Archives for the month of: September, 2014

This is not another blog about presentation skills. It’s not about style over substance. It’s about how to convince an angel or VC that you are the team to back. Most investment is a result of one-to-one meetings in investors offices. So the ability to stand up and present is not the point. However, it is important to concisely cover all the main points and come across really sharp;

- The problem – Say clearly and concisely what problem you have chosen to solve and give evidence that others consider it a problem worth solving.

- The solution – State how you intend to solve the problem and why people will switch from their current solution.

- The market – Give an estimate of the total addressable market, predicted growth rate and the portion that you can realistically win.

- The business model – Be clear about the business model that you are going to test and how you will define success.

- The Execution plan - Describe the major project milestones.

- The team – Be concise about the team members and advisors. Even if you are still in the process of building a solid full-time team don’t make it look like it’s a loose collection of random people. Make sure you bring out why your team has specific advantages in executing the project.

- The competition – Don’t say that there isn’t any competition. It suggests that there isn’t a problem worth solving. Mention substitutes as well as existing solutions.

- The financials – Give a clear summary of the major components. Don’t obsess with the details but be ready to justify any figures that you give.

- The funding requirement – Give exact figures (not a range) and link to clear milestones (like proving Product/Market fit). Say how much equity you expect to give in return.

Keep the presentation down to 10 minutes and allow plenty of time for questions and answers. Don’t be woolly or over complicate.  If you are finding it difficult to convey the story in a concise manner it is probably because you haven’t nailed the proposition and you shouldn’t be pitching yet.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Join here Dreamstake.

 

Video is a great way to showcase a product or service and to create a visually stimulating overview of the benefits your startup is trying to sell. We are all used to video based content being a linear experience focusing on presentation rather than personalisation. I’m a filmmaker by trade and interested in the versatility of moving images. 

With increasing popularity of a new involvement driven film genre known through the work of Digital Media Company Interlude, producers are looking for new ways of curating content. This has opened exciting opportunities for customer engagement and introduces consumers to ‘A New World of Storytelling’, as phrased on the Interlude home gage.

Dive into the world of interactive storytelling by switching between a shopping TV presenter and a random guy on the bus signing Bob Dylan’s ‘Like a Rolling Stone’ http://video.bobdylan.com/ or choose your favourite L’Oreal hair style http://www.lorealparisusa.com/en/Beauty-Library/Tools/Choose-Your-Style.aspx

Keep it Brief, Clear and Relevant 

Video is clearly moving away from a ‘one size fits all’ approach. So, why force a potential customer to watch a 3 to 5 minute video about your company’s entire product range? I presume that you would gain more user insight by knowing what product or service your customers are most interested? 

A New ‘Pirate Metrics’ to Measure the Success of your Products

I’m the founder of two startups, which both explore innovation around video production and delivery. My latest business idea is a video-authoring environment that enables to easily create interactive, user driven product videos with embedded analytics. Based on the assumption that businesses do not just want to find out how many people have watched their website video, we propose a meaningful metrics around video for measuring user engagement.

Our aim as business owners is to deepen the relationship with our customers and to make sure they return. The answer is easy! Interactive video provides opportunities for social media referrals and can encourage instant reaction. Rather than separating the action from the context, the call to react could be embedded in the story by asking the viewer to buy an item now, to watch a scene that provides more information or to view a related product. 

Storytelling Marketing and Context Based E-commerce

This introduces a new way of visual storytelling marketing and context-based e-commerce. Why not ask your customers to vote for their favourite colour or version of your product? Why not test a new product line through a video story? Or ask your users to send videos of themselves using your product? An interactive authoring tool would enable you to easily use crowd-sourced footage to provide another viewpoint, which audiences could switch to. 

Help us now to get a better understanding of how startups use product videos by completing our brief survey and get the opportunity to win a free interactive pilot video.  https://www.surveymonkey.com/s/PHN6MSN. We will select 3 participants, for which we will produce a short interactive product video. 

 

Post by Melanie Moeller – Founder of Sophrosyne Productions and Digital Media, a startup that develops cutting edge solutions that combine film and technology to create new media formats. [email protected]

Besides her background in media production, Melanie also has experience working in software development (BBC News and BBC IPLayer) and has been involved with teaching and training for more than 6 years. She regularly runs workshops, facilitates creative sessions and gives guest lectures at universities in the UK and abroad.

