Guest post by Lisa Cuesta. Lisa is a Vice President at DC-based early stage venture firm NextGen Venture Partners and a member of the Vinetta Venture Challenge Committee, a group of investors representing 12 local firms that review all of Vinetta's pitch applications.
While founders may disagree about the causes for tech’s diversity problem, there are many reasons for female founders in Washington DC to be optimistic. In November, DC tech leaders announced a partnership with Mayor Muriel Bowser to make the District “the most supportive ecosystem for women entrepreneurs in the United States.” This effort formalizes the momentum that the DC tech community already has.
This week the Vinetta Project will begin accepting applications for its 3rd Annual Pitch & Panel Showcase Series. A group of 15 local investors on the Venture Challenge Committee will review all applications, and come to a decision on each company relatively quickly. This is a relatively common practice. A study by content management startup Docsend and Harvard Business School professor Tom Eisenmann showed that investors spend about 4 minutes per deck.
As you begin preparing your application, I wanted to share some thoughts on how to make your company stand out during the investor’s fourth hour of reading decks. My intent is not to replicate or repackage the many resources already available, you can find *real* pitch decks from companies and tips from investors below. Instead, I’ll share some highlights from our kickoff meeting to shed light on how investors evaluate pitch decks.
1. Sell the vision
If you haven’t figured it out by now, being a startup founder involves *a lot* of selling - selling your product, selling yourself, selling your company, selling your vision. If you’re not pitching investors, you’re pitching current employees, prospective hires, or potential customers. You’re trying to persuade these stakeholders to take a bet on you with their time, energy, and capital.
The pitch deck should capture a vision that gets investors excited about the future that your company is building, and why the company’s mission gets you out of bed in the morning. With a powerful mission statement, you can stand out and rise above the noise. Here are a few examples of tech companies’ missions:
2. No really, what problem are you solving? Who cares? And why?
Presumably you started working on your company after noticing a problem, and you developed a novel solution to address that problem. Every successful business has a target customer who needs their product or solution. Whether your target customer is a business or consumer, your product should address a need that affects their routine and that they’ll pay to use.
Get the investor excited about the solution - prove that your approach is better, cheaper, or faster for the customer than anything else out there. Remember to show don’t just tell - include screenshots to show your product’s differentiation, defensibility, and proprietary tech. Explain why now is the right time and how is your team uniquely positioned to build the company.
Show the reader that you’re familiar with the competitive landscape and the products that your solution is displacing. Lastly, prove that you can build a company around your product - and that it’s “not just a feature,” as Steve Jobs infamously told Dropbox’s Drew Houston.
3. Tell us how big the market is, but the exact number doesn’t matter that much
Including the total market size in your deck helps orient the investor and offers a sense of the scale and impact that your company could have - but it’s not the deciding factor. No investor ever assumes that your company will capture 100% market share. Instead, it sheds light on your understanding of the opportunity and industry dynamics.
In some cases, the startups are actually creating new demand (i.e. Google’s monetization of the internet through Adwords) or expanding a relatively small market (i.e. Uber revolutionizing the taxi industry). In other words, don’t stress about getting the number exactly right - provide a ballpark estimate and explain why the market opportunity will change over time.
4. How are you going to make money?
Sure, maybe Larry and Sergey hadn’t yet identified Google’s monetization strategy and Mark Zuckerberg was focused on getting more users on Facebook when they pitched investors, while Travis Kalanick is still trying to figure out how to make Uber profitable. However, these edge cases are the exception, not the rule.
Investors want to see the unit economics for your product - how much customers are willing to pay versus how much it costs you to serve them - and what you have to believe for the company to be profitable. Investors know your financial projections are going to be wrong but it’s still a worthwhile exercise to build forecasts around your assumptions about the business.
5. How far along are you?
Some will claim it’s never been easier to start a tech company. With the proliferation of developer tools and pay-as-you-go cloud computing platforms, entrepreneurs can ship product and start acquiring customers with minimal capital investment.
