Kicking off VC Unlocked, and a New Website!

Big news! It’s the first week of VC Unlocked!

We’re welcoming an awesome new group to the Stanford campus this week. They’ve traveled from as far as Lagos and Melbourne to be with us here in Silicon Valley and we couldn’t be more thrilled.

In the spirit of #500Strong, we wanted to share some fun facts about the participants and the exciting program we have planned. Here goes:

  • 47% of participants are women
  • 74% are based internationally, representing 17 countries including Brazil, Nigeria, Russia, Colombia, and the UAE
  • Participants have made 250+ investments in total
  • Areas of investment focus include FinTech, BioTech, telecom, FoodTech, and more
  • Participants come from family funds, government offices, startup accelerators, and private equity backgrounds
Participants from the July/Aug 2016 cohort of VC Unlocked on Stanford Campus

In addition to our stellar lineup of Stanford University professors and 500 Startups partners, we’ve also recruited some of the top VCs from Silicon Valley. Guest speakers this year include Renata Quintini (Lux Capital), Jason Calacanis (INSIDE.com) Jeremy Liew (Lightspeed VP), Marlon Nichols (Cross Culture Ventures), Andy McLoughlin (SoftTech VC), and Rick Marini (Dragonfly Partners).

We’ve got a packed schedule for the next two weeks. Lecture topics run the gamut, from “Understanding Cap Tables and Ownership” to “Attracting Deal Flow,” as well as practical and action-based exercises, including founder interviews, opportunity assessments, and more.

Outside the classroom, we’ve also planned special visits to Andreesen-Horowitz, class dinners, and, drumroll please, our invite-only DemoDay!

Guest lecturer Jason Calacanis presenting to participants in 2016

Oh, and one more thing. We also launched a new site for VC Unlocked today!

It’s an updated visual design that showcases more information about the program, attendees, and instructors. We think it will be a great resource for prospective students and past participants alike and we’re excited to share it today. Let us know what you think!

Tune in over the next few weeks where we’ll feature guest posts from current participants as well as a fun recap that summarizes some of the key takeaways from the program’s lectures and events.

 

Announcing “Silicon Valley Secrets for Investing in Asia” with INSEAD

We’re excited to announce that applications are now open for our newest course, “Silicon Valley Secrets for Investing in Asia.” We’ve teamed up with INSEAD, a leading global business school, to offer investors a one-week deep dive on how to apply Silicon Valley investing expertise to Asia-based startups.

After the huge success of our VC Unlocked programs in the Bay Area, this marks the first time we’re taking one of our programs outside the U.S. The course will be held at INSEAD’s Asia campus in Singapore from November 6 – 10, 2017.

For AIPAC investors, that means the same unrivaled access to our Silicon Valley network, investing know-how, and extensive Asia knowledge, minus the 12-hour flight and jetlag.

Sound good? Apply today to be part of the inaugural class in November 2017.

Course Overview

During the course, participants will work directly with INSEAD faculty and 500 Startups partners to explore startup investing trends across different markets in Asia. The program will explore topics relevant for venture capital, such as honing and evaluating investment theses, structuring early stage tech investments, and raising your next fund.

As part of the course, participants will also meet with top VCs from China, India, Japan, South Korea, and Southeast Asia. Admission also includes exclusive access to a special DemoDay, where participants will have the chance to evaluate real startups from the 500 Startups portfolio.

Other key benefits include:

  • Connecting with other Asia-focused startup investors as well as INSEAD alumni
  • Getting feedback on your investment thesis from world-renowned INSEAD faculty specialized in VC and entrepreneurship and 500 Startups Managing Partners
  • Getting fundraising tips and tools for structuring a fund from top VCs in the region
  • Improving your ability to identify and evaluate top startups for your portfolio
  • Building your deal flow
  • Earning a Certificate of Completion from INSEAD

 

VC Unlocked 2016

500 Startups in Asia

Here at 500 Startups, we pride ourselves on helping build viable startup ecosystems around the world. Since our inception in 2010, we’ve invested in over 1,800 companies and 3,000 founders in more than 60 countries, including Southeast Asian companies like Grab and Viki, which was acquired by Rakuten in 2012.