 

You have put together a strong team to execute on a great business idea for a tech startup. You have probably invested a small amount of your own capital to create a Minimum Viable Product (MVP) and you are now ready for capital to test the market. Crowdfunding or Accelerators might look like attractive solutions but are they right for tech startups and is there a better solution?

The tech startup world is growing up. Both founders and investors now have a clearer picture of the process that a startup should follow to maximise the chances of success. Funding rounds are starting to align around certain process milestones such as ‘proving product/market fit’ and ‘scaling globally’.  Smart Angels and VC’s are very good at ensuring that founder teams have the capability to execute against these critical milestones. In other words, they allocate capital against clearly defined objectives.

The problem with (equity based) crowdfunding is that it is too easy for poor teams with untested propositions to access capital. This sets the wrong expectation and will lead to a very high failure rate and inability of most to get follow-on funding.  Accelerators also struggle to compete for quality startups and are an expensive and time-consuming way to access very small amounts of capital.

Luckily, there is more smart capital available for quality startups than ever before. The trick is how to access it efficiently. The funding cycle is often as long as 6 months. This can be shortened by knowing who invests in what.

Funding platforms like Dreamstake, are able to determine the maturity of each startup and match them with the appropriate type of investor. This is achieved using a ratings algorithm and a physical program of workshops, bootcamps and other events to get the founder teams up to scratch.

So if you have a great startup, think carefully about your funding options and go for smart money whenever possible. This will make your startup more attractive at later funding rounds and give you access a far greater level of support and contacts.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Join here Dreamstake.

Tech startups definitely need high levels of support in the early days.  At the very least they must have a place to work, some good advice from experienced mentors and access to capital. However, this presents a conundrum that many have tried to solve in the past. How do you help promising startups before they start generating revenues to pay the bills?  VCs have often been portrayed as the villains of the piece. However, the good ones make their terms clear and have been behind the success of many great startups. They are a highly valuable part of the startup eco-system.

Here are some less obvious sharks;

- ‘Startup friendly’ workspaces – It is highly valuable for startups to co-work. This enables them to share ideas and resources. However, it pays to remember that property people will squeeze the greatest possible revenue from every square foot of of office space. Most co-working spaces in London are unsuitable for pre-funded startups. Check the small print as they either offer relatively high desk rental or unrealistic fair usage rules. It may be far more practical to camp out in the office of a more mature startup.

- Consultants dressed up as investors – Check on who is offering you advice at networking events. If they claim to be an investor ask how much they are able to invest and give examples of past investments. If they offer a coffee to discuss your startup, check their linkedin profile before agreeing, otherwise you will find that they will next ask for fees.

- Unsuitable Accelerator Programs - Y-combinator and Techstars have both had a positive impact on the startup scene. In the right circumstances accelerators can still be useful. However, look carefully at their terms and success record and choose one that has successfully secured high levels of funding for their cohorts.

- Tech conferences – The big tech conferences are aimed at corporate folk with plenty of cash to pay the entry fee. They try to lure startups with the promise that they will meet investors. If you can afford $2000 to watch Mark Zuckerberg then go ahead but if you expect to meet investors for your early stage startup, think again.

- PR agencies - These are rarely a good idea for startups before they are ready to scale and have significant investment. Agencies will not link their fees to performance. Paying a monthly retainer with little chance of success is a bad idea.

There are a lot of well-meaning supporters in the startup eco-system but do remember that everyone has their own motive for helping. The good guys will defer their fees until the startup starts to achieve success or even provide sponsorship. Make use of free resources and bootstrap like crazy until you are sure you are ready to scale.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online tech startup platform that matches founders with the most appropriate investors. The unique startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support when it will make the most impact.

 

 

London has established itself as a great place to build a fashion technology startup. The fusion of a vibrant fashion sector with a growing tech scene makes the city an obvious place to launch. Funding fashion technology is a very different from investing in fashion designers.  It is more like funding a traditional tech business but with a few subtle differences.

Fashion tech is very diverse - The sector spans both software and hardware; from e-commerce, image recognition, artificial intelligence and big data through to wearables such as Google Glass or Fitbit.  Some of this hardware based technology is more capital intensive which may deter certain investors.

