Hey everyone!
I wanted to put the word out: if you are a great Unity engineer, I have an incredible opportunity for you.
A metaverse startup just raised a big Series A and needs you! I’m an investor in the company and can introduce you to the founders.
If you have the skills and you’re ready to take it to the next level, send me an e-mail.
I’ll see you later today for a full post!
Last Thursday, I was preparing to judge a startup pitch competition. I thought to myself, “How can I make sure every startup hits the key points?”
Then, it came to me: a checklist!
Every time you pitch investors, you need to give them certain key pieces of information. Without those details, they may just move on to the next company.
Make sure that never happens to your business! Whenever you pitch, make sure you check off these 6 key elements:
1) ☑️ Problem. What problem do you solve? For example, Uber solved the problem of expensive, hard to get taxi rides.
2) ☑️ Solution. How do you solve that problem?
Uber makes it easy to get a ride with a simple smartphone app. You always know exactly what you’re paying and where your driver is.
3) ☑️ Traction. Show us a chart of your revenue, broken down monthly or quarterly. Also, compute a growth rate using a tool like this.
Investors want to see a strong growth trend. Make absolutely sure you give them that, if at all possible.
Don’t have revenue yet? Show us monthly active users, signups, etc.
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4) ☑️ Market + Competitors. How big is your market? Who do you compete with?
I don’t get too hung up on complicated market size calculations, but here is a resource on how that is typically done.
I’m more interested in your competitors. Who do you lose deals to? Who do you beat for deals? And why?
Hint: “we don’t have any competitors” is rarely the right answer. Maybe no company does exactly what you do, but who is close?
5) ☑️ Team. This is especially critical for early stage startups. At this point, there usually isn’t a ton of performance to sell.
So you have to emphasize the quality of the team. Why are these the best possible people to take on this challenge?
6) ☑️ Ask. Here’s one of the strangest things I see: a founder telling a great story with solid traction, and then saying “thank you” and sitting down.
Umm, don’t you want something from us? 🙂
Never forget to tell the investors exactly what you’re asking for! Tell us how much you’re raising, at what valuation, and specify if that’s pre or post-money. (If the valuation includes the money you’re raising, that’s “$X post-money,” also referred to as “$X cap.”)
It’s also good to specify what type of fundraise you’re doing. Is it a SAFE, a priced round, or a convertible note?
Say something like this: “We are raising a $1 million SAFE at a $10 million cap.”
If you hit these 6 key elements, you’ll have a solid pitch that gives investors the details they need. You’ll also have a leg-up on other founders who provide incomplete or unhelpful information.
Best of luck on your fundraise!
What do you think makes a great pitch? What did I miss?
Leave a comment at the bottom and let me know!
More on tech:
How Startups Can Dominate the Elevator Pitch
Startups’ Secret Marketing Weapon: Blogging
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Photo: “Startup” by Skley is marked with CC BY-ND 2.0.
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A robotic arm carefully grips the cup as frothy milk cascades onto smooth espresso. It gently places the cup before you.
Coffee is served.
I’m a little obsessed with coffee. I have five coffee makers at home, each for a different style.
But if the next generation of robotics companies has their way, they might all be replaced by a skillful droid.
Founded in 2015, Cafe X makes full-service robocafes that can be found at San Francisco International Airport and elsewhere. Today, they are only sold to commercial customers, but can the home version be far away?
Cafe X’s intelligent robots can make a drink in as little as 20 seconds. It can even make multiple drinks at once!
Best of all, the price is less than half what Starbucks charges.
CEO Henry Hu was inspired by the robotic arms that build automobiles.
A simpler coffee machine could make drinks, but the robotic arm is much more versatile. It can also serve snacks or even be used in restaurants.
The pandemic hit Cafe X hard, but it’s back in service in SFO, Dubai and elsewhere.
The machines cost about $200,000. A quick Indeed search shows most barista positions in the NYC area paying between $13 and $30 per hour.
If the average is even $20 per hour, and a human-staffed store is open perhaps 90 hours a week, it costs $93,600 to staff the store with even one barista for a year.
In an ever tighter labor market, once employers go bot, they may never go back.
Cafe X isn’t the only company bringing Star Wars to Starbucks. In Nashville, Panera Bread is rolling out coffee robots from Miso Robotics.
