Archives for category: pitching

About 6 months ago I heard a presentation given at Campus London by Daniel Kraft from Singularity University.  A similar presentation from him can be found as a Ted Talk.  The talk blew my mind away and opened it up to the amazing possibilities facing the medical world from the exponential growth of several technologies in parallel.  The combination of low-cost gene analysis, improved computerised bio-informatics, robotics and increased connectivity will revolutionise the way we interact with medicine.

The amazing growth and connectivity of technologies such as connected digital medical records, robotic surgery, nano-medicine and genomics will provide us with a health eco-system that will allow greater emphasis on preventative health and re-direct medical budgets on improving quality of life rather than focusing it on the last few years of a patients existence.

Health services the world over struggle to deal with a variety of problems; increasing cost, unfavourable demographics, access variability, fragmentation, waste and the slow adoption of technology.  Technology can have a positive impact in addressing all these issues.

The increasing power of the smartphone alone is providing a new and increasing range of innovations. It is already possible to test for STDs, blood sugar levels and many other symptoms using sensors or patches linked to smartphone apps. Graphene patches will be even smaller and cheaper.  We are seeing a massive increase in the adoption of quantifiable self solutions. The popularity of wearable wristbands and smart-watches allow us to monitor our health in realtime and take preventative actions. It will not be long before clothing will incorporate sensors that will monitor all aspects of our health and warn us of any problems.

Another area of huge change is in imaging, which is getting increasingly faster and provides far higher resolution. This enables improved diagnosis and supports the surgeon in decision making.  Advanced robotics also provide surgeons with the tools to conduct operations that would not previously be possible.  This can be combined with internet connectivity to allow sharing of information by surgeons during surgical procedures.  Technologies such as augmented reality and even motion detection have potential in medicine, for example in detecting or monitoring stroke victims.

Medical scientists are also carrying out extremely advanced research on devices that allow brain-computer interface as a means for helping quadriplegic patients to restore certain functions.  Artificial retinas will help restore sight and robotics are either replacing or augmenting limbs.

The reduced cost of the genome sampling to less than $100 will allow us to predict the likelihood of developing certain hereditary disorders , this combined with environmental data, and will allow us to take preventative actions.

In general, technology offers the possibility to bring a new approach to medicine that focus resources on prediction and prevention, bringing a higher level of personalisation and participation.  In so doing, technology will increasingly help to empower patients, enable physicians and enhance wellbeing.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

 

laserStartup founders are like elite athletes. They drive hard to acheive high performance or they don’t make the grade. We all know that the chances of survival for an early stage tech startup are extremely slim. The only way to improve the odds is to focus 100% on doing the right things. You need to do more than just read The Lean Startup. You can apply similar principles to every aspect of the business. We have helped over 500 startups over the past 3 years and have found that the following tips can make the difference between failure and success;

  • Do you have what it takes? - Are you the type of person who can focus 100% on one thing? Are you able to work 70 hour weeks for months on end. Great founders do not have to be academically accomplished. They do need to be able follow a vision with single minded passion and execute their ideas effectively. Founders should look very carefully at themselves and decide if this is what they want. Remember there is no safety net and no opportunity to take your foot off the gas.
  • Take on focused people - It’s no good being the only one in the team that is prepared to work. Find people who are equally committed and will share in the pain. Look for people who are better than you and who can complement your skills. There is no room for ego’s, either theirs or yours. The team needs to focus on getting the job done in the most effective way possible. Look for good product, UX and technical people who will keep the startup on course and make sure that their rewards are aligned to achieving a successful outcome.
  • Follow the right advice - Accurate and focused advice is like gold-dust but it is often extremely hard to access. Poor advice is worse than no advice at all. Start by accessing reputable online sources such as Steve Blank, Eric Ries, Paul Graham and David Rose. Don’t spend too much time on conceptual works like Crossing the Chasm. Remember this is all about focusing on practical solutions. Look for advisors with deep sector or technical knowledge but watch out for ‘consultants’ who may not be up-to-date with current business models or technology. Be very hard on potential advisors, even if they come through a programme such as an accelerator. Who you listen too is extremely important. It’s always a good idea to engage with people who have been there and done it before.
  • Keep the product simple – Products are becoming simpler. Uber, Airbnb and snapchat are all single function tools designed to solve easily identifiable problems. The Lean Startup helps here. Make sure you are solving a real issue that other people agree is a problem and will pay to solve. Obsess on this and validate rigorously with an MVP until you have a business model that works. If you can’t find one, fail fast and go back to the drawing board. Don’t pump capital into an idea that hasn’t been thoroughly tested.
  • Practice lean funding – Narrow down your routes to funding. Most founders spend months talking to investors who are never going to invest. Understand who is right for the stage you are at and has the right sector focus. Make sure you are talking to real investors and not consultants. Check that angels are currently investing and not invested out.