Fashion tech is sexy - This means that everyone wants a slice of the action. The scene is highly competitive and there are many look-alike products. Fashion tech startups need to be very good at marketing to get noticed and should enlist celebrities to get noticed. Investors should invest in startup teams that really understand the industry

Fashion e-commerce is big - Fashion is the fourth largest global market. Everyone wears clothes. Even relatively simple e-commerce businesses like Net-a-Porter and Asos have been very successful. Companies such as Lyst have secured significant investment and are expanding rapidly.

There are still problems to solve - This is an opportunity. However,  the problems are not trivial. On-line sizing remains a challenge and ordering through affiliate networks on mobile is very cumbersome and not easy to solve. Twotap and UB are both interesting startups working on this.

There are still plenty of business models to explore -  Startups such as Farfetch and Rentez-vous are stretching the e-commerce boundaries and exploring new models. However, it is a dynamic sector and there will be many other new models such as tinder for fashion from Grabble.

Design is important - This is a sector where style is crucial.  The early fashion tech startups were launched by geek teams and failed to gain traction.  Graphic design, UX, photography and video all have be to professional quality or the brands and consumers will not engage.

Smart money is very useful in this sector.  The fashion industry is closely knit and insiders can open doors very quickly. Most of the major tech VC’s have experience with at least one fashion tech startup.  Founders should ensure that their startups are investment ready before seeking funding. This means, making sure the product looks good and solves real problems in a user friendly way. Make sure the team is strong and includes at least one member with fashion experience.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online tech startup platform that matches founders with the most appropriate investors. The unique startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support when it will make the most impact.

 

There is little doubt that there is a greater availability of seed capital than ever before.  Although it is tempting to access low level funding through crowd-funding and accelerator programs, does it really make sense? If you are building a high potential tech startup it is important to aim for the best funding solution possible because it will have a real impact on future success. VC’s and other smart investors have responded to greater competition for quality deal-flow and will now get involved at an earlier stage than previously so as not to miss out. Don’t assume that crowd-funding and accelerators are the only options.

Here are a few ideas to think about;

- Rather than take a half baked idea onto a crowd-funding platform in the hope of attracting naive investors, obsess on nailing the proposition and make it attractive to smart investors. No-one knows the impact that equity-based crowd-funding will have on later funding rounds but my guess is that the best startups won’t take this route.

- Think carefully before going onto an accelerator program. Can it really accelerate your launch or does it just add 14 weeks? Many accelerators take too much equity in return for a very small amount of funding. Be aware that you may come out of the accelerator with less equity and no follow-on funding.

- Be cautious of paying up front for contacts. Pay-to-pitch is a rip-off and the big tech conferences are simply expensive pay-to-pitch events.

- Don’t assume that corporate money is always a good thing. The large firms sitting behind various programs are not looking to help you disrupt their business models. Although it can be good to get early revenues from corporate clients, be sure that they don’t come with too many strings attached.

There are no shortcuts. Availability of quality funding relates directly to the quality of the team, viability of the proposition and  eability to execute. Spend time getting these things right and bring on-board some smart advisers. Target lead investors who will add-value to your startup from the start.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online tech startup platform that matches founders with the most appropriate investors. The unique startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support when it will make the most impact.

As the new term of Dreamstake Academy kicks off next week we are reflecting on what we have learned from all the great workshop speakers over the past couple of years. It is particularly important to have a strong sense of vision.  This often translates  into having a burning need to solve a big problem. At the early stage it is important not to fixate on ‘the idea’. Once you are sure that others will benefit from your vision the next stage is how you execute a solution. Here a few tips for making this process a success;

- Validate that other people share your problem.  It is very easy to fall into the trap that because you experience something as a problem, other people feel the same. A problem has to be big to support a tech startup and often has to extend across geographic boundaries. For example in the US companies still cut cheques to settle invoices.  A fintech startup wants to solve this problem by providing a payment solution. Of course, the problem doesn’t even exist here in Europe.

- Validate that people will pay to solve the problem. It is important to check that people care enough about the problem to support a business model. Many startups have to test several business models before finding one that works. Freemium models are great providing people see the value in upgrading. They also demand a large user base. Experiment with different business models until you find one that works.

- Build the resources to execute. This is why it is so important to have a strong vision. You will have to inspire others to join you and you will most probably not be able to pay the going rate. Don’t be tempted to go it alone. Be realistic about the resources that you need to make the startup a success and work out how you will fund them. You will almost inevitably need to bootstrap at first. However, bootstrapping does not mean doing everything yourself. You still need to acquire skill sets from others. Deploy the right resources at the right time. Don’t jump into development without validation of the idea and definition of the UX.

