you and your team special
Ensure that there is one clear leader
Ensure that there is a blend of complementary skills. If there are gaps, say so and ask the VC for help finding that person

How big can you grow?

At minimum, VCs want a 10x exit
Businesses worth £100M is the minimum
Under promise your investors in terms of returns
Consider getting the money that you need in chunks based on hitting milestones. Milestones could be something like: 1) breakeven 2) get 10% growth per month and 3) get to exit.

Strike Zone

It takes 8-12 weeks to close a deal including negotiating.
Remember that you will sign a warranty that what you told the VC is true about your business

Get married (make the deal)

Most VCs look for an exit after 3-5 years. A corporate finance advisor will be appointed to help sell the business. Know what valuation you want over what time period. VCs do not want lifestyle businesses (i.e. high salaried staff, ongoing low returns)

What we say & what we mean:

“send us a short message” means “keep your deck or email SHORT.”
“we need to see customer validation” means “we’re not sure your solving a market need”
“we need help understanding your market” means :we don’t believe you will get the market traction you forecast”
“we want to talk about valuation” means “we’re interested but be realistic”
“sorry- it’s not for us” means “it’s a no today, but do come back to us in the future…it is never an absolute no forever”
“we’re excited by the opportunity” means “you are in the strike zone, and we want to do business with you”

February 2, 2012 | Techmeetups

Startup Masterclass

Startup Masterclass:
Behind the Scenes with VCs and Venture-backed Startups

The decision of taking your startup from early-stage to venture-backed will change the dynamics of pretty much everything in your company. How do you decide when you’re ready to seek investment? How do you make the most of your time with prospective investors? What can you start preparing for the transition? How can you work most effectively with the new board members joining your startup? When is the time to start thinking about an exit?

These are all difficult questions that only seasoned investors and entrepreneurs who have seen the day-to-day reality of life in a venture-backed startup can help you start thinking about. This Masterclass brings together practical advice on what you should be considering every step of the way and provide you with case studies of venture-backed startups which have been particularly successful.

This Masterclass is aimed at startup founders and to-be founders who are considering approaching investors as well as those who are already venture-backed and looking for real-life insights into growing their startup towards high valuation.

Agenda

6:00pm Doors open

6:15pm Alan Wallace, Octopus Ventures

“Winning the Hearts and Minds of Venture Capitalists”

Alan will explain what makes a startup special to a VC and what makes their current portfolio companies so compelling. He’ll also tell you what some of those terms VCs are famous for saying *actually* mean.

7:00pm Andrey Kessel

“Case study: getting to a $1bn startup”

Andrey will present the story of Solexa, a DNA sequencing company that achieved huge success as a business and raised significant amounts of cash in the process. Andrey will tell the “behind the scenes” story of how this tremendous company came to achieve a valuation of over $1bn.

7:45pm Mark Davis, Kohort

“10 Things You Need to Know About Fundraising”

Mark has been on both sides of the table as a VC and a startup CEO. He’ll be running through things a textbook will never teach you: the mindset you need to adopt to be a successful fundraiser and sharing tips on how to do venture maths, decide between debt or equity, and how to play the game to gain maximum interest from investors. Mark will join us via video-link from New York.

8:10pm Ryan Kiskis, BaseKit

“You’ve got seed funding… now what?”

Drawing upon a wealth of experience, Ryan will take you through what A/B investors will be looking for, what you should consider when raising later rounds of funding and how the extra investment will affect you and your team.

8:30pm Networking & drinks

About the speakers

Alan Wallace, Investment Director, Octopus Ventures

Alan focuses on sourcing deal flow, evaluating and assessing potential investee companies and portfolio management. He has represented Octopus on the boards of True Knowledge, LoveFilm, Zoopla, Steribottle, and PrismaStar.

Prior to joining Octopus, he held senior marketing and general management positions at Sara Lee UK Ltd, Rank Hovis McDougall, and Cambridge Nutrition Holdings Ltd. He was also managing director of Dairy Crest and Premier Brands (Hillsdown) and Market Planning Director for GUS. He has over fifteen years’ general management experience.

Alan has a PhD in Management Science from Manchester University and graduated with a BA in Economics from Liverpool University.

