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Seedcamp US Trip Oct 2016

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Tips on Fundraising in the USA from ThingThing

With all eyes on the USA this week in the wake of the Presidential elections, we decided to speak to Olivier Plante, Co-founder and CEO of Seedcamp-backed company Thingthing, about his experiences on the Seedcamp US trip and his tips on the do’s and don’ts when it comes to meeting investors stateside. Taking in three cities on the East and West coasts across two weeks, what does fundraising in the USA look like and how does it differ to Europe?
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Left to right: Meni from Findify, Sia from Seedcamp, Dave from Seedcamp, Ed from Reinfer, Olivier from Thingthing, Nick from Splittable, Evgeni from Gamewheel and Mike from YodleTalk

1. USA? Think twice…⛔️

Let’s face it, if you visit someone, saying:

“I want your money now and I’ll rarely see you in person…because I’ll go back to my country, use your money and there’s a 95% chance that you won’t get it back…? Want to give me some money?”

Fat chance.

Don’t waste time, yours and theirs, with investors that are not going to invest in companies either based abroad or who don’t have a large share of US users in their base. Instead, focus on funds that are willing to invest in non-US based companies or those with more focus abroad.

However, if your plan is to move to the US or move a part of your team over there, then say it clearly that you’re doing all necessary actions in this direction.


2. Decking instead of Pitching

I often see founders avoid spending time receiving professional advice from real pitching coaches. Pitching is an art and you’re a founder, not a necessarily a presenter. Take the time to invest in your presentation skills. This is not expensive. Presenting in meet-ups or local Toastmasters are inexpensive ways to greatly improve your skills.

Here’s the difference many of you will empathise with.

Decking:

Founder: “You can read here 500 words at the same time I am talking to you”

Now, try reading a book at the same time someone tells you how to get somewhere you’ve never been: IMPOSSIBLE.

So, get your slides RIGHT: action title + relevant visuals + “listen to me”. Your slides are to support your story, not to tell it for you.

Pitching:

Founder: “I have this drug you need to try and you’ll be addicted to it big time. Here’s our recurrent usage. People love it and keep on wanting more. I need your money so I can get more addicts, give them more of my drug, and make even more money for both of us.”

See the difference? It’s not unique to the US of course. Many founders make this mistake in many countries. But considering the US accounts for nearly 70% of total global venture capital*, you can bet your half double decaffeinated half-caf with a twist of lemon coffee you damn well better get it right here! (prize for the first person who recognises that one)

You also have to understand that Americans are awesome at pitching. It’s part of their childhood. So when they pitch, you bet they’re VERY good at it.

Europeans tend to be a bit too “ordinary” in that sense.


3. 10–12 min to know if you should follow up ☎️

I’ve met multiple investors while raising our seed round for Thingthing, a 3rd party keyboard for iOS. Some were sending positive signals right away, were aligned with our vision of the future, and saying things like “It makes sense!”, “I completely agree!!” and “Yeah baby!!!” (at least that’s how I remember it ).

Some, naturally, weren’t quite so enthusiastic. When you meet that type of investor, the conversation often ends with doubting or questioning what you’ve built. Fair enough. After all, it’s their money!

Don’t get me wrong, I am not saying that questions are not welcomed but there’s a subtle difference when someone is questioning just to test you and play devil’s advocate, and others who truly have doubts because of your product or expertise in the domain or vertical.

In a 10–12 minute chat you can size-up your investors just as they are sizing you up, and know if they’re hot [for your company] or not.

4. “Know it all” conversations ☠️

Questioning your space is great. It helps you to strengthen your narrative and address weak points. Now, when someone starts playing know-it-all, I tag that person immediately as someone who thinks he knows everything.

Here’s an analogy you’ll get:

When your parents tell you what you should do in your circumstances as a founder, and they have no experience at all with what you’re talking about. Isn’t this annoying? YES.

If your answer is NO, open your eyes mate .

It’s good to have gut feelings about what you’re building but man, sometimes, people don’t know jack and no one can stop their nonsensical know-it-all bullshit.

Fellow founders, if this happens to you, stop there and don’t waste your time trying to convince people to give you money if you can already sense they don’t feel your vibe. Just take a deep breath, be gracious, and move on.

5. Too US Centric for you ☠

People in general are rarely going to betray their first instinct. If they tell you “no one could buy you” or “there’s no exit potential”, take the feedback and do your research afterwards. For example, before building Thingthing, I didn’t even think about potential buyers in markets like Russia, China, Brazil, etc. So, if an investor from the US, who’s used to making local investments, tells you there’s no exit potential, be sure to consider their market and geographic focus… they could be dead wrong.

6. Too early, too late ☠️

You can often hear, “it’s too early for us to invest in you, come when you have more traction”. Do yourself a favour and research at what stage they invest first. By looking at Crunchbase for example, you’ll get a good sense of their investment sector, style and round size. Then check the metrics of those companies they invest in and you’ll immediately know if it’ll be a good conversation or a loss of time.

To sum up, what you learn in these 10–12 minutes will be enough to tell you if there’s an opportunity there and you should continue the conversation, or if it’s best to keep shopping around.

One of my most interesting learnings overall was that as amazing as many of these investors are, they can not see the future. As entrepreneurs, the future is ours — and we need to be decisive and build it. — Nicholas Katz from Splittable


7. Product-centric pitch is not good

Investors enjoy understanding products, don’t get me wrong. But if you spend 75% of your investor talk about the product…you’re practically ignoring the fact that it’s a business at all, let alone a viable one!

You founded a company that you want to grow. This goes way beyond just your product. Spend time on your vision, your next critical steps, your business model, your key differentiators, your team, and on why you need them as investors (which shows you did your research).

And remember, the most ambitious visions are what gets people excited. Think big! Investors are investing in the full package — product, vision, team, and you! Give them reason to believe.

On the opposite, if you only talk about the business and rarely about the product, then it ends up being the same: unbalanced narrative.


8. Tease them, excite them & keep details for later

This is a first date. I often see too much transparency in the way founders shared their company. Remember that an investor looks at deals every day. When you pitch, they’re probably looking or have looked at a similar deal that week. Make yourself standout among the other suitors if you want to make it to 1st base 😉

If you tease them just the right way, you’ll create a hook for a second date too. In general, the following checklist is a safe bet (order may vary):

  1. Outline the problem you solve: what’s the huge pain point people face
  2. Nail your 1-liner: clearly, simply state what it is that you do, in one succinct sentence
  3. Your solution: show it visually, a beauty shot is crucial, and ideally let them try the product hands-on
  4. Show your KPIs: prove it works, people love it, voilà our numbers
  5. Show your market: it exists, it’s sizable, and we’re different because of X,Y, and Z.
  6. Be Visionary: at high level, display your grand, ambitious vision of the future
  7. Ask: Call them to Action — what do you want, how much, and what for

Other goodies

  • This is America, people are simpler, wear a T-shirt
  • A good draft is always great after a big day, especially among founders!
  • Sushirrito is jaw-braking MUST place to eat in SFO
  • Iterate your pitch as you meet investors, do your DD too
  • Uber will be your friend in all those cities, it saves you time
  • Learn from and about fellow founders too
  • It’s not a happy “tour”, you want “money”. Period.

On behalf of all founders that took part in this amazing trip, thanks to all Seedcamp and especially Reshma, Carlos, Sia, Dave and Tom.

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