Geeks on a Plane, East Asia, Tokyo 2016

With $36B invested in startups and tech deals last year, Asia has emerged as a new hub of VC activity. Our decision to launch the first VC Unlocked program outside of Silicon Valley in Singapore is yet another example of our commitment to the Asian market.

We recently doubled down on Southeast Asia with a new $50M Durians Fund, launched a new $10M fund in Vietnam, and appointed a new head of business for China

About INSEAD

With three campuses (France, Singapore, Abu Dhabi), 145 faculty members from 40 countries, and 1,400 students in their PhD and degree programs, INSEAD is one of the world’s top graduate business schools.

They recently earned the top place in the Financial Times’ “Global MBA Ranking 2017” for the second year running.

INSEAD Asia Campus

Details & Logistics

We accept qualified candidates on a rolling basis. Space is limited so we encourage you to apply as soon as possible before the deadline of October 18, 2017.

The program fee of $9,800 USD covers tuition, course materials, most meals, admission to DemoDay, and transport to any site visits. Accommodations are not included but can be arranged for an additional fee.

If you have any questions about the program or would like to set up a call, feel free to reach out to Newton Davis at newton [at] 500startups.com.

 

Are there ghosts in your convertible notes?

Guest blogger – Adam Sterling is the executive director of the Berkeley Center for Law, Business and the Economy, co-founder of Startup@BerkeleyLaw, and a former venture capital and startup attorney.

Are you investing in convertible notes or securities? Do you know what a phantom liquidation preference is? Did you know it could cost you hundreds of thousands of dollars? Let’s illustrate how with a simple example…

Sally purchases a convertible note with a valuation cap of $5 million in Tuber Corporation for $100,000. Six months later, Tuber closes its Series A with a pre-money valuation of $10 million, selling new shares at $1/share. Thanks to its valuation cap, Sally’s convertible note converts at $0.50/share and she receives 200,000 shares of Series A stock. Sally’s very happy about this outcome.

Source www.billionbackrecords.com

A year later, Tuber is acquired. Unfortunately, the acquisition price is not enough to trigger a conversion of the preferred stock. Series A holders will just receive their liquidation preference. Assuming the Series A investors negotiated a standard liquidation preference, each Series A holder should receive the “original issue price” of their Series A stock. The question for Sally then becomes, is the “original issue price” of her Series A stock $0.50 share or $1.00 share?

Assuming Sally’s convertible notes were silent on this issue, Sally would most likely be entitled to receive a liquidation preference of $1.00/share in the above example or $200,000 (an outcome that greatly benefits Sally). This benefit to Sally, getting $1.00/share as opposed to $0.50/share (which ends up being worth $100,000), is known as a phantom liquidation preference.

While most investors would prefer to keep this phantom liquidation preference, many companies are drafting convertible notes to avoid it. Their argument is that investors are double-dipping — benefiting from the discount/valuation cap when their security converts and again with the liquidation preference. This argument may be valid, but as an investor you should at least be aware of it. As some investors successfully retain the preference, it could be worthwhile to fight to keep it. 

Understanding nuanced concepts like this can provide investors with a critical edge in the crowded venture capital space. To this end, UC Berkeley will be partnering with 500 Startups at Venture Capital Deal Camp in February to breakdown concepts like this and explore other mechanics of early-stage deal making. Deal Camp also features VIP access to 500’s famous Preview Day and simulated negotiations with real companies. Check it out and consider applying!

Thank you to Adam Sterling for contributing to the 500 blog. For more insights from Adam, follow him on Linkedin or Twitter.

How to Invest “Smart Money” — 4 Lessons Learned

I recently attended VC Unlocked: Secrets of Silicon Valley Investing, an investor training program run in partnership with 500 Startups and Stanford Center for Professional Development. The two-week program took place July 25th – August 5th, 2016, and a class of 28 participants dove deeply into the world of tech, understanding fund dynamics and hearing from seasoned experts.

