Funding your ideas…T.A. McCann

I just like to start things, go fast and push the technical limits,

and work with great teams to create incredible results

Background

Incubation

Microsoft - Hosted Exchange, MS Anti-spam, Exchange 2003, Mobile SDP (think iPhone app store), MSR

Polaris - started Message Gate and worked on ideas like Evenflow, OutlookBI and HelpShare

New companies including MOD Systems and Jump2Go

Vulcan (Evri – Virtual Worlds, Faceweb, Gist) 30-60-90 plan Triage, Plan, Prototype, 4Ps of marketing, Company or Kill

Lessons learned: it always takes longer, pick a customer you want to embrace, Know your own space

Where does it come from…

Your bank accountBootstrap (work for hire)Bootstrap from customersStrategic investment by partners/customersAngelsVCs

Choose what you need and can get…The bigger the idea, the more latitude and

connections and experience you will need to succeed

So, you really want investors….

Angles take just as much time as VCs

Relationships are key; develop them now with all funding sources vet your ideas, early and often, discover your champions Other CEOs are your friends, leverage them

Your plan is your plan

Raise money at the right time

Plan – Promise – Prototype – Product – Performance

VC is about smart money…

Accelerates value as soon as they get involved

Brings smarts and experience to help to drive

Actively engages with your product and market

Brings credibility, higher likelihood of more funding

Brings people, knowledge, connections

Know what you are looking for (skills)

It’s a sales process

Qualify your prospects Who you know, focus on personal intros Previous investments/success in the space General beliefs about future innovation (in your space) Key connections with thought leaders (in your space)

Fund progress $ total size, allocation, room for new investments, stage focus Current success

Decision makers and process Board member – how many boards, of what type, activity,

commitment Do your diligence on the person, find other CEOs

Drive the process and timeline Align to the calendar (your milestones, their rhythm) Show a vision (not too much) Define a horizon and hit it Create competition for your deal Gang up your work, you need to drive the process

Why you…

25% of the VC decision is out of your control Wrong space, wrong size, wrong partner, wrong metrics,

wrong time, already invested, once burned…

You have the goods, act like it – exude confidence

My read on their decision 50% is the guy/team – smart, passionate, credible, connected,

leader, motivator, tactical/strategic….

25% is the space/idea – how big, how much risk, how many other players, capital risk, likely exits…

25% is the progress, execution – can you get stuff done, good decisions, efficient with capital…

Summary

If it were easy everyone would do it

Love your customers more than your idea

Raise the smartest money you can

Know where to spend and save

If you were rich, would you still be doing it?

T.A. McCann

tam@gist.com

http://tamccann.blogspot.com

http://www.twitter.com/tamccann

http://www.linkedin.com/in/tamccann

206.229.9991

Strategy – magic quadrant

Create the smallest circle that is big enough

You can only change 1 thing/quarter

This is your elevator pitch

Lessons learned: it should not be complicated

Strategy – know your customer

Personify your customer

Focus on pain vs. opportunity

Know 10-50 by name

Sell them your PPT

Make sure they pay

Understand their toolset

Determine their buying habit and timeline

Lessons learned: this is the fun part and you should love it, iterate quickly

Operations

Plan and Pitch in PPT (lies), Operate in Excel (truth)

Time bound and list your goals – stay honest with yourself

Deliver email status updates every 2 weeks to your investors/board/advisors

Always cut yourself off one quarter earlier than you need and 2 quarters before you think you should

Lessons learned: good entrepreneurs will make too many sacrifices

Team

Winning the Americas Cup is like running a startup

Value = 5(passion) + 2(brains) + 1(experience)

The best advisors are only one small step away from conflict of interest

Outsource routine tasks, hire for thought leadership

Know your service providers (Atlas, Fenwick…)

Startups should never partner with startups

You are the VP of Marketing

Make yourself a brand and thought leader Goto and present at conferences Become a guest contributor

Communicate online and in-person Blog (1-2 per month) Twitter (1-2 per day, blend of personal, content and business) Facebook (connect to Twitter and your blog) LinkedIn

Understand what resonates, the message the space and timing, the competition

Sell, Sell, Sell your idea and yourself

Tools that cost very little money

Open source stack Prototype + LowPro, Ruby/Rails, Java, AMQ, MySql Textmate/Netbeans, SVN, Rspec, CruiseControl

Google is our friend Google Domains (mail and docs) Google forms (interview and VC feedback tracking) App engine – web site hosting Analytics – web data tracking

PBWiki – corporate plans and broad strategy, Unfuddle – bug and feature database and Skitch – screen caps and comments

Soft Layer – hosting, Amazon S3 – storage

Survey Monkey - end user surveys, Vertical Response – keeping the beta users engaged and GotoMeeting- presentations, TweetDeck – monitoring the Twitter stream