Tag Archives: Angel Investor

How Wordcab Will Change Business Communication Forever

September 8, 2022 tremendousblog 1 Comment

Like everyone else, I get invited to a ton of Zoom calls these days. Even if the information sounds useful, I often don’t have time to attend!

But what if I could read a brief, accurate summary of every call in minutes?

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That’s what Wordcab’s API can do. This incredible new startup based in NYC can summarize Zoom meetings, customer service phone calls, sales calls, and a whole lot more.

When the co-founder, Aleks, pitched us, he even summarized his own presentation using Wordcab!

Sure enough, a perfect one sentence summary popped up.

You can even vary the length of Wordcab summaries depending on the level of detail you need.

Do you want to get the information down to a sentence or two? Or would you prefer a few paragraphs that give you more info?

Either way, Wordcab is on your side.

I was extremely impressed with Aleks’ strong customer focus. He knows exactly what his customers need and makes sure they get it, no matter what.

That’s the kind of company you want to do business with. It’s also the kind of company I want to invest in.

In time, Wordcab may be used to summarize emails, documents, and all forms of business communication. This would be a true revolution in the way we work, making us dramatically more productive.

I’m delighted to be an investor in their recent pre-seed round! I can’t wait to see this great team scale up and change the business world forever.

An Investor’s Dream Cold E-mail

December 7, 2021 tremendousblog Leave a comment

If you’re a startup founder raising money, you’re going to be sending cold e-mails. Lots of them.

So what pitch gets angel investors and VC’s excited, and what turns them off?

Here’s the e-mail I’d like to get:

From: travis@ubercab.com
To: jim@filthyrich.vc

Subject: UberCab intro – everyone’s private driver

Hi Jim,

Do you hate taking taxis? Me too.

That’s why I started UberCab. UberCab lets anyone get a private driver in minutes, right from their smartphone.

We’re seeing some great early traction with 21% CMGR in the last 3 months.

We’re currently raising a seed round to help us take over the taxi industry.

If you’re interested in learning more, let’s set up a time to talk!

Thanks,

Travis Kalanick

Why is this such a great e-mail?

1) Clear value proposition. It’s right in the subject line. Who wouldn’t want their own driver, if they could afford it? And it’s restated beautifully in more detail in the first two paragraphs.

If you can clearly articulate your startup’s reason for existence, you will do much better finding investors, employees, and customers.

2) Hard data showing real traction. Travis gives us the plan and the big picture “why.” But he also gives us solid data we can’t argue with.

Real people are paying real money for this product. Revenue is growing an average of 21% a month (Compounded Monthly Growth Rate), an outstanding track record.

That chart alone will get a response from almost anyone. And if you don’t have great revenue growth, how about user growth, or even visits to your landing page?

3) It’s short. Investors like me get countless e-mails a day. So if a message is long, it’s not likely to be read.

4) It’s bold. Travis doesn’t talk about modest growth. He talks about completely taking over a major industry.

VC’s and angels are in the business of finding giant successes. It’s the only way to pay for all the losing bets!

You need to show them you will be huge.

4) Company is actively raising money.

Investors are in the business of making investments. While they may be interested in just meeting and talking, they’re probably going to be more interested if you’re actively raising a round.

What isn’t here:

1) Irrelevant details like winning a pitch competition, being in Forbes 30 under 30, etc. Save that for page 7 of the deal memo, if at all. Focus on product and customers.

2) Every fact on the business. You will want to write a detailed deal memo including lots of info on the product, key metrics, future plans, etc. But an e-mail intro isn’t the place for it.

3) Just an idea. No knowledgeable investor is interested in funding an idea alone.

I hope this helps! And if you have questions or thoughts on finding investors, please leave a comment at the bottom!

This Hoboken-Based Rocket Company Could Revolutionize Space

June 3, 2021 tremendousblog Leave a comment

In the shadow of New York City, I walked down a quiet street beneath an overpass. I came across a squat brick building with no windows. On the door, a small sign was the only indication of what’s inside: Hudson Space Systems.

Founded by graduates of the Stevens Institute of Technology, Hudson Space Systems (HSS) is working to make cheap, reusable rockets available to everyone. The microgravity (weightlessness) that being high above the earth provides is critical to research in medicine, physics and materials science. Cell cultures grow faster, physics experiments are simplified, and materials are tested like nowhere else.

