Elliott Hauser is the founder of Coursefork, a group of university and online educators building open teaching tools. Coursefork were winners of Triangle Startup Weekend – EDU in March 2013 at HUB Raleigh.
Coursefork is in the midst of pitching to angel investors and we’ve learned a ton, so I thought I’d take the time write a post that can hopefully save you time and/or effort. There was a distinct shift for us a few months ago when investors started taking meetings instead of giving us the “keep me updated.” Here’s how we got there:
Keeping track of who you’re talking with is a big pain in the butt. What’s worked for us has been a shared Trello board where we move funding prospects from columns titled Cold to Warm to Hot to Invested as they get there. That way each team member can add and update prospects and we can see who’s contacted who in the comments.
In the beginning it’s easy to lump everyone in the entrepreneurial scene together. Really, though, the people you need and want meetings with evolve over time, and your targets should evolve as well. In the beginning you might want casual meetings with other entrepreneurs.
As you get a sense of who might be interested in helping you, get meetings with them. Angels and VCs should be secondary or tertiary targets. Wait to try for meetings with them until you’re getting consistent interest and positive feedback or you’ll blow your first impressions.
The Ask is as important when you’re first meeting people as it is when you’re pitching, and it should change based on the stage you’re in. If you’re pre-idea, you should be meeting entrepreneurs and asking them about their idea (or startup).
After you have an idea, asking for advice and contacts is the best way to begin building rapport with an investor. To a certain extent they’ll use their network’s reaction to you and willingness to work with you as input to the decision whether to work with you themselves.
Evolve Your Idea
My original idea was something related to data analytics that instantly bored everyone- including me. By following traction (excitement), initially from me and then from those I talked with, I was led to focus full time on the idea that became Coursefork. There’s less of a workflow to this step than the others; the main thing is to keep at it and stay receptive to the feedback you’re getting.
Like organisms, the best way to evolve your idea quickly is to expose it to death — talk about it with everyone you know. My idea was called Syllahub for about six months while I shielded it from attention. But only a month after saying that ugly word over and over again and trying to explain the thing to person after person, I was tired of it.
I sat down to try to dig into the essence of what the platform did, which was allowing collaboration through Github-style �forking’, something that hasn’t yet made it far outside of programming. In the midst of this deep dive, the name Coursefork hit me like a bolt of lightning.
The principle here is to follow traction. This should sound familiar because it’s also the best way to build a high-growth startup. Traction in this case means a strong reaction. The strength of the reaction is important, not its valence.
Start with yourself: What is your strongest reaction to your idea? To me it was the open source model of collaboration fixing education. Then focus on that, build your idea around it, and test it on others. Turns out it tested pretty well. From there, the recurring questions you get will help you hone your story (and eventual pitch), and may even give you new ideas about your idea.
Plug into the Community
I’d started early (over a year ago) getting to know our community and letting them get to know me. This meant that I had more people to talk with, and it paved the way for the social proof that has helped us get meetings.
The wonderful thing about our startup community is that you can get to know amazing people right away- just show up to an ExitEvent Startup Social, smile, and introduce yourself to people. It’s a learned skill for introverts like me, but the instinct to stick out your hand and smile instead of looking away awkwardly is essential to entrepreneurs. You’ll get experience controlling the tempo and tone of a conversation and shockingly awesome contacts. All because you stuck out your hand.
When you’re not in person you can still plug in. Know who the VCs and major startups are. Pay attention to the local news, who’s getting funded, who’s getting fired (it happens). Join groups on LinkedIn and connect with people there. Have a presence on AngelList. Identify key people you want to meet and find out who you know knows them (LinkedIn is perfect for this).
Keep a Deck
Keep a presentation titled “Current Pitch Deck” updated at all times. When you show the deck to someone, save a copy. This is your record of who saw what and your progress. It also lets the person you’re pitching know that you prepared this material specially for them; put their name on the title slide as an extra touch. Revise, and don’t be afraid to start over or cut out large parts of your deck every week, especially early on.
Decks are constraints on you. I didn’t have a finished pitch deck the first time I met with a VC. That didn’t go well, but I managed to get a second meeting, brought a deck, and have been able to build a great relationship with that investor. I’ve come to realize that making decks is an excellent way to force yourself to refine the story of what your business is. Like your idea, they should follow traction; revise them after every meeting.
If you’re doing it right, the process of updating your deck will teach you new things about your business. For instance, you’ll realize that to really make your point you need a key fact or estimate to allay specific concerns. In our case I realized that the collaboration aspect of what we were doing and a heavy focus on Github was counterproductive. Revising the deck helped me get past the idea of collaboration (because it wasn’t really getting traction) and into a bigger story: the future of open education and our company’s central role in it. That’s the exciting story we’re telling now, and it’s working.
The people we’re meeting with now I first met a median of 8 months ago. The initial “keep me updated” turned into “sure, let’s meet next week” because I kept pinging these contacts with succinct, well organized emails. Turn every milestone into an update to these key people. Whatever you do, follow up effectively and follow traction.
So how do you write an effective email? Most emails are WAAAAAY too long, so make yours super short. At the same time, you need to get the reader the key info that will make them interested in you. How to do this? Here’s my big secret: a blurb below the signature. Here’s an example email:
Dear person I really want to talk to,
Here’s a sentence describing who I am and how I came to be emailing you. Here’s a sentence about what I’m up to. Here’s a sentence about what I want from you.
A blurb about my venture is below if you’d like more information. I hope we can connect!
[blurb goes here]
There’s not much info here, but that’s what the blurb is for, and it comes BELOW the email. The blurb should be distilled answers to the most common questions you get about your idea. The sections in mine are phrased like a FAQ:
Each of these is followed by 1-2 sentences intended to spark interest. The questions are put in bold to help the eye find them.
The trick here is that the apparent length of an email is the distance from salutation to signature, in the case above, about five sentences. All the extra info in the blurb doesn’t count, because you’ve put it below and told them it’s extra. When I started writing emails like this my response rate went way up.
So now you’re getting meetings- ack! What next? Well, schedule them for 3 weeks out because Part 2 of this series, how to pitch and pick investors, drops in 2 weeks. See you then!