My big takeaway was that along with all the attention and hype startups are garnering around the world, there is still a large gap in the knowledge available to investors entering the space.

We hear a lot about “dumb money” and to avoid it like the plague, but is that it? As a former educator I believe not – and so here are a handful of tips for new investors from VC Unlocked to make your money smarter:

1. Understand the market/ecosystem you are investing in

Copying and pasting a playbook from Silicon Valley directly into a different region will not get you the startup ecosystem you hope for. It’s taken a while for this message to make its rounds, but it’s important to know that building up the key components are what matters; Do smart founders, early and later stage capital, legal and other services, and exit opportunities exist in your market? If not, how will you as an investor traverse those voids?

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Bedy Yang and Mary Grove speak about building ecosystems around the world.

2. Educate yourself and peers on good etiquette and best practices

Unless you imagine yourself solely generating your own deal flow and funding your companies throughout their lifetimes, you will find yourself working alongside and benefiting from the participation of the rest of the startup community. It is in your best interest to play well with others, and this applies to how you manage the interests of and your relationships with LPs, fellow investors, and entrepreneurs.

Good behavior could be saying “No” quickly and kindly to founders that do not fall within your investment thesis, having a discussion with your LPs about recycling management fees, or understanding which terms are investor vs. founder friendly.

Your responsibilities as an investor will include:

  • knowing what you are buying
  • how to navigate and properly negotiate terms
  • what part you play in being a constructive board member beyond just writing a check

The good news is, there are many thought leaders and content around these topics that you can find online, and even better news is my colleague will be sharing a post devoted to the best ones!

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Jeff Clavier shares his fund’s journey.

3. Know your value proposition as an investor

“Why you?” is a question investors are often heard asking founders, but it is just as important for investors to ask themselves both for fundraising as well as deal flow. During one of the sessions, David Hornik of August Capital said, “If you don’t have dealflow, you don’t have anything.”  Echoed by Constance Freedman of Moderne Ventures, she pushed for differentiating yourself from other investors.

Whether it is your industry expertise, personal network, or unparalleled access, investors should be able to articulate how their assets power their investment criteria. Jeff Clavier of SoftTech VC encouraged everyone to have “a clear schtick” because at the end of the day smart founders will optimize for investor-market fit.

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Capturing a great session with Jason Calacanis

4. Be transparent with others, honest with yourself

This tip will go a long way, allowing you to attract the best relationships, utilize your time efficiently, and build your brand.

“Be clear about your investment filters and make sure they are known by founders, investors, everyone.”

Dave McClure tells us, “Be clear about your investment filters and make sure they are known by founders, investors, everyone.”

This will help you avoid pitfalls of herd mentality or just falling in love with the problem the company is solving, as well as not wasting meetings with founders you would never back.

Another area of transparency that requires some introspection was brought up by Mary Grove of Google for Entrepreneurs, who said that while it’s widely known that diversity fosters innovation, she pushes investors with the question of “What are you doing to brand yourself or understanding of your own biases?”

Lastly, Jason Calacanis of Inside.com and LAUNCH spoke to always giving back to founders with something constructive, regardless of his investment decision. For each meeting, Jason shared that he takes time to thoughtfully respond to the founder(s) with feedback on what was positive and candid concerns around potential challenges.

While this is not an exhaustive list of how to be a more valuable investor, it’s a start to what is a long journey journey ahead should you choose to become one.

As far as 500 Startups is concerned, this is the way we have guided ourselves in our various ecosystems and how I’ve tried to reestablish our presence in New York. It was never about blindly setting up an office, but rather working alongside all the other great organizations that are building up the meaningful pieces of the tech scene. The response has been wonderful so far, and I’m looking forward to bringing some of 500’s larger programs and resources to New York.

Keep your eyes out in the coming months for more announcements!