Your pitch deck should show your product’s validation from the market and traction to date. Depending on your business, this can be measured in revenue, orders, number of customers or signed contracts, number of users, or key partnerships. Investors will be looking for how fast your business is growing, and how you’ve learned and iterated.
If you’re looking for more inspiration, you can find additional resources from investors and entrepreneurs below!
For tips from the experts
For more inspiration
Last week, we hosted our second Fireside Chat event to discover the perks available to starting your company in Washington DC. Our Fireside Chat series is our invite-only event for founders that aims at providing tangible and useful information to help improve your business' top or bottom line today. We always keep it casual with a 30 minute Q&A and then time to catch up with other awesome founders and enjoy some (free) food, thanks to our generous sponsor Cushman & Wakefield.
In our chat we discussed just how incredible it is to call your company's home "Washington DC." I mean, our neighbors are the President and the First Lady of the United States. If you are going to get something done in this country, you come here. Just two weeks ago, The White House hosted one of the largest events in history focusing on the empowerment of women in business, innovation, and education; and for the second year in a row, SmartAsset named Washington DC number 1 for women in technology. It's never been a better time to be a female founder in the District, and our Fireside Chat highlighted some of the perks DC can provide our companies:
Tip 1: The DC government offers some great money-saving incentives to tech founders
Tiffany Thacker, Senior Director of Technology and Entrepreneurship at the Washington DC Economic Partnership, told us about the amazing DC-specific incentives available to tech founders, including:
Tip 2: Small companies should consider subleases to avoid getting trapped in long-term leases when they're still growing quickly.
Depending on the situation, commercial subletters can get a discount from the original lease. Jessica Miller, Director of the Tenant Advisory Group at Cushman and Wakefield, warned that tenant representatives that are trying to encourage 5 year leases might not have your best interest at heart. Good tenant representatives will think through the long game with their founders, helping them find bigger spaces as their company grows.
Tip 3: If you're going to need office space, start looking early.
According to Jessica, it can take several months to find and lease the perfect office space. She recommended reaching out at least 3 months before you're ready to move, or even before you start considering it. Tenant representatives like her take their commission from the seller, not the company— there is no cost to founders to work with them so you don't have to worry about hourly fees before you're ready to move into office space.
Tip 4: Find a mentor.
Both Jessica and Tiffany recommended finding a mentor that can help guide you through the DC ecosystem— preferably someone who has done it all before and is well-networked enough to connect you to others. AccelerateDC is a great place to start.
Tip 5: Know when its time to get your own office space.
One of the major items we discussed was when it was appropriate to consider growing your business beyond your home and shared office spaces. Jessica Miller of Cushman & Wakefield provided some great guidelines:
It was a great morning with some great founders. Looking forward to our next Fireside Chat in September!
Interested in receiving an invite to our future Founders-Only Fireside Chats? Email email@example.com
We caught up with Danielle Tate, longtime female entrepreneur who bootstrapped her business - MissNowMrs.Com - to 300,000 customers. In addition to being Founder & President of this multimillion dollar online name-change company, Danielle is also the author of Elegant Entrepreneur: The Female Founders Guide to Starting & Growing Your First Company.
Tell us more about Elegant Entrepreneur? What inspired you to write it?
I wrote Elegant Entrepreneur to solve a problem. The problem is that too few women are starting businesses, and the ones who do aren’t scaling them past $25,000 in annual revenue. As a women who successfully built a tech business with zero business background I always searched for a book that spoke to me as an intelligent women but didn’t assume that I had an MBA. A decade into my life as an entrepreneur, I wrote that book with the mission to lower the barriers to entry and success for female founders by mapping the 12 steps to building a business and demystifying entrepreneurship and the emotions that come along with the journey.
What was the wildest or most inspiring story you heard from the many experts and entrepreneurs you spoke with?
Caren Merrick was down to $33 in her bank account and instead of giving up on her company, she dug deep and used that financial pressure as motivation to innovate and eventually grew WebMethods into a global public company of $200 milllion and 1,100 employees. Her tenacity and story inspires me.
