Tuesday, July 30, 2013

How To Give A Horrendous Investor Pitch


By John Greathouse

The ability to consistently give horrendous investor pitches is within your grasp. If you follow the tips outlined in this entry, you will be guaranteed to suffer absolutely no
dilution, as there is zero chance a reasonable investor will give you money. Investors are overrated. Who needs them?

Open With An Offensive, Off-color Joke
The great thing about beginning your pitch in an awkward manner is that you can alienate the majority of your audience quickly, making the fact that you are unprepared (as outlined in next suggestion) much less relevant. In addition to being blatantly offensive, avoid establishing the proper context of your pitch at the outset. The less foreshadowing you provide your audience upfront, the more confused and disengaged they will become. The best way to botch the First Impression Rule is to speak in a nearly inaudible, flat, monotone voice accompanied by distracting and random facial expressions and hand gestures.

Wing It With Irrelevant Sonic Fillers
Would you study for a test, train for a marathon or memorize your lines for a play? Of course not. Such preparation would be a waste of time. You are an entrepreneur – go for it. If you need to fill any uncomfortable pauses, just utter brilliant sonic fillers, such as: “you know,” “like,” “ah,” “let me be clear,” “as I was saying,” or the classic standby “ummm.” “Um” is especially versatile, as you can sustain it for as long as you need to conjure your next rambling thought.

Obscure How