Our 2016 VC Unlocked class
Our 2016 VC Unlocked class

From “Here, Take my Money” to Investing with Vision

We just finished up our 3rd investor training with Stanford Center for Professional Development and we are on a roll!

The highly diverse mix of participants spent two weeks unlocking the secrets of venture capital investing and refining their investment theses.

They participants finished the program with a much clearer vision of where they are going and how they plan on getting there.

They also left with a certificate from Stanford, a maroon baseball cap and a crazy, fun group of friends and future co-investors that were very excited about their new investment theses!
VCunlocked2

The Venture Capital Unlocked program ran from July 25th – Aug 5th and was held at Stanford University and the 500 Startups accelerator in Mountain View.

Diverse Geographies + Diverse Investment Backgrounds = Magic

Even though 500 Startups purposely designs its program to attract diverse participants, this time we actually had at least one representative from every continent except Antarctica (maybe next time?).  

Of the 28 participants, 70% came from outside the United States and 40% of the class was made up of female investors.

Participants came from a variety of investment backgrounds, including angel investors (30%), representatives of existing venture funds (26%), accelerator fund managers (18%), family offices looking to expand into tech investing (16%), government funds (5%), and investors with a social impact focus (5%).

Screen Shot 2016-08-16 at 11.25.16 AM

Before joining the program, most participants had executed somewhere between 0 and 20 deals, with the average person having made 5 deals. As a class, they already have over 100M raised and ready to invest.  

Most of them plan on raising more and deploying about 150M over the next 3 years, with an average of 30 deals per person.

200% Increase in Confidence in Investment Thesis

During the program, 500 Startups investment partners and Stanford professors helped participants rethink their investment theses and strategies.

At the beginning of the program, only about 25% of participants reported feeling confident or very confident about their investment theses.

They started the program with investment theses such as, “I invest in companies referred by trusted friends.” Another participant said, “To date, my investment thesis can be best described as ‘here, take my money’. In the future, it’ll be ‘you can have my money only if you fit my investment thesis’.

However, throughout the two weeks, many people took the time to really ask themselves hard questions about their investment strategy and the strengths they bring to the table.

By the end of the program, 73% of class had significantly changed or refined their investment theses, and 70% reported feeling very confident about their new thesis.

Participants presented their Investment Theses to 500 investment partners, Stanford professors and fellow participants
Participant Investment Thesis Presentations to 500 investment partners, Stanford professors and classmates

Strengthening Investors’ Opportunity Assessment Skills

The program’s agenda was packed with back-to-back activities in which participants developed their opportunity assessment skills, interacted with founders at 500 Startups’ Preview Day and Demo Day, and engaged in lively debates among themselves about the merits and drawbacks of startup deals.

They dove into cap tables and term sheets, analyzed the legal and financial considerations of running a fund, and looked at how to help founders with M&A and exit strategies.  

The investors also got to hear from some of the top VCs in the Valley. Their favorite session by far was a shark tank-like session in which Jason Calacanis, one of the most active angel investors in the world,  interviewed 2 founders from our current batch. He asked the founders many tough questions and revealed in a “sportscaster” style side commentary how their answers sounded to investors.

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Jason Calacanis and Dave McClure share their words of wisdom with program participants

What Participants Had to Say about the Program

Participants said the program helped them structure their previous knowledge of venture capital and increased their investing confidence.

They left the program with an incredible network of friends and partners who will help them on their journey as new VCs and angel investors.

Here is what some of our participants had to say about the program in their own words:

- Bonnie Lo, Partner at NewQuest Capital Partners, Hong Kong
Bonnie Lo

VC Unlocked is a great introduction to Silicon Valley startup investing.  Its an opportunity to access some of the top investors in the community and hear from them their experiences first hand.  For those who are interested in raising a fund to invest in start-ups, this is a great introductory course. Touches on structure and considerations of fund raising, as well as investment approach. Helps those who have some idea on their investment thesis to hone in on their thesis and strategy.  The class is very diversified and helps to build bridges with like-minded investors across the globe. There are almost 50% women and 12 countries represented!