Andrey Kessel, Entrepreneur and Investor

Andrey’s experience is a combination of investing into and working in startups. He is currently spending his time working with early stage companies, venture funds, incubators or interesting venture opportunities. Previously, during his time with Amadeus Capital Partners, one of blue-chip venture funds, Andrey has worked as an investor and Board member with a number of investments, mergers, exits, company development, etc. Prior to Amadeus, Andrey gained substantial operational experience in technology start-ups, which covered most aspects of establishing and running a business, business development, managing offices, teams or projects.

Andrey co-founded several startups and is a shareholder and/or advisor of several companies and investment funds.

Mark Davis, CEO & Co-FOunder, Kohort

Mark is the CEO and Co-Founder of Kohort. He is also a Venture Partner at High Peaks Venture Partners. He blogs (mpd.me) about starting companies and financing them & his posts have been syndicated on Inc, WSJ, PEHub, Mashable, Business Insider and more. He has also started numerous communities for entrepreneurs including the Columbia Venture Community and the New York Venture Community. You can read more about him at about.mpd.me. Follow him on Twitter @mpd

Ryan Kiskis, VP Product, BaseKit

Ryan joined BaseKit in 2010, where he has helped create the product management team and guide BaseKit through its rapid commercialisation. He has helped BaseKit raise 2 rounds of funding from leading investors Eden Ventures, Nauta Capital, NESTA and Seedcamp.

As technology entrepreneur, his career has been focused on helping growing companies with product management, business development, strategy definition and operational management in Silicon Valley. Prior to BaseKit, he was founder and CEO of Martini Media, now the leading network targeting the exclusive audience of affluent enthusiasts online. He built the team and led the company through Seed and Series A funding from 2007 to 2009. Martini was founded out of his time as an EIR at Venrock Associates while doing research and due diligence in the digital media space. Prior to Venrock, he led product management for Xfire, the largest community of online PC gamers, from shortly after launch through multiple funding rounds and its eventual acquisition by MTV Networks in 2006. Ryan began his career with BearingPoint in product & customer lifecycle consulting.

Ryan has an MBA from Stanford University with a focus on Global Management, and a BSE from Princeton University in Mechanical & Aerospace Engineering.

Join the London Silicon Roundabout Meetup Group to take advantage of LSR-Member discounted tickets! Click on the button below:

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Twitter: @TechStartHub

Hashtag: #TSHclass

January 12, 2012 | Techmeetups

Startup Masterclass: Want to build something of value? Think of Content, Community & Analytics

When: November 28, 2011 (Monday) 6:00 – 9:00 PM

Where: Innovation Warehouse, 1 East Poultry, 1st Floor, EC1A 9PT

If you belong to or run a tech startup, your website is going to be generating most, if not all, of your revenue. And because designing and running a website is no easy task, we’ve bought together 3 experts on content strategy, website analytics and community building to share their wealth of knowledge with you. By the end of the evening you’ll be armed with a list of tips on how to structure the long term growth of your website, what the website stats actually tell you and how to build a strong community that is engaged with your business.

AGENDA

6:00pm Doors open

6:15pm “Why your website can kill your business and 7 powerful ways to prevent it”

Presenter: Joanna Pieters

Old information, overstretched teams, dissatisfied customers, expensive tech fixes – just a few of the dangers you’ll face with a website but no defined strategy for managing your content. Joanna will show you how to put in place a structure that grows with your business and keeps your website, apps and digital communications doing what they need to: making you money, reducing your costs and keeping your customers (and staff) happy.

7:00pm “You built it, they came… now what? Analytics tips, free tools and ways to improve website performance.”

Presenter: Michael Theodoulou

It’s not the number of page views that is going to get you sales so Michael is going to take you through all the website metrics you should be keeping an eye on and what they actually mean. He’ll also share with you his list of the best free tools to use for optimising your website.

7:45pm “Building an engaged community round your website”

Presenter, Adam Baker, Blottr.com

Running a user generated content website requires a strong community and this is exactly what Adam has built with the highly successful crowdsourced news site Blottr.com. Adam will be sharing his experience and letting you know the do’s and don’ts of how to engage your users.