But this invaluable scientific platform has a problem: waiting lists for launches are long and costs are high. HSS’s 3D printed, resuable rocket aims to bring the cost down by 40% and increase capacity until booking space on a rocket launch is as easy as booking a dinner reservation on OpenTable.

SpaceX proved rockets can be reused. What SpaceX did for launching satellites, HSS hopes to do for launching science experiments.

Hoboken, New Jersey, with its density and proximity to New York City, might seem like the last place where you’d find a rocket company. But it’s one of the most educated cities in the country, with over 80% of the population holding bachelor’s degrees or higher, and has a technical university right in town. Tech companies often grow out of universities, as this one did.

Will HSS be able to realize its vision? That’s anyone’s guess, but they have already raised $100,000 in 2020 and are $162,000 into a $250,000 raise that closes in a few days. Since they are currently working on protypes and don’t yet have a product in market, this company is earlier on than the startups I invest in. But if you like getting in on the ground floor, and especially if you have expertise in this area, it could be a great opportunity.

Best of luck to these hardworking men and women on their exciting new business right here in the Garden State!

India Is Soaking Up Venture Capital Like a Sponge

May 27, 2021 tremendousblog Leave a comment

It’s not just about the Bay Area anymore. Indian startups have raised venture funding at a record pace this year, on track to double from 2020:

Startups raised total investments of $7.8 billion in the first four months of this calendar year, which is almost 70% of the overall corpus of $12.1 billion raised in entire 2020 and more than 50% of $14.2 billion raised in 2019, data from US-based research firm PitchBook shows.

More here.

The average deal size is also near record highs, at $25 million. The most valuable venture-backed startup in India is Paytm, a payments and e-commerce company, at $16.7 billion.

India has seen 13 companies reach unicorn status this year ($1 billion valuation and up), an impressive figure. The US remains far and away the leader, with 288 total unicorns as of last month. China has 133, and India is third at 32.

As a US-based investor, I see a lot of companies pitch, but not those from India. The American and Indian VC markets don’t seem well connected. I’m not sure how to fix that, but I’m eager to have access to this big crop of quality companies. The most active VC firms in India are a mix of American and Indian organizations. With numerous people from India staffing (and starting) US tech companies, I hope to see more connections between our markets in the future!

Dig into these posts for more on startups and venture capital:

Photo: “Agra – Taj Mahal” by micbaun is licensed under CC BY-NC 2.0

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Business, Podcasts, Technology

This Is How Vlad Tenev Built Robinhood

April 16, 2021 tremendousblog Leave a comment

“You can break down Robinhood into a series of small steps, the first one being start Robinhood, and every subsequent one being some variant of don’t stop and keep going, right, and you end up where we are today. “

In his mid-20’s, Vladimir Tenev lived in New York City. His apartment was tiny and spare. All his time went into his high frequency trading startup. Then mom came to visit.

When she saw his shabby surroundings, she began to cry. She told him she had a friend who worked at Macy’s. Maybe, she could get him a job there.

It must’ve taken great fortitude for Tenev to push ahead with his own business, despite few signs of success and the anguish it caused his family. But push ahead he did. Today, the company he built, Robinhood, has over 13 million users and plans to IPO soon at a valuation of around $40 billion. Tenev’s net worth exceeds $1 billion.

Tenev came to the United States as a child from Bulgaria and attended the elite Thomas Jefferson High School for Science and Technology, which US News ranks the best public high school in the entire country. What would’ve become of Tenev if he had stayed in Bulgaria? He might have had a very normal life. But giving this smart kid a superb education and access to a great entrepreneurial ecosystem turned him into a billionaire executive.

Tenev didn’t stop learning when he finished school. He taught himself to write iOS apps by watching free Stanford courses online while commuting on the Caltrain. It really shows you what a person can accomplish learning on one’s own for nothing now that knowledge is much more freely available.

Robinhood faced numerous obstacles along the way, but Tenev and co-founder Baiju Bhatt blasted through them. It took two full years of constant work to build their product. Venture capitalists were highly skeptical of their business. How could they make money without charging commissions? How could they beat giant competitors like Etrade and Charles Schwab? And could a couple of math guys make a beautiful consumer product?

But they kept pitching, and ultimately raised $250,000 from Google Ventures. Tenev couldn’t even get a job interview at Google 4 years prior. What if he had let that discourage him from ever approaching Google for an investment?

Just days before a meeting to approve a critical license Robinhood needed to operate, they were still $500,000 short of the required capital. Only the birth of an executive’s baby saved them by providing an excuse to postpone. By the new date, Tenev had raised the money.