– Bonnie Lo, Partner at NewQuest Capital Partners, Hong Kong

Sharif El-Badawi, Partner Lead, VCs and Startups at Google, Mountain View, CA
Sharif El-Badawi

VC Unlocked brings together the brightest emerging investors from around the world for an intense immersion into the intricacies of academic and real world venture capital. Students learn from Stanford professors, industry legends and evolve their investment theses in real-time while getting a chance to engage with real startups and founders at Demo Day.  

– Sharif El-Badawi, Partner Lead, VCs and Startups at Google, Mountain View, CA

JP Duque, Founder at Cantera Capital, Mexico
JP Duque

VC Unlocked delivers a powerful mix of world-class academics (Stanford) and insightful, actionable advice (500 Startups and many notable guest speakers) – in a candid, off-the-record environment. Learning from and building a network with my classmates, a global and diverse group, was equally rewarding. I highly recommend VC Unlocked if you are serious about VC.

– JP Duque, Founder at Cantera Capital, Mexico

Kenza Lahlou, Co-founder of StartupYourLife, Morocco
Kenza Lahlou

VC Unlocked was a truly unique and valuable experience for me. I learned a lot and met incredible people both on the team and participant sides. It helped me clarify my vision and investment thesis, answer the questions I was asking myself and double my confidence in what I want to achieve.

– Kenza Lahlou, Co-founder of StartupYourLife, Morocco

How To Pitch A VC

“Everyone” understands the high-level goals of a pitch: Make yourself memorable, and drive home your product’s value.

But working out how to put it all into one, non-boring pitch is another matter altogether — and something we work on extensively as part of the 500 Accelerator.

Over the years, we’ve learned that sticking to a step-by-step strategy for pitching VCs is a common struggle for startup founders.

Do they introduce themselves before or after their companies? Should they list their most impressive metrics upfront or work them into the pitch? What’s the proper way to end investor conversations?

Good pitches follow a rigorous structure for engaging investors and proving a company’s value.

Like all good marketing and sales, the startup pitch process starts before you ever walk into the office—it starts with research.

1. Know Your Audience

Before you ever walk into a VC’s office, you need to research the person you’re going to be meeting and adapt your strategy accordingly.

First you have to understand his/her interests:

  • Does the VC have expertise in your area? Adjust your pitch according to how much background knowledge they have.
  • Have they had any successes? If so, frame your company in a similar light.
  • Did they publish mission statements? Figure out their priorities and focus on addressing them.

Then you have to understand the logistics. You need to make sure the fund is in a position to invest in you and that you’re talking to the people who can make it happen:

  • What is their fund size? If they have a $25 million fund, they won’t cut you a check for $10 million.
  • Where are they in their lifecycle? If a firm is towards the end of their fund, they’ll be more selective in writing their last checks.
  • Who are you meeting with? If it’s someone below partner, he/she won’t be making any decisions. You may still want to meet w/ him/her, but it’s important to know.

What you’re trying to find is the simplest possible explanation of your company’s value—tailored for the VC you’re meeting. When you figure it out, practice it again and again until there are no weak points in your presentation.

2. Grease The Wheels, Then Get Straight To The Point

When you walk into the room, your first instinct is going to be to jump right into your pitch. If you do this, you’re wasting a valuable opportunity to refine your pitch for these particular investors.

Instead, start by asking them one question: “What is the most important thing you want to make sure I cover?”

This answer is hugely helpful in focusing the rest of your presentation. If they ask about market size, you’ll know to spend extra time covering it. If they ask about your team, you’ll know where to take a deeper dive.

Opening with this question also gets them engaged early in the process, before you’ve begun to really pitch your product. It helps to set a casual tone for the pitch, which is a huge boost to you.

Have A Casual Opening Conversation

Investors aren’t just investing in your company, they’re investing in you. Beginning with a causal conversation engages them person-to-person, instead of presenter-to-presentee. That connection can be very persuasive.