8:30pm Networking and drinks

SPEAKERS

Joanna Pieters, Founder & Lead Content Strategist, Alpha Content

Joanna Pieters is a content strategist, writer and speaker, and founder of London agency Alpha Content. A journalist turned publisher on some of the UK’s leading media brands, she has launched, relaunched and grown websites and magazines across numerous consumer and business sectors, from classical music to international finance. Her career spans small business, public sector and corporates, including IPC Media and the Press Association, where she was Publishing Director. She is an MBA from Imperial College, where she specialised in customer-focused strategy and entrepreneurship.

Michael Theodoulou, Web Behaviour Specialists and Tulkas Recruitment

Michael is an expert in Online Marketing for businesses of all sizes. His experience in Sales and Marketing in the Digital and Tech sectors began some 13 years ago at a Digital Agency providing website marketing solutions. He has since worked with well known brands such as Sage, MTV Europe, Daimler Chrysler and P&G, as well as being involved in a number of tech startups. Michael specialises in growing business through promoting and optimising websites using paid traffic, email and analytics, as well as building solid teams in sales and marketing functions.

Michael is currently involved in two companies, Web Behaviour Specialists (http://www.web-behaviour.co.uk), and Tulkas Recruitment (http://www.tulkas.co.uk), as well as offering freelance Pay Per Click consultancy. You can follow Michael on twitter here: @mtheodoulou

Adam Baker, Founder, Blottr.com

Adam is a technology entrepreneur based in London, UK. Adam started his career straight out of school and did not attend higher education or university. Later in life, at the age of 28, Adam completed an MA in Digital Media from the London Metropolitan University. At 23, Adam was the UK’s youngest publisher, responsible for a large media division for United Business Media before venturing out on his own and starting his first company. Adam has founded 3 internet companies, including his current business, Blottr.com. His previous companies are product comparison site NewNew.co.uk and the UEP group, a niche vertical search company. Adam founded Blottr.com in August 2010. Blottr is a user generated news service that enables anyone to capture, report, collaborate and discover news as they witness it, on mobile and web. In a relatively short period of time, Blottr has been the catalyst for citizen journalism in the UK, becoming the fastest growing news service in Europe. Adam is aged 37, a competitive mixed martial artist, a causal cook and a hopeless DIY enthusiast.

Follow us on Twitter @TechStartHub and join our discussions #TSHclass

November 15, 2011 | Techmeetups

Startup Masterclass

Investment, Company Structure and Marketing

On 24^th October 2011 we hosted our first Startup Masterclass on Investment, Company Structure and Marketing. We started running these Masterclasses to bring together startups and professionals who help startups to grow in one room.

It looks like the first attempt was a great success. We’d like to thank our speakers for delivering excellent presentations which we had so much positive feedback about from attendees:

Andrew Lockley

Simon Halberstam and Andrew Solomon from Kingsley Napley LLP

Chris Winstanley from Basekit

Also, our thanks go to the UCL Enterprise Society who kindly hosted the Masterclass in one of the university’s lecture theatres.

Slides are now available from the Masterclass here:

[button url="http://www.techstarthub.com/2011/10/27/tsh-startup-masterclass-10-things-you-must-consider-when-you-start-out-or-it-will-cost-you-later/" ]10 Things You Must Consider When You Start Out or It Will Cost You Later[/button]

[button url="http://www.techstarthub.com/2011/10/27/tsh-startup-masterclass-why-you-dont-need-investment/" ]Why You Don’t Need Investment[/button]

[button url="http://www.techstarthub.com/2011/10/27/tsh-startup-masterclass-introduction-to-marketing/" ]Introduction to Marketing[/button]

We’d also like to thank the attendees on the night – we were very impressed with how you were all very eager to learn as shown by the number of questions you asked our speakers!

Here are a few answers from our speakers to the questions from you:

Q: How do you value a business with zero revenue?

A: In one sense, your company is actually worth nothing. Remember that companies making no money being overvalued is what creates bubbles! On the other hand, a lot of investors these days might choose to invest in a startup because it has an impressive team. At the end of the day, though, it is *only* the valuation from your prospective investor that matters.

Q: We are a UK company with key interests in the USA. When we do email marketing to US-based leads, are we bound by UK or US law, or both?

