Personalize your outreach if you want a response As soon as I added “angel investor” to my LinkedIn profile, I was suddenly blessed with an abundance of people who wanted to be my friend. Every day, I get at least a dozen messages offering the opportunity to invest in exciting new startups. A bunch more new friends reach out to me by email. The ones who do their investor outreach right get my attention. The ones who don’t get a generic response. Most angel investors don’t bother to respond at all. Founders are frustrated that they get no replies from investors. Investors are frustrated wi ..read more

Know where you shine and where you need help to lead a startup from inception to IPO As startup founders, we all dream of that day when we ring the bell on the NASDAQ as our company goes public in an IPO. While waiting for those first customers to call, I imagined myself featured in the pages of the Wall Street Journal, my face on the cover of Fortune, the organizers of Davos flying me on a private jet to give a keynote speech. But even if my startup does one day make it to IPO, I won’t be the one ringing the bell as CEO. I’ll be standing next to him or her as founder, and my greatest decision ..read more

To be successful, avoid these common first-time founder pitfalls When I first learned to drive a car many years ago, my father would point out things to watch for, like a driver likely to swerve into my lane or a car in front of me about to hit their brakes. After years of driving, you develop a 6th sense for danger, he told me. Although I was annoyed by his constant backseat driving, he was inevitably correct. The same is true for running a startup. After building 5 startups over 25 years, the unexpected becomes expected. I’ve become so used to anticipating pitfalls, that I expect every found ..read more

Market size is crucial. Most pitches get wrong. “Our new product will disrupt a $47.9 billion dollar market growing at a CAGR of 7.3%.” Listening to early-stage startup pitches, I’m constantly bombarded with bombastic claims like these. When I dig in, it inevitably turns out they’ve developed a niche product within a large industry, and their market opportunity is only $20 million. Founders seem to think that big numbers will grab investors’ attention, but wild claims only lead to skepticism about the entire pitch. What matters is not the industry size but the opportunity for your particular p ..read more

Life sciences has overtaken software as the primary recipient of early-stage funding For as long as I can remember, and I’ve been in the startup world since the 1990’s, venture capital has been nearly synonymous with software. From the dotcom daze where money was thrown at even the stupidest ecommerce concepts to the pre-covid days where funding flowed to SaaS, virtual reality, crypto, fintech, and AI for anything and everything, if you wanted venture capitalists to fund your startup, you needed to be pitching some sort of software. But in the past few years, the dominance of software has ..read more

Get investors excited about the opportunity without losing credibility The investor pitch usually starts with problem and solution, followed immediately by market size. This gives the market size huge importance in the presentation, and for good reason. There are a plenty of great products that fill unmet needs, but unless there is a huge market, they fail as investments. That doesn’t mean these solutions won’t make solid, profitable businesses, only that they won’t grow to the size needed for a huge acquisition or IPO. If you’re creating a consumer product, an organic cola for example, I’m no ..read more

Why Those Warm Intros Are Mostly But Not Completely Useless Imagine you’re a hotshot venture capitalist and you get this message from one of your buddies: “Hey DC, sorry I can’t make golf tomorrow. I’ve got a meeting with one of our portfolio companies. They’re absolutely killing it and getting ready to close their next round. Our fund is putting in another $2M. They’re in your space. Want an intro to the founder?” The answer, of course, is, “Hell yes! Tell me more.” That’s a hot intro. If you can get intros like that, you’ll close your round in days. Now imagine the following email hits your ..read more

The post-money SAFE is the best vehicle for investing in early-stage startups I’ve recently had the opportunity to speak about why I think the post-money SAFE is the best investment vehicle for early-stage start-ups, better than convertible notes. While I was preparing my presentation, by some weird cosmic coincidence, I had not one but three startups pitch me on investing using the old pre-money SAFE that investors hate. It made my head explode. I thought the old pre-money SAFE was dead and buried, but it seems to be making a comeback. Unfortunately, this resurgence is highlighting the horror ..read more

The amount depends on the startup’s valuation, not how much it needs Working with early-stage founders, pitches still in the ideation stage usually ask for $2M to build the product. Ones nearing an MVP often ask for $5M to bring the product to market. Most investors will not reply to those requests or respond with that catchall answer — sorry, too early. So the founders keep pitching more and more investors, not understanding the problem isn’t the investors; it’s the size of their raise. I don’t want to be a jerk and burst your bubble. But I want you to succeed. So I find myself hemming a ..read more

Founders have to do product sales even if they hate it My personality is almost the stereotype of an engineer — I love working through problems to find the optimal solution but suck at building relationships. I can send you an email with the 10 reasons why you need my product, but I struggle to build an emotional connection that makes you want to jump up and send in your order. In other words, I’m good at building products. I’m horrible at selling them. I’ve even been given the moniker, of which I’m quite proud, of World’s Worst Salesperson. But as company founder and CEO, I didn’t have a choi ..read more