Unlike Cafe X, Miso’s robot is barely noticeable. It discreetly monitors temperature and time to ensure a perfect brew, but there’s no robotic arm to whisk the drink to you.
The system is designed to assist workers, not replace them.
Miso Robotics also makes Chippy, which fries tortilla chips at Chipotle, and Flippy, which flips burgers for White Castle.
In a white hot labor market, these robots may not cause unemployment. But my concerns about restaurant automation run deeper.
When I go to a cafe, I sometimes chat with the barista and have a little laugh. In a world of sensors and robotic arms, I’ll have no one to talk to.
Those little interactions aren’t the substance of our social life, but they can be enjoyable sprinkles on the top.
Cafe X’s robot amazes me and manages to be cute to boot. But I find a world without anyone to share a brief chuckle with a melancholy one.
Would you try a robocoffee? And what do you think about the future of restaurant automation?
Leave a comment at the bottom and let me know!
More on tech:
Robot Pizzas and the Future of Fast Food
What if Everyone on Earth Had Super Fast Internet for $1?
Robot Hands, Vertical Farms, and the Future of Food
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My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.
Every fruit and vegetable is super fresh and packed with flavor.
I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!
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Hello everyone! 👋
I just wanted to let you know that a really cool SaaS startup that I’m an investor in is hiring now.
They’re looking for senior fullstack or backend developers.
If that’s you, send me an e-mail right away!
They just raised a big seed round and are ready to 🚀.
I’ll see you later today for a full post! 🙂
Photo: “STARTUP CTO” by ceonyc is marked with CC BY-SA 2.0.
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I have something really cool to share with you guys before you head off for the weekend!🕺🎉
An amazing new tool called Snipt.dev launched yesterday. It makes searching for code to re-use easier than ever.
Snipt.dev is a project by Codiga, an awesome “Grammarly for code” tool in which I’m an investor.
I briefly introduced you to Snipt.dev yesterday, but today I’m turning the blog over to creator Julien Delenge to explain what makes this tool so special:
We are excited to announce the release of snipt.dev, a search engine to help engineers find safe and reliable code patterns. Code Snippets are very popular for developers but the ecosystem of tools is very fragmented and not unified. Developers are often looking for snippets to use and spend hours searching on Google, StackOverflow or Sourcegraph.
To help developers find the right code snippet, we built snipt.dev: a one-stop shop for searching for code you can reuse.
A Code Snippet is a block of code you can share and reuse. By reusing safe and proven code, you not only improve your productivity but you also make sure you always import the correct code and are not missing anything (e.g. missing argument, not checking error code or exceptions).
By using rock-solid, proven code, you avoid many common pitfalls and mistakes developers already did. You find the correct block of code to reuse to focus on what matters: shipping code and improving a product.
Writing code is quite complex and requires having a really good knowledge of the language and libraries you are using. Even with languages with lots of abstractions, it is often hard to follow the code path and understand how code actually works! Sharing and using vetted code patterns directly in your IDE maximizes your productivity but also make sure you are using the correct code block for your job!
snipt.dev is a new platform for searching code snippets. It includes a semantic analysis feature that detects what framework, library, or language you are looking for and optimizes the search results based on your criteria. For example, if you look for “react typescript”, the engine will only show snippets related to TypeScript while “react javascript” will show you only snippets related to JavaScript (and obviously, react).
snipt.dev is built to be blazing fast: a request takes just a few milliseconds to come back to you. As with most search engines, results are suggested as you type, showing you the most relevant snippets for your query.
The engine indexes and searches snippets from the Codiga platform. To add your own snippet to snipt.dev, simply add snippets on the Codiga platform: they will be automatically indexed and visible on snipt.dev. Adding snippets is very easy and can be done directly from your IDE using Codiga plugin (see VS Code, JetBrains, or Chrome plugins). You can find more information in the Contribute section of snipt.dev
snipt.dev has been designed using popular open-source libraries (NextJs, GraphQL) and it was natural for us to share this project with the community. You can find this project on GitHub. If you have any comments or issues to report, please open an issue on the GitHub project.
Pretty cool, eh? Have a great weekend everyone! 👋
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You walk into an elevator. As the doors close, Doug Leone of Sequoia steps in.
Suddenly, a lump appears in your throat. Your palms sweat.
This is your moment.