A key lesson for startups: Robinhood didn’t worry about monetization until it achieved a large user base. It was confident that, like Instagram, winning enough users would give them all the opportunities for revenue they’d need. And they couldn’t put the cart before the horse.

What sticks out to me most about the Robinhood story is Tenev’s perseverance. At first, his business looked laughable. Later, it gained a bit of traction but faced seemingly insurmountable obstacles in fundraising.

But he just keep pushing, day after day. Now, 11 years after he started his first company, he sits at the helm of one of the hottest startups in the world.

For more on startups, check out these posts:

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Photo: “File:TechCrunch Disrupt NY 2016 – Day 2 (26902081436) (2).jpg” by TechCrunch is licensed under CC BY 2.0

Business, Technology

The Ultimate Score: Turning $300k into $2.4 Billion on Coinbase

April 14, 2021 tremendousblog 1 Comment

In 2012, investor Garry Tan got an e-mail. A young Airbnb engineer named Brian Armstrong had sent him a tiny fraction of a bitcoin, worth just a few cents. But this message piqued his curiosity. How many people send you money for nothing?

Tan happened to be one of the few people other than Armstrong paying attention to bitcoin at the time. The digital currency had only been in use since 2009. Tan had actually bought some before, using a janky website called Mount Gox. The process was frustrating. He knew there had to be a better way.

So Tan tried Armstrong’s new system. He found buying and selling bitcoin a breeze, and happily wrote a $300,000 check to Armstrong’s nascent company, Bitbank. That company became Coinbase, which went public today on the Nasdaq. Its current market cap is nearly $100 billion.

Tan’s initial investment is now worth $2.4 billion, making him one of the wealthiest men in America. But why did he spot Coinbase when other investors turned them down?

Tan’s familiarity with cryptocurrencies and the problems in buying and selling them was a major factor. He could see Coinbase’s technology was better than what he and other users had had to put up with, so using it would be a no brainer for others. He had also studied the removal of the gold standard in 1971 and was convinced fiat money was risky.

What do I take from this experience, as an investor? It tells me to look for products in sectors I’m familiar with, and use the product myself if possible. And if a product solves a problem for me, it’s likely to solve it for others as well.

It also makes me want to read widely and keep up with current technologies as much as possible. The more familiar I am with the new technologies businesses are using, the more good shots at a great investment I will have.

I hope to have my own 6,000x bet some day!

For more on startups, venture capital and crypto, check out these posts:

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Business, Technology

Venture Funding Just Doubled in 1 Year

April 8, 2021 tremendousblog 1 Comment

I came across an incredible stat last night:

Worldwide venture funding has nearly doubled YoY reaching $125B and grew by half QoQ in Q1 2021, according to Crunchbase. On average, two startups crossed the unicorn valuation threshold each working day during the first three months of the year.

Users increasing their engagement with online tools due to the pandemic, along with easier exits via Special Purpose Acquisition Vehicles (SPACs), were two big factors in this extraordinary increase. I’d also be willing to bet that a big jump in the money supply, which is showing up everywhere from meme stocks to cryptocurrenices, is a factor.

In startups I’m looking at, I’m seeing valuations in the $10-15 million range even on seed stage companies. A few years ago, that might have been $5-6 million. I can’t say I love those higher prices, but if a company achieves a valuation of $1 billion (not to mention $10 or $100 billion), whether you got in at a $5 or $15 million valuation may not matter.

I’ll be watching to see if these trends continue or if the industry is setting itself up for a crash. With consumers becoming more and more used to doing everything online during 2020, along with loose monetary policy, I think that any downturn is probably quite a ways off.

For more on venture capital and startups, check out these posts:

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Photo: “Rocket Launch SpaceX” by Schwabenknipser is licensed under CC BY-ND 2.0

Business, Podcasts, Technology

Key Metrics for Startups: Consumer vs. Enterprise SaaS

April 7, 2021 tremendousblog Leave a comment

I listened to a fascinating podcast this morning in which Jason Calacanis, an early investor in companies including Uber and Calm, broke down how to measure startup success. The key metrics depend on what kind of company you’re looking at:

Consumer companies:

Of the biggest users, how many are retained? For example, if someone used the app 3 times a week on average last month, how likely were they to return this month? Much of your app engagement is driven by the most active users.
What is the customer acquisition cost versus the revenue from each customer? Half to two thirds of the spending of fast growing consumer companies is marketing, even outpacing staff salaries! And that makes sense if you’re customer acquisition cost is $50 but you can get $100 from them. You should do that all day. This is also relevant for SaaS startups.
For marketplaces, how often do transactions happen? Higher revenue transactions, like booking an Airbnb, can be less frequent. Low revenue transactions, like taking an Uber, need to be more frequent.
Also for marketplaces: what is the take rate? How much money do you get from each transaction?