To summarise, focus on the vision and execution. Don’t obsess on individual ideas. These will often change over time. The art is to get others to buy into your vision. Ultimately, this means team members, investors and customers. If you can’t do this, you may have chosen the wrong problem to solve. Fortunately, there are some great tools to help keep this process on track and we will share them during the next term.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online network, that provides end-to-end support for entrepreneurs wishing to get a tech startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support at the appropriate time. Dreamstake Academy is a free to attendee startup school that focuses on teaching Lean Methodologies for tech startups.

 

Unless you are already a tech investor the whole tech startup scene might appear to be a crazy lottery. However, there is little doubt that more people than ever would want to get involved if only there were ways to manage the risk. We believe that things are changing and there are many reasons to take a new look at this exciting sector;

High reward – In the past the risk has often outweighed the reward. It is still prudent to diversify risk across a number of investments and to ensure that tech only forms a small part of an overall investment portfolio. However, the up side is certainly very attractive and tax breaks such as the UK Government SEIS scheme provide huge tax breaks that considerably minimise the downside.

Easy to make an impact – Tech startups are sometimes described as, ‘high growth, low capital intensive’. This means that small amounts of funding can deliver startling results. Tech startups by their very nature are often disruptive. It is satisfying to see the impact they can have on established industries.

The startup process is well understood - In recent years the startup process has been well documented by books such as ‘The Lean Startup’ by Eric Ries.  Successful founders follow the steps religiously. This means that it is easier to track progress and invest at the different stages.

The rise of platforms - Crowd-funding platforms promote startups and bring access to investment opportunities. Platforms such as Dreamstake go one step further and provide ratings and support services. This enables investors to manage their investments more effectively.

Specialist funds – It is now possible to diversify your risk by investing in an SEIS/EIS fund such as FOMcap.

So if you have been thinking about getting involved in the tech startup scene but have not known where to start, take another look.  It may be easier than you think.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online network, that provides end-to-end support for entrepreneurs wishing to get a tech startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support at the appropriate time.

 

 

It’s already September and the investor community is back in town after their summer holidays. There is little doubt that the smartest investors will be on the search for the best startups.  They will be evaluating risks in many different ways but the excellent framework provided in ’11 Risks VC’s Evaluate’ by Tomasz Tunguz gives a good clue to the way they think. Take your startup back to school and try to minimise some of these risks;

Market timing risk – Do your research thoroughly to check that there is an appetite for what you are going to offer. Being too early is as bad as being too late.

Business model risk – Test one business model at a time. Multiple revenue streams are hard to measure. Fail fast and pivot if necessary.

Market adoption risk – Check out the likely competition and be sure that it’s not too easy for a Google or Facebook to steal your market.

Execution risk – Look closely at your team. Make sure that it covers all the bases and will inspire confidence in your investors. Be brutal. Without a good team you will not get investment.

Technology risk – Don’t try to re-invent the wheel. Use standard components when available. However, IP is sometimes important to minimise the chances of copying. Just be sure that what you are offering is possible.

Capitalisation structure risk -  There needs to be enough equity to share amongst investors and employees to keep them all motivated. Watch out not to give too much away early stage to crowd-funding or accelerators.

Platform risk – Make sure that you are working with the major platforms and not in competition with them.

Venture management risk-  This is all about how receptive you are to advice and how open you are about the state of play. Investors are looking for founders who listen and are positive to feedback.

Financial risk – Early stage investors don’t expect hugely detailed spreadsheets but they do want to be sure that you have given thought to the funding you need to meet each milestone. They will be turned off if you under-estimate your requirements.

Legal risk – Involve a lawyer early stage to ensure that there are not any unresolved issues. Investors hate surprises and will be looking for likely patent infringements and employee/co-founder issues. If they find these and you have not disclosed them it will lead to a severe breakdown in trust.

In summary, think like an investor and cover off all these risks. If you are not sure how we will go into more detail with the new term of Dreamstake Academy which starts on 15th September.

Blog by Paul Dowling – Co-Founder of Dreamstake  an online network, that provides end-to-end support for entrepreneurs wishing to get a tech startup funded in the shortest possible time. The startup rating system allows entrepreneurs and investors to monitor startup progress and inject capital and support at the appropriate time.