So do a startup effectively is all about keeping it as simple as possible. Strip down everything to the raw essentials and focus on these at all times. Avoid scope-creep where nice-to-have functions take over from the core propositions. Don’t engage in protracted partnership discussions during the early phases and be generally cautious  about offering meetings unless they get you closer to achieving your immediate goals. It’s easy to be be flattered into taking a meeting but it often takes your eye off the ball. Maintaining laser sharp focus for you and your team will greatly improve your chances of startup success.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

 

 

Angel investment is the biggest source of early stage capital for early stage tech startups.  Angels are generally high net worth individuals who want to put a proportion of their wealth into funding entrepreneurial businesses. They have a number of motivations including financial, intellectual stimulus and entertainment. It is crucial to understand how to interact with this important group. Following these tips will improve your chance of receiving the investment you seek and closing your funding round as rapidly as possible;

Make sure you are investment ready – It is now rarely possible to obtain investment for idea. Investors have a choice. They would rather reduce their risk by investing in a strong team than simply a good concept. Make sure that you can prove product/market fit before approaching angels.

Have a great investor pack – The central document is the pitch deck. This needs to clearly convey the proposition. Investors receive large number of pitch decks every week. Only the very best will stand out and get their attention. Make sure that the key points are covered in the most concise way possible. Dave McClure of 500 Startups has produced a good template deck to use as a guide. You will also need a one or two page executive summary. This can be sent in an email to stimulate initial interest.

Be realistic about valuation – Angels will see it as a sign of naivety if you seriously over-value your startup. The valuation of startups prior to revenue generation is tricky but you can look at how other companies are valued at a similar stage and use this as a guide. You should be able to back up your valuation with data.

Research your potential angels – You can find a lot of information online on platforms such as linkedin. The objective is to determine whether you are dealing with a genuine angel or a consultant. Once you are sure you have a real angel you will need to check that they are currently active, what they invest in and how much they generally invest. It is often a good idea to ask these questions directly. Most genuine angels will be happy to answer with relatively detailed answers.

Let everyone know that you are fundraising – Get the word out that you are fundraising. Word of mouth is very powerful. Although it is important to let people know that you looking for funding, don’t bombard everyone with pitch decks or exec summaries. Save these for the angels that you know will be interested in your specific proposition.

Understand how angels work – Most angels invest in groups and put relatively small amounts of investment into a large number of opportunities. Although you might be lucky and get a single angel to invest the full amount, this is extremely rare. It is therefore important to tap into existing networks of angels who will trust each others judgement in backing your startup.

Find a lead angel – It is very important to find an angel who will lead your funding round. This angel will help set the term-sheet and will take some of the burden of dealing with multiple investors. Pick someone who brings credibility with their reputation in your sector. They will also often bring an established network of contacts, including co-investors and potential clients

Use multiple channels - Explore all the obvious channels. These can include angel networks, funding platforms and successful entrepreneurs who have sold businesses in your sector.

Get referred – It is often easier to approach a potential angel through a trusted third party than directly. Angels are often sitting on a large pile of business plans and look to third parties to filter the best deals for them.

Ask for advice - It is a truism that; ‘ask for investment and you will get advice and if you ask for advice you will get investment’. The indirect approach is often more engaging and will usually deliver better results. Follow this approach with potential investors who you have met at networking events or with cold emails.

Remember that angels are just normal people. They come in all shapes and sizes and from a very wide range of backgrounds. Try to find out what really excites them. Many are ex-entrepreneurs who what to stay connected with the latest innovations and enjoy the thrill of investing with friends and colleagues. You will greatly increase your chance of getting investment by understanding their drivers and adjusting your approach accordingly.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

 

 

 

We are on our way to 4YFNbarcelona images a major startup event being held in Barcelona from 2nd-5th March and devoted to innovation in the mobile and digital Eco-system as part of the Mobile World Congress. We will be doing our bit for the UK economy by presenting a workshop; London Calling – Why Move Your Startup to the UK. 

As well as delivering this workshop we have a couple of other objectives for the week;

Startup talent Scouting – We are always on the lookout for the very best early stage tech startups in Europe. London is currently a great place to launch and we would love to tell you more about the advantages.  If you are interested in making the move to the UK we can provide support through our regular Dreamstake Academy at Google Campus. Once your startup is ready for investment we will connect you to angels or venture capital firms through our matching platform. We are on the search for all types of high growth potential internet startups, especially those with a mobile UX.  If you are a founder with a strong, technically oriented team and a highly scalable business model, please connect with us.

