Earlier this week The Semantic Web Blog gave you an in-depth look at the winner of the Semantic Web Startup Competition at the recent Semantic Technology and Business conference (see story here). Perhaps at next year’s SemTechBiz event, you’d like to be one of the startups in contention for the win – and some money might help you get there.
If so, then it might be helpful to troll through some of the advice that was offered in another session at the conference, which was attended by an audience who self-reported that they either were part of startups and potentially looking for funding, as well as others hoping to start their own venture in a year or so.
Here are some snippets to reflect on:
From Kevin Cheng, CEO of semantic personal assistant app Donna:
- The seed round is about pitching your vision, having a conversation, understanding where each VC is coming from and what they are looking for and seeing if there’s a match. “Not everyone is a match. You also want to see if that VC is good for you. It’s kind of like dating.”
- A lesson learned that other startups should consider following: Iterate really quickly. “We didn’t do that fast enough [at first] but we corrected that. If I could go back in time I’d iterate in much faster cycles than we did, even though there were 4 or 5 of us working versions of the product with very different UIs.”
- Always be learning and always be getting things done. “At the early stages, of 3 to 5 people or 1 to 5 people, every person on the team needs to be a doer. They should have enough to do for 80 hours a week, whether they are coding, designing or doing market research. Or if your product involves lot of potential partners or conversations with outside people that warrants an 80-hour week, then you need that person.”
From Dror Oren, executive director in the SRI Ventures team at nonprofit research institute SRI International, from which Siri Inc. and other ventures have spun off:
- Everyone gathered in the room at the presentation probably is very technology-focused, but come time for a funding pitch, put the spotlight on the product and business that comes out of that technology. “As a research organization we are by definition focused on technology, but we have heard VCs saying we don’t fund science projects. Make sure the technology is embedded so well it’s under the hood. Just make the product way, way better than other people can make their product.”
- It’s not absolutely necessary to have a business person on board your team, but it is absolutely necessary to have business sense. “Everyone should be thinking of that.”
From Jonas Lamis, co-founder of online crowdfunding site Rally.org:
- Rally.org’s experience in securing funding from Floodgate Fund started with the VC’s managing partner Mike Maples advising the team to come back when it had made some money. A year later, it had the stats on how many new rallies were acquired, how it was growing and at what rate, and seed funding from Floodgate. It didn’t get that funding because it had built a complex deck and presentation, but thanks to “building a relationship a year earlier and then going back to show it had executed.”
- One of the best places to find advisors or investors: AngelList. “A bunch of startup teams are registering startups there. Folks like me, small- time angel investors and business-savvy people, are happy to talk to you and maybe develop a relationship.”
From Mike Dunn, CTO of online car buying service TrueCar, whose past experience includes doing technical due diligence as part of very large corporate groups involved in venture investments:
- If you’re a very, very small startup with a minimum viable product and looking for investment, “the snarky answer is don’t take money if you don’t have to…Anytime you take in outside money, there’s a new voice in the mix telling you where to go. If you can self-fund initially, that’s a good step.”
- That said, if at some point it is a requirement to seek funding from an outside entity, “know exactly what you want to do with that money and be able to talk to that. Any VC will ask you what you will do with the money, [and you have to be able to answer] whether it’s adding staff, new customer acquisitions or building a new product mix.
- Other information you’d better be able to pull out of your back pocket: “Know the leaders in the market that you might be enhancing or displacing, …know what companies are similar to what you do and where the partner/coopetition side of the eco-system is.” Also be able to explain if you’re going after growth or money, and don’t be diverse in your business model. “Be very specific in how you address the market initially and what the focus will be.”