Last Friday I had the privilege of both speaking and mentoring at the inaugural BlogHer | bet conference, both as a Bing PR/marketing person and as social media/community application/games program manager. It's an unusual conference and so I'll lay out a bit of the format and then give some flavor of the event, which was held at the Microsoft campus in Silicon Valley.
The number of attendees was gated on the number of mentors - each person got a one hour slot to pitch their business, ask technical/marketing/funding advice, and the rest of the time was filled with panels to help you get the leg up technically or investor-wise. During the time I mentored my two people (one per hour) , there was a startup "speed-dating" sort of circle where folks got practice pitching and introducing themselves - something I've seen before at BlogHer conferences but especially important here, where practicing that pitch for your business was important. Because I have been to a ton of technical tracks at conferences, I decided to focus on the entrepreneurial/funding tracks for my own development and of course, I was in the metrics panel close to the end of day.
What I love about the BlogHer founders' mindset - Lisa Stone, Jory Des Jardins, and Elisa Camahort Paige - is that each project they do has as its subtext giving women a voice and empowering them to sit at the table. Bet was designed to answer the question "where are the women with big tech ideas" "where are the women who want to found tech companies" - and create a conference that gives those women a leg up.
Here's what I learned...
About mentoring... the mentees were nervous to meet us, but being a useful mentor was actually nervewracking in its own way. I was fortunate in that I had different experiences because my mentees asked questions not only abou social media marketing but forums hosting, SEO/SEM, Web site and book cover design, holding events and managing email membership lists, and in general the refinement of their pitch. I texted my boss Stefan at a break that while I mock PR/marketing as an engineer, (and Stefan's hair to boot) the stuff I've learned directly and osmosis by sitting for two years on a PR team served me in good stead. You need to be able to explain your business and why you care about it in a paragraph or less. I told my mentees "the guys I meet at tech conferences can all do this. You gotta do this too."
About pitching to VCs...
You need a strong team. VC, unless they are already friends, don't really go for one-woman shows the way they go for an exec team with a business plan and a rock star pedigree. There is no such thing as a wallflower CEO - the CEO has to be the one making the pitch (though it would help to have the CTO or other folks who are subject matter experts in the financials or the product there for demo).
Know your market/competitors - even if you are so new you think you don't have any. There are different ways to make your case, but there's no such thing as a pitch deck without a look at competitors. Think of it this way - the world is getting along fine right now sans your business (or they think they are) - you need to include your thinking around competition or potential competitors early, even if it's in the appendix.
People, Terms, Valuation: Lisa Stone, CEO of Blogher, relayed this great advice she got from Caterina Fake (Flickr, Hunch, Chairman of Board for etsy.com) when BlogHer itself was getting venture funding - prioritize yourself by People, Terms, and Valuation. If you assemble the right all-star team who is 100% behind your business idea, and get your business idea to a provable state faster, you will attract the right terms from VCs and a better valuation follows from it. If you are only interested in your valuation and the money you take from the company before the people, you are more likely to run into trouble and an outcome you don't want.
If you are lucky enough to get past the courting stage and are talking terms, you can never invest too much money in financial and legal advice. Have these professionals run models for you so that you know with each round of venture funding, how much you and your employees/prior investors' shares are diluted. VC investments - rule of thumb is they want a return of 10x their investment (if not more). So if you are asking for $1 million in funding, they want you to have a company valuation of at least $10 million - ie, they now own a stake ina $10 million business. I won't go into the lengthy legal terms covered in the term sheet panel but for folks close to this stage, it's likely worth the virtual access fees to see it. http://blogherbet.wmbly.com/buy/ .
Where the pitch meets the money and ownership percentages is risk. If you already have a profitable business, with customers, and your goal now is scale, that's a way different risk than the company with a new idea that has no customers yet and wants funding to acquire some. Every time you pass a major milestone for the company, the valuation goes up. You may get told to come back to ask for funding once you have done X (gotten customers, built a prototype, etc). Ironically bigger/well-known firms tend to be "softer" about terms than smaller ones - they know that if the founder makes a great business that's the only way they win - having controlling stakes in a tanking company serves no one.
The best VCS help your business with more than money - the best VCs help you shape your company into a better one and its not supposed to be adversarial. While founders/owners may be skittish about giving up control at all, the better relationships are more like partnerships.
Metrics and measurement panel:
This was fun. I sat next to Amy Chang of Google Analytics and Laura Fitton (@pistachio), CEO of www.oneforty.com - Laura took notes and tracked all the tools we mentioned and put them here . I mentioned The Goodness Engine ebook, which was a cross-industry project to help Donorschoose.org, but which had lessons that apply to startups and new businesses (because like non-profits, they start with no money and stil have to drive traffic,engage customers, get donations, decide if they need an API or other feeds coming from their site, etc). The main reason I mentioned it in this context though is that the ebook shows how much metrics homework Donorschoose.org did, before baring their problems to our team of 30+ industry experts. Some of the metrics Donorschoose.org offered could be found in Google Analytics or on the twitter tools Laura mentioned - but some of them were innate to their unique business premise and value proposition. You really need to focus around your customers and where your cash flow for your business is coming from - if it's online advertising, then tools that measure user behavior on Web sites and actions they take, will be key. But only you and your database will know how many actual sales you got or consulting appoints you made - it's not just going to be handed to you by an off-the-shelf tool.
Why do I love this kind of thing? Well, aside from the fact helping women in technology rocks, folks from Bing benefit in talking with startups and new business folks as much as they benefit from rapping with us. Yes, I reminded folks that Bing webmaster tools (http://www.bing.com/toolbox ) is where you can learn how to ensure your site is noticed by Bing, and that helps get the word out beyond the SEO conferences, but it wasn't about shilling Bing so much as absorbing the energy and feeling part of that upstart uppityness that has to accompany any new venture. Bing still has a way to go, but like any startup hopefull we've got to justify spending and deliver on promise. It always feels good to tap into the energy of the upstart tribe 🙂
Live it vivid!