Meeting early stage tech investors – We have built a database of over 1,000 European tech startups.  The UK Government has provided great incentives by introducing significant tax breaks. These help investors to greatly reduce risk, whilst building portfolios in some of Europe’s rising stars. We are looking for either experienced tech investors who want to lead funding rounds or less experienced investor who would like to engage in this exciting sector.

So if you are visiting Barcelona this week, as either a startup founder or an investor, please reach out. It would be amazing to meet and discuss ways in which we can work together.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

logo squareStartup funding is all about timing. Founders do not always make the connection between the Lean Startup methodology and the funding cycle. However, it is important to recognize that there is a clear link between reaching certain lean startup milestones and the type of investment available. Failure to recognize this will lead either to burning cash too early in the cycle or being starved of adequate finance later on.

Problem/Solution fit – It is vitally important to establish that there is a market for your idea. Does it solve a real problem and do other people agree that it is a problem worth paying to solve?  There is little point in expending too much money to establish this. Founders should achieve as much as possible using questionnaires and a range of other tools that don’t involve building expensive  tech. This is the phase that would traditionally be self-funded or at most involve a few friends or family members. The accessibility of new sources of capital such as crowd-funding does not reduce the need to prove product/solution fit before using other peoples’ cash.

Product/Market fit- This is the phase where the initial technology is normally built. Lean states the importance of building a stripped down prototype to test the main business model. I believe that there is some justification in raising small amounts of capital to fund this stage. Capital is needed both for the technology and to provide enough marketing resource to engage a reasonable sample of target customers to test assumptions. The usual way to fund this stage is through single or groups of angel investors. In the US, startup founders are able to raise sufficient funding to robustly test the business model and prove they have product/market fit. In the UK there is a challenge that founders will fail to raise enough to fund this stage through to a conclusion. Unfortunately, this leaves them limbo, having burned  through a seed round and still not ready for VC funding.

Scaling – Founders should not seek funding to scale a business until they have proved that the business model works in practice. Once it has been established that the business model stacks up and that there is a large global market for a product, VC funding can be sought. Deploying capital before proving product/solution fit is known as premature scaling. In simple terms it means that the investors are pumping money into a proposition that remains unproven. The key is to establish a position to demonstrate that your startup has achieved traction in a profitable and repeatable manner. VCs are good at assessing whether startups have achieved traction and will not provide funding if they don’t believe a business is ready to scale.

Founders should be aware of the type of funding available at each stage of the development of their startup. They should avoid taking excessive funding too early in the cycle but should also avoid falling into a gap where no-one will fund later on. Crowd-funding and Government tax breaks may have exasperated this issue by providing access to easy capital and over-valuing unproven propositions. The key is to schedule your funding requirements to achieving specific milestones.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

 

There is an old saying that the VC’s in Silicon Valley will only invest in companies less than an hours drive from their office. This highlights the personal nature of the startup investment world. Investors want to be very hands-on with their portfolio companies. This is a model that has been replicated all over the globe. However, the internet is transforming every industry and it is slightly ironic that the investment community has been slow to embrace the technology they invest in. Platforms are starting to have a profound effect as they dis-intermediate some of the current players.

Venture Capital funds are under pressure from investors due to their high management fees and lack of accountability. Investors in VC funds are only in a position to judge performance after an extended period of up to 10 years. Such funds are becoming more vulnerable to competition. VCs are increasingly moving later stage with each new fund they raise. As funds grow larger, their managing partners gravitate towards making a smaller number of investments. This allows them to deploy their resources more efficiently over a a manageable number of portfolio companies. This is opening up a gap below Series A which will increasingly be filled by platforms.

At the lower end of the scale, Crowd-funding platforms are already having a major impact. In some countries such as the UK this is combined with strong government incentives for smart angels to invest on an individual basis. This provides an alternative to the friends and family round. At slightly later seed rounds, professional funding platforms such as Dreamstake are nibbling at the VC space by facilitating syndication. This is already transforming the industry, with Angellist raising over $100 million for startups on their platform in the last year.

Naval Ravikant, the founder of Angellist is not going to stop at simply syndicating angels. He has his eyes on the larger institutional investors that cannot currently invest in early stage startups because the transaction costs are too high. However, platforms can effectively manage portfolios on behalf of these global giants.

Platforms have the potential to reduce transaction costs and bring efficiencies into the market. They allow startups to attract individual investors directly into online deal-rooms with standard term sheets. This simplifies the investment process and avoids heavy management fees.

To summarise, VC funds face competition from individual angels investing in syndicates on platforms and from larger institutional investors who will use the same platforms to reduce transaction fees and make investing in high growth opportunities more accessible to them.

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. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every last Monday of the month.

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.

 

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.

 

 

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.