Last night, I went to a fascinating pitch event at a startup accelerator in New York City. Each one had just a single minute to deliver an “elevator pitch” to an audience of operators and investors.
In this challenging format, many managed to paint a compelling vision. So what key elements should you make sure to include, and what should you leave out?
Here are some do’s and don’ts.
Do:
1) State a company name, clearly. Sometimes the name doesn’t pass the “bad telephone” test. I’m left wondering “did they say ‘Aleck Watt” or “Alley Cot’?” and it’s actually “Aliquot,” to take a fictional example.
Make the name clear and easy to understand.
2) Clearly state the value proposition. Instead of just talking about the market, talk about exactly what you do.
If Uber pitched, they could tell us how broken the taxi market is. True, but what does Uber actually do?
Make that value proposition for the customer very clear. “Uber can get you from anywhere to anywhere quicker and easier than a taxi.”
You also want to identify the customer clearly. Is it individuals, businesses, governments?
3) Explain the business model. Too often, it’s unclear how a startup actually makes money.
To take the Uber example, just say “We take 30% of all rides on the platform.” Keep it simple and avoid discussing numerous different revenue streams.
If you don’t tell us how you make money, we’re left to assume that you don’t make any. No bueno.
4) Tell us what traction you have. If your revenue is growing 20% month over month, definitely mention that.
If you don’t have any revenue yet but your user sign-ups doubled this month, talk about that.
Of all the areas of a pitch, this is the one startups miss the most. Give us a reason to think your product is catching on!
Don’t:
1) Leave us wondering what your product does. If we don’t know that within that first minute, you’ve failed.
2) Don’t talk about Total Addressable Market (TAM). Founders often think they can get investors salivating by mentioning that they’re taking on a $500 billion market.
But we know those numbers are often plucked from the air (or a Gartner report). Save it for a second meeting.
3) Mention other business lines you may pursue in the future.
Just stick to the current business. There’s no time for anything else.
The elevator pitch is simple: introduce the company, what it does, and what traction it has. It should give the investor enough information to say, “I want to hear more.”
Best of luck!
What do you think makes a great elevator pitch, and what should be avoided? Let me know in the comments at the bottom.
More on tech:
This Is How Startups Pitch Investors
Fathom: The Podcast Player from the Future
The #1 Reason I Say No to Founders
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Photo: “Help is on the way, elevator, Chicago Tribune, Chicago, IL.JPG” by gruntzooki is marked with CC BY-SA 2.0.
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Let’s say I have a question: “how do angel investors choose startups?” I go to Google and type it in, right?
But what if the best answer is in a podcast? That audio is trapped somewhere in the dark world of RSS feeds, along with great answers to millions of other questions.
Until now! Fathom makes it easy to search podcasts.
Let’s try my search on Apple Podcasts:
Bupkus. Now let’s try it on Fathom:
Right away, Fathom directs me to a highly relevant clip from This Week in Startups, a podcast I love! Jason advises me to diversify my investments and make sure I’m choosing companies with products in market.
Sage advice. Question answered.
Do you see how powerful this is? Tons of smart people are talking on podcasts every day, but unlike text, that info is almost impossible to search.
Fathom grew out of a side project during the COVID lockdown. Here’s co-founder Paul Bloch:
Ken, my cofounder reached out to me and mentioned that during the covid lockdown he’d been working on a prototype AI that could answer questions using podcast content. Ken’s a podcast lover and big Lex Fridman Podcast fan. Ken asked if I wanted to help develop the idea and product with him.
After we started in earnest we felt that there were many more ways we could bring the power of AI to the user and innovate in how people experience podcasts. That’s what brought about the feed of AI-recommended episodes that play AI-generated highlights.
…I believe in January of 2021 Lex Fridman had an interview where he specifically mentions how game-changing it would be to search inside podcasts. That was the moment of kismet that really made us excited about the potential of the product. Months later we had a prototype, incorporated the company, and had our first investor check. Things started moving fast the moment we really committed to bringing our vision to life.
The application is available on desktop or iOS. As a podcast maniac, I’m really excited to be an investor in this great company!
Give Fathom a try and have fun listening to some awesome episodes!
More on tech:
Founders’ Biggest Pitch Mistake
Male Contraception With an Ultrasound Device?
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If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.
Every fruit and vegetable is super fresh and packed with flavor.
I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!
I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order.
Markets are hot. And your startup is growing fast.