Enterprise Software as a Service (SaaS) companies:

How many customers “land and expand”? Since enterprise SaaS tends to have a lower churn rate (customers leaving), how many become customers and then buy more licenses (“seats”) for more of their staff is key. Another way customers can expand is if you start selling more products and they buy those too.
Churn rate is less relevant. You don’t see as many customers cancelling because businesses put more consideration into a software purchase and then rely on it for their company’s success. A consumer is much more likely to take a flier on a Hulu membership than a company is to do so on a SaaS product. This means if you keep selling enough licenses and new, adjacent products to existing customers, you don’t even need to increase customer count much. This is less true for consumer startups.

Bonus: Dating apps face some special challenges. Facebook and Instagram sometimes ban them from advertising, and it’s very difficult to get them approved in the Apple app store. This may be because some are used to scam people and companies want to protect their users.

Some great info in this podcast! I’ll definitely be using it to guide my investment decisions. On the whole, SaaS seems a lot easier. Customers are less fickle, have deeper pockets, and are more willing to pay for something than consumers who have been trained that if it’s on the internet, it’s free.

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Photo: CEO of hot startup Clubhouse, “Paul Davison” by jdlasica is licensed under CC BY 2.0

Business, Technology

This Is How Startups Pitch Investors

April 2, 2021 tremendousblog 1 Comment

You walk into the room, palms sweating. You go over your script in your head. You pray to God your computer doesn’t crash. Eyeing you skeptically are a bunch of grey haired money guys. Don’t screw this up.

At the very least, that may be how the public imagines the meetings where startups pitch investors. The reality isn’t quite so dramatic, especially now that virtually all meetings are conducted via Zoom. I just got off such a meeting myself with a Software as a Service (Saas) company that was looking to raise about half a million in funding. While I can’t discuss the specifics of the company, here’s an overview of what these meetings are like:

1) Intro: The founders describe what the company does, what the market is like, and how the company has grown so far.

2) Deck: The founders go through a slide deck (PowerPoint presentation) that provides further details on what their product does, what makes it different from its competitors products and the size and growth of the market.

3) Demo: This is when the founders actually show you the product in action. I found this part the most interesting. I remember doing software demos myself when I worked in the field, and invariably, something seems to go wrong that worked in rehearsal 1,000 times. But investors understand that, especially if you can get it working in a few minutes.

4) Q&A: The other investors on the call asked a lot about the competition. How is this company different from others in its area? What stops larger companies from shoving their way into the market, elbowing you aside?

I was immediately struck by what a small room one of the founders was in during the call. His chair appeared to nearly touch the door behind him. This brought a smile to my face: they’re not using investor money to pay themselves exorbitant salaries before the company is a clear success.

The other co-founder mentioned getting a refund of $30 from a vendor that accidentally overcharged them. I don’t think he was trying to make any particular point with this story…it was an incidental detail to a larger narrative. But it made a strong impression on me: these are frugal founders that will be good stewards of the capital they’re raising.

I can’t say for sure, but I think this company has strong odds of being funded by our investor group. The round is led by other investors and they’ll already be getting a substantial sum from them, in any event.

The competence and frugality of the founders, coupled with year-on-year growth in the hundreds of percent, is likely to convince a large number of investors.

For more on startups, check out these posts:

Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too!

Photo: “Rich Uncle Pennybags” by Sean Davis is licensed under CC BY-NC-ND 2.0

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Tag Archives: Angel Investor

How Wordcab Will Change Business Communication Forever

An Investor’s Dream Cold E-mail

This Hoboken-Based Rocket Company Could Revolutionize Space

India Is Soaking Up Venture Capital Like a Sponge

This Is How Vlad Tenev Built Robinhood

The Ultimate Score: Turning $300k into $2.4 Billion on Coinbase

Venture Funding Just Doubled in 1 Year

Key Metrics for Startups: Consumer vs. Enterprise SaaS

This Is How Startups Pitch Investors

An angel investor's take on life and business