What is the best piece of business advice you have ever given (and/or received)?
Have a good idea daily. It is easy to get hung up on the one big idea that you're building a company around, but a new idea daily will help keep you growing, keep your customers happy, and keep you ahead of competition in an ever-changing market. Discipline yourself to write ideas down and look for ways to implement them. Also encourage a culture of idea creation and sharing within your company.
In your view, what is the single biggest obstacle facing female entrepreneurs today?
Self-doubt coupled with a lack of role models. Women make amazing entrepreneurs, but I think our ability to look before we leap can also keep us from jumping into entrepreneurship. I believe educating women on how to validate a business idea as well as the steps necessary to grow that idea into a business will lower the barriers to entry for female founders. Also, the media needs to highlight more woman entrepreneur success stories. We should all celebrate the amazing companies women are building.
Have there been any unexpected outcomes from the journey of writing and publishing this book?
I've learned that life is limitless. I was feeling a little "stuck" in my 30's and in writing this book I have opened an entirely new door to new adventures and experiences.
We were blown away by the quality of the companies who applied to present in the first of three Semifinalist Pitch & Panel Showcases for 2016. We received close to 40 applications with many extraordinary companies. Here are some stats that highlight the breadth of new enterprise in tech being undertaken by female founders in the DMV area.
1. Aspire (Lily Cua) (Enterprise Technology).
2. Listenport (Hulya Aksu) (Customer Engagement)
3. Prescient Systems (Alexandra McManus) (Big Data)
In honor of Valentine’s Day, we caught up with Heartful.ly founder Kate Glantz. It’s been 10 months since Kate pitched at our first-ever DC Showcase, and plenty has changed— she has since been selected as a Halcyon fellow, won the 1776/Washington Post inGENuitY Pitch Contest, and so much more.
We just learned about Heartful.ly’s newest initiative and we’re excited to share: This Valentine’s Day, Heartful.ly has partnered with Blessings in a Backpack to fight childhood hunger in America. Instead of giving flowers and chocolates (so blasé), anyone can donate nutritious meals for hungry kids in honor of the people they love.
Read on to learn more about Kate’s journey since pitching Heartful.ly at our Vinetta Showcase last April.
For those of us who weren't at the April event: Tell us a bit about Heartful.ly and why you founded the company.
Heartful.ly is a wedding registry for charitable giving. We partner with nonprofits around the world to feature projects in need of funding and build beautiful registries. After every wedding, we send an impact update that shows how the couple and their wedding guests have made a difference in people’s lives.
Heartful.ly was born out of my experience as a Peace Corps Volunteer in Tanzania. My community was poor by every standard, but the way they celebrated big events—mainly weddings—was full of so much generosity. With millennials emerging as the most generous generation, it became clear to me that there was a powerful opportunity to link wedding traditions with philanthropy.
Where was Heartful.ly when you pitched at our first DC Vinetta Showcase in April 2015?
Vinetta was my first real pitch! I was n-e-r-v-o-u-s! Heartful.ly was only a few months old and we were just one month into our beta. I was also still full time at my day job with the Peace Corps. Looking back, my experience pitching at Vinetta was a significant milestone. It was the first time I received feedback from investors and also my first experience outside of Startup Weekend sharing Heartful.ly with a crowd. It was extremely validating, not so much in terms of knocking it out of the ballpark (because I didn’t!), but rather an affirmation that my company was real and on a positive trajectory.
Now, ten months later, what's changed? Where are you now?
So much has changed! Most importantly, we launched in December! I’ve been full time since July, am a fellow at the Halcyon Incubator, and am now partnered with 40 nonprofits on five continents. There are so many incredible and generous couples using the platform and a number of brands supporting our vision.
Right now, I’m completely focused on user acquisition with an emphasis on the D.C. metro area and scoping out 2-3 additional cities for expansion later this year!
Are there any ways that the Vinetta community can support Heartful.ly's further growth? What can readers do to help?