Time to raise money at the highest price you can get…right?
Wrong. Lately, I’ve seen companies raising seed rounds at valuations of $125 and even $150 million.
A few years ago, a typical seed round valuation was more like $5 to $10 million. Now, that’s beginning to look quaint.
Getting the highest possible price for your company sounds great, but comes with some serious pitfalls. Here’s why you should resist the temptation to swing for the fences:
1) You don’t have enough time grow into the valuation. Companies I’ve seen raising seed rounds at $100 million or more often have little or no revenue.
Meanwhile, tech companies today are IPO-ing at about 15 times revenue. So for your company to truly be worth $100 million, you need about $6.7 million a year in revenue.
Most companies raise enough money in a fundraising round to last 12-18 months. The cash will rarely last more than 2 years.
Can you go from little or no revenue to $6.7 million a year in just 12-24 months? Doubtful.
What happens if you can’t? A down round, or raising money at a lower valuation.
This will upset your existing investors, who quickly book a loss on their stake. It also is a strong negative signal for your company that could impair your future.
2) You get the bad investors and repel the good ones. Astute investors know they cannot make money on $100 million seed rounds.
So who will you get instead? Novices who will provide bad advice and offer few connections.
Your company will be much better served in the long term if you have Sequoia on your cap table. Their name, the advice they can provide, and the doors they can open will be invaluable.
But if you’re raising at an unrealistic valuation, they’re unlikely to participate.
I know that getting a huge bag of money for a tiny slice of your company is appealing. But if you want to maximize the long term value of your startup, raising at a more reasonable valuation is the ticket.
Aim for a seed round between $8-25 million, depending on how much traction you have. Then get to work building.
There will be plenty of time to score that giant valuation later!
More on tech:
A Day in the Life of an Angel Investor
Is Fathom the Future of Blockchain?
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This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been great so far.
More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me.
Every fruit and vegetable is super fresh and packed with flavor.
I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy!
I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order.
Venture capital funding is growing at an incredible rate. The money pouring into early stage startups, my playground, has increased by billions of dollars per quarter just since 2020.
I see the perverse results of this cash flood every day. Here are a few, from just this week alone:
1) A company raising a seed round at a $125 million cap with no product in market.
2) An uncapped note. The ultimate schmuck investment vehicle…you don’t even know what you paid for your shares!
3) A restaurant raising venture capital.
Restaurants can’t scale like software businesses and are far less profitable. And food is not a winner take all market like many software products.
The standard VC playbook is losing money at first to dominate a market. Then, you make big profits later with your favorable unit economics.
That model doesn’t apply here.
3) A company raising a seed round at a $150 million valuation.
Some investors are now willing to invest in any business at any price. This may lead to more of the fourth thing I saw this week:
4) A company that had raised over $10 million in funding from blue chip VC’s recapitalized, completely wiping out prior investors.
Despite raising a boatload of funding, the company had never found product market fit and had very poor gross margins of about 25%. (A solid gross margin for a software business is more like 80%).
If we don’t want to lose our money like those unfortunate investors, we need some discipline. Here are my standards:
A) No $100 million seed rounds. Fred Wilson of Union Square Ventures proved this model cannot work.
B) No startups without a product in market unless it’s a very high profile founder. We’re taking sold her last company for $1 billion high profile.
C) No uncapped notes.
D) No low margin, old economy businesses masquerading as tech startups.
Who’s with me?
What are you seeing in the startup world? Let me know in the comments below.
More on tech:
Why I just Invested in EyeRate, the Best Online Review Tool
Photo: “Bubble” by zacktionman is licensed under CC BY-NC 2.0
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Amazon Business American Express Card
You already shop on Amazon. Why not save $100?
If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.
Best of all: No fee!
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order.
Last week, I was talking with a young founder who is just starting to pitch investors. She wished she could find a good example of a 3 minute pitch.
So I figured if she was having this problem, others probably were too!
This morning, I made a little video of what I would consider an ideal 3 minute pitch. I used the example of my favorite startup, Uber.
A 3 minute pitch is a key thing to master because startup demo days are often in this format.
It’s also useful if you have brief, individual meetings with VC’s or angel investors like me. You want to pitch in a concise way and leave lots of times for questions.
Why Is This Such a Strong Pitch
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Best of all: No fee!
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.
My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $10 on your first order.
Tremendous 