4 VC meetings, many more to go
It has been a while since I blogged and much has happened since. Note that I will be transforming the blog into more of a short "daily musings of a start-up founder", similar to Fred Wilson's blog entitled "musings of a VC in NYC" that I have been enjoying so much (http://avc.blogs.com/).
I was recently in Williamsburg, VA for a panel discussion on regulatory issues affecting broadband deployment. This is connected to my other personality as the "engineering" component of Isfan Solutions Inc. ... a consulting firm my wife and I founded a year ago (she had been running her own company for about fourteen years). A very interesting panel discussion and got to very briefly check out this pretty cool colonial town. Will definitely go back this summer with the family on our way to Charleston, SC to celebrate my niece's 16th birthday.
Also got to see Roger Waters play a fantastic show in Ottawa while the Senators unfortunately lost to the Anaheim ducks in the Stanley Cup final. It was a truly magical show and I strongly recommend not missing it if you have a chance (though it was extremely political ... a pink pig flying around the arena with anti-war and anti-bush messages).
On the VC front, we finally kicked off requests for VC meetings and managed to pitch to a few major VCs and a strategic investor so far and overall it went very well. So what does that actually mean? What makes an entrepreneur think a pitch went well?
1) very likely to have a follow up meeting
You don't really know until the next meeting actually happens. However, indications are that we will have follow up meetings with an expanding group of partners.
2) lots of good dynamic discussion
All meetings involved lots of great discussion with many great comments and questions. The partners were clearly enganged and involved which shows some interest in the topic. They also appeared genuinly interested to continue the discussion.
3) learned something new and useful about the VC and ourselves
In one case, the VC is very interested in knowing about our technical intellectual property. Unfortunately, we didn't focus on that very much but at least we now know it is very important to them so that will be a major focus during the next meeting. Fortunately, my partner and I both have credibility in terms of IP as we both have patents and history in complex technology. We have lots of patentable concepts but need to get moving on filing them.
In another case, it was less about technology but more about go-to-market strategy and shooting for the stars. We are actually not planning for a huge A round after the seed and are able to become profitable on only one round. This can create a perception that we are not thinking big enough even though we are. The basic question was "once your trial is complete and you have validated/adjusted your assumptions, how do you aggressively bring this to market to secure your place in a significant way, i.e. land grab". Another question in a similar direction was "if you could raise more money than projecting right now, what would you do differently?".
Answer I gave was not great ... more work there to make the our case and pitch that aspect more convincingly.
4) every pitch gets better
Every time we pitch to a partner, VC or other interested party, we learn something very valuable that gets folded back in to the plan and pitch and the whole story gets better.
I continue to be convinced that we are on to something significant and have credibility in the space. If we continue to evolve as necessary, make every pitch better than the last one and get follow up meetings with partners and VCs, we'll close our funding and step on the gas. In the meantime, we have been experimenting and implementing some of our concepts and I'm really enjoying being a customer which bodes well for the future.
Let me leave you with a question/comment that I hope will generate some thoughts and feedback. Our strategy has always been to think about the consumer first. We want to build a very simple, intuitive and personal service that amazes people by what it can do for them. You always hope that it takes off like wildfire and virally ramps to millions of people. We get picked up by a major player for some crazy valuation and everyone is happy even if we never made a dime. Think YouTube, Skype, MySpace ... you get the picture. However, as I always say, hope is not a strategy. We have therefore been spending a significant amount of time and effort creating a strong go-to-market strategy and business model that actually creates revenue instead of just thinking about how to get as many consumers to sign on, regardless of potential revenue. I believe in solid business concepts and creating a viable entity that can grow and make money without having to cross our fingers and pray that someone picks us up before we run out of cash. Are we crazy?