Share Heartful.ly with your engaged friends and family! Are you affiliated with a socially conscious brand or a brand that is interested in this space? Let’s talk about how we can support each other. Drop me a line any time at firstname.lastname@example.org. I’d also be remiss not to mention that I’m raising a seed round later this spring! I’d love to hear from Angels and founders who have experience raising in the B2C or crowdfunding space!
What advice would you give to someone who is getting ready to pitch at one of our events?
Remember that you’re the authority on your business. Odds are good you know more about your industry than anyone else in the room. Be confident. Be authentic. Know your numbers backward and forward. And have fun. It’s not every day you get to stand on stage and share your baby with a captive audience!
To learn more about Heartful.ly, visit their website!
For many of us entrepreneurs, accounting feels like the necessary evil of starting up our businesses: we can’t live without it but we are loath to do it ourselves. Finding the right firm for strategic financial guidance can be tricky business. An unofficial poll of fellow founders revealed that many entrepreneurs use their personal accountants to help with their business’ books the first time around.
To help close the information gap, we launched our Founders-Only Fireside Chat Series. Our goal is to bring together thought leaders and top early-stage entrepreneurs to discuss practical solutions to common business issues. Our inaugural event took place at Halcyon House in Georgetown and included 25 startup founders. We were joined by Zach Giegel, founding partner of GSP Financial Services, who shared tips on how to “avoid those oops money moments.”
When asked what was the most common mistake early stage startup founders make, Zach’s answer was singular: CASH FLOW. Zach explained that while many young businesses focus in on total dollars raised or projections on potential revenue to be earned, too many get caught taking their eye off the ball when it comes to regularly balancing their business’ check book.
Zach offered 5 simple yet effective ways to track your company’s cash situation:
1. Monitor It Monthly (or Weekly): Early-stage companies are not mature enough to wait for the end of a quarter to manage their cash flow. Using a simple excel spreadsheet (or Quickbooks) to track money-in and money-out each week will make you a stronger operator and create a layer of flexibility to make real-time adjustments as needed.
2. Involve Your Team and Investors: Keeping your team in the loop will help make them better agents of your business and yield smarter decision-making. Talking cash flow through with investors will help to manage their expectations.
3. Negotiate The Timing of Payments: Timing can be everything. Stretching out your account payables and shortening the life-cycle of your receivables can help to generate more near-term cash that can help support your business operations and grow more quickly.
4. Think Through Purchases: It might not always make sense to buy the equipment necessary for your business. Depending on where you are in the life-cycle, renting can make more sense. Crunch the numbers and think through the implications if business goes south.
5. Check Your Current Ratio: Regularly spot-check your current ratio – current assets to current liabilities. It represents your company’s short-term liquidity profile.
Managing cash flow is a critical topic for early-stage ventures as a number of leading venture capitalists warn about a year of down or flat rounds, a tougher environment to raise in, and emphasize the ability to conserve cash for 18-24 months rather than the “spend to grow topline approach” that has ruled the last couple of years.
Interested in receiving an invite to our future Founders-Only Fireside Chats? Email email@example.com
Happy 2016! We’re so excited to usher in the second year of Vinetta in DC. This year, we have partnered up with GSP Financial Services, a new firm that provides critical accounting and financial services for startups, to launch our $20K Venture Challenge!
But first, let’s back a up a little bit. Since launching in April, we hosted three events:
All-in-all, we had over 70 founders present or attend our events in 2015. It was a spectacularly fun first year… but 2016 is going to be even better.
With the support of our phenomenal sponsors, we’ll be adding a competitive twist to our Pitch & Panel Showcases. At our March, May, and July events, we will be selecting finalists who will then compete for $20,000 and a suite of prime start-up services at our final Showcase Showdown in September.
Along the way, we will be facilitating:
We’ll be sharing updates, opportunities, and other great content on this blog as we chug along. If you’re interested in getting involved with Vinetta in 2016, contact us. We can’t wait to hear from you!
Amelia & Anna