A: You have to comply with the laws of where you are emailing to, not from (or we’d all be emailing from Brazil!)

Q: Would you advise doing a startup in the evening/weekends to start with? Are there examples of successful companies like this? What about if someone could spend 1 or 2 days a week if not full time?

A: It’s always advisable to do your research before you put all your eggs in one basket. Provided you concentrate on the correct activities during those 1 or 2 days and testing the waters in terms of the need for your idea, it should only be a good thing. However, if you spend that time building something that no one is going to buy, it’s obviously going to be time lost altogether.

Q: How do you decide on valuation and deal with valuation negotiation with friends/family angel investors?

A: A convertible loan is definitely best in such a situation especially if your startup is at such an early stage that it’s difficult to value.

We have more Startup Masterclasses coming soon, please visit us on and for more information.

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What attendees said about our first Startup Masterclass:

October 27, 2011 | Techmeetups

TSH Startup Masterclass: 10 Things You Must Consider When You Start Out or It Will Cost You Later

TSH Startup Masterclass: 10 Things You Must Consider When You Start Out or It Will Cost You Later

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Key points and highlights from Simon Halberstam’s and Andrew Solomon’s presentation “10 things you must do when you start out or it’ll cost you later”.

Beware of making pre-contract misrepresentations, you can land yourself in seriously hot water.

Make sure your website T&Cs are clearly visible to people or they may not stand up in court.

A private limited company structure is always advisable if you’re looking to raise cash or sell up later.

Always keep board minutes! An admittedly dull but absolutely necessary task.

Look into drag-along and tag-along rights in relations with your investors.

Create employment policy procedures and keep them up to date.

Incentivise your staff well, look into the EMI scheme.

Simon and Andrew’s presentation was part of TechStartHub Startup Masterclass: Investment, Company Structure and Marketing held last October 24 at University College London – Roberts Building. Another masterclass, How to Make Sure You’re Investment and Exit Ready, will be held at the same venue on November 8 (Tuesday).

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October 27, 2011 | Techmeetups

TSH Startup Masterclass: Why You Don’t Need Investment

TSH Masterclass - Why You Don't Need Investment

TSH Startup Masterclass: Why You Don’t Need Investment

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Key points and highlights from Andrew Lockley’s presentation “Why you shouldn’t raise investment seriously, it will kill your business!”

Take money from customers not investors for as long as you can.

Investment can really stifle your hunger for customer acquisition and, if that happens, are you really running a business?

Alternatives to raising funds: offer a service and develop your code base this way, build your product behind.

Alternatives to raising funds include managing cashflow better: pay slow, get paid quicker.

Cut your costs – £1 saved = £1 on the bottom line. This is unlike sales where you need to pay out a cost per acquisition so £3 of sales = £1 on the bottom line.

If you do raise investment choose investor first, investment second.

Very importantly: don’t waste money raising rubbish tech! Do your research.

Andrew’s presentation was part of TechStartHub Startup Masterclass: Investment, Company Structure and Marketing held last October 24 at University College London – Roberts Building. Another masterclass, How to Make Sure You’re Investment and Exit Ready, will be held at the same venue on November 8 (Tuesday).

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October 27, 2011 | Techmeetups

TSH Startup Masterclass: Introduction to Marketing

TSH Masterclass - Introduction to Marketing

TSH Startup Masterclass: Introduction to Marketing

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Key points and highlights from Chris Winstanley’s presentation “Marketing your Startup, a very short introduction”.

Charging monthly recurring fees can work really well – makes the purchase less of a decision.

Try testing different price points and see what it does to conversions – work out the price elasticity of your offering.

Look seriously into the freemium model, it’s a very powerful business model when well implemented.

Get free advice from other businesses – test the user journeys of successful websites like BaseCampHQ.

If a new feature stays on Amazon.com for more than a week you can assume it is because their team found it works. If a new feature disappears within a week, there’s probably a good reason, so consider seriously before emulating it.

Chris’ presentation was part of TechStartHub Startup Masterclass: Investment, Company Structure and Marketing held last October 24 at University College London – Roberts Building. Another masterclass, How to Make Sure You’re Investment and Exit Ready, will be held at the same venue on November 8 (Tuesday).

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October 27, 2011 | Techmeetups