There are many casual conversation openers, like bringing up a mutual connection, but the key is to give the best, most authentic impression of yourself. Scott Friend, managing director at Bain Capital Ventures, says that he comes to pitches with two questions in mind:

  • “How good of an evangelist is this person going to be for their company?”
  • “Is this someone I would want to go to work for?”

Both of these questions center around your charisma and character, two things you can impress early on with some quick conversation. However, don’t let the conversation prattle on. Keep it to a few minutes tops, and then get into the meat of your pitch.

Start Things Off With A Succinct Tagline

Get to your pitch’s core by introducing your company with a tagline and short explanation. Right out of the gate, you want investors to know what they’re looking at and why they should care.

A good tagline should be seven words max, and should hint at your company’s vision in a memorable way.
Curios Following your tagline, you need to explain what your company does. Do this in less than five seconds, in language anyone can understand.

For example, “We make Facebook ads easy” is a good, straight-forward explanation of your service. “We drive synergistic mobile bitcoin monetization through international arbitrage using a distributed GPU cloud-based computation and transaction engine written in assembly,” is a mess.

The last thing you want is to ask a VC to waste mental energy figuring out your convoluted explanation.

3. Segue To Your Numbers

Now that you’ve piqued investors’ interest, you want to get them engaged with your company’s story. This brings you to a fork in the road:

  • If you have strong metrics, make sure to bring this up early and be specific.  e.g. “I founded this SaaS company two years ago, and today we’re doing a $2m runrate.”
  • If your metrics are weak, begin your story by focusing on how massive the problem is. e.g. “I founded this company after realizing there are a million teenage cricket players like Jim, unable to get a date.”

When you talk about your metrics, you have to make sure they’re integrated into your company’s story. You can’t just say “We have 1000 downloads.” Without context, your metrics don’t make sense.

Showcase Your Most Relevant Traction Metrics

In general, the further down the funnel a metric comes from, the more valuable it is.

For example, having 20,000 downloads doesn’t mean you have 20,000 customers right now. Your active users, on the other hand, show how many top customers you have right now.

Depending on the specifics of your business, your actual metrics might differ, but they should be related to these:

  • B2C Companies: DAU / MAU > Downloads > Partners
  • B2B Companies: Revenue > Number of Customers > Pipeline leads

Maybe your B2C service is a web app, so you track user registrations instead of downloads, but in general this is how you should prioritize your metrics.

Once you’ve decided which metrics to show, keep three things in mind:

  • Do your numbers support each other? If you have a huge number of B2B enterprise-level customers but your revenue is low, investors will sense something is wrong.
  • Are you using industry standard metrics? Making a VC translate your “custom” metrics overcomplicates things.
  • Can your metrics stand alone? If you have weak metrics, highlight some strategic partnerships to prove you have the infrastructure for growth.

It’s important you follow this strategy when you’re focusing on traction metrics. When your traction alone isn’t impressive, however, you’ll need a different approach.

Highlight Your Potential Growth With Market Metrics

When your traction is weak, you can always use market metrics to underscore how high your ceiling is. Market size and availability are key here.

Airbnb’s first pitch went this route:

AirBNBBy breaking down what their company could be in such a simple diagram, investors understood the exact segment of the large market they were attacking.

When you take this approach, you have to convince investors that you understand the problem that customers in this market face and that your product is the best solution to it. You need to be able to describe the specific segment of the market, the specific problem, and your product’s specific and differentiated value in a way that anyone on the street could understand.

If not, it’ll look like you identified a large vague market but couldn’t figure out how to penetrate it.

4. Tell Your Product’s Story

After showing investors why they should care about your product, you’ll be tempted to show off all the features you’ve spent time developing. But investors only care about the problem your product solves, and why it’s the best at solving it.

The most powerful way to explain your product’s value is with a story. Speak slowly and naturally as you tell investors how you, or a hypothetical person (preferably a real one), experienced this real life pain point, and how you dreamed up your product to fix it.

You want your story to be streamlined and approachable. It should make your product’s value obvious, and it should engage investors on a personal level.

If you don’t have a story, you can still explain the problem your product solves, but you’ll sacrifice the personal engagement a story brings. Still, this is a better option than telling a story no one can relate to.

Showing The Product’s Value

When it finally comes time to explain your product, focus on its benefits, not its features. The difference is this:

  • Benefits: What your product helps customers accomplish. e.g. “The iPod puts 1000 songs in your pocket.”
  • Features: What your product does. e.g. “The iPod is a digital music player with 1 GB of storage.”

These benefits are why customers will buy your product and help grow your company, which is an investor’s top concern. However, you’ll need to incorporate your benefits into your company’s story, and you shouldn’t make it sound like they were easy to develop.

Stories without contrast are boring, and investors want to hear about your ups and downs. They want to hear how you struggled early on, what roadblocks almost kept you from building this solution, and how you overcame.

These contrasting points make your story memorable, which should be a primary focus in your pitch. But being memorable alone is not enough. Once you’ve engaged investors with your story, you need to convince them that your solution is the best.

Pinpoint What Makes Your Company Profitable

Explaining your product’s value is one thing, showing how that value becomes revenue is another.

There are three aspects to this:

  • What makes you better than your competition?: Prove your market expertise and highlight your competitive advantage / differentiation.
  • How are you monetizing?: Explain clearly how you’re turning this advantage into dollars.
  • Are you profitable right now?: Compare metrics like CAC to LTV to prove your current profitability.

Your company needs one amazing thing that makes it a real winner, and this is your competitive advantage. More than that, you need a clear path to converting that advantage into profit, and some evidence that your plan is working.

However, investors aren’t just evaluating your product, they’re evaluating you. They need to have faith in your team’s ability, and it’s your job to instill that belief.

5. Sell Investors on Your Team

Investors want your story to be about more than a great product, they want to know how special your team is. They want to see that when things looked grim, your team had the grit and skills to keep the company going.

Investors are also particularly interested in teams because companies pivot all the time in search of opportunity, but their core team usually remains consistent.

Back when Airbnb was still AirBnB, Paul Graham emailed Fred Wilson to urge him to invest. When Wilson said he was skeptical about the product in its current form, Graham told him to focus on the team, saying “Ideas can morph. Practically every really big startup could say, five years later, “believe it or not, we started out doing ___.”

Selling them on why your team is both exceptional and resilient enough to grow your company is critical to instilling confidence in your investors. For a great example of this, look at 500 alumni Headout.

How Headout’s Team Raised $1.8 Million

Headout is an app that handles same-day event booking for travelers. Their pitch raised $1.8 million at our February 2015 Demo Day. Look at their team introduction to see why.

HeadOut1Building a recommendation engine that covers vastly different cities requires a strong team of developers and business development. The team has a balanced skill set that made this a compelling investment to investors.

HeadOut2However, more than just being balanced, the team showed hustle and strength by tripling their revenue in just three months.

In just a minute-long pitch, the company was impressive to a lot of investors.

How To Walk Out Of The Room

Now that you’ve reached your pitch’s conclusion, you need to make a clean exit.

You’ll want to give a very brief summary of your presentation in a few sentences. Include what you do, how you do it, and your key metrics. As a closer, use a memorable phrase, possibly reworking your opening line to include metrics.

There will likely be questions as soon as you finish. Stay confident. Keep your body language and voice natural, and converse with investors as if you were talking to another founder. Always bring the conversation back to your company’s core value.

That value is what investors care about, not just the flair of your presentation. If you stick to this formula to showcase that value, you’re going to be having much more successful results when you’re walking into those offices on Sand Hill Road.

Lastly, you’ll want to have a strong call-to-action.  Find out what are the next steps and make sure not to leave the room without understanding specifically what is going to happen next and on what timeline.  Good luck!

>> Applications for the 500 Accelerator are open now. Apply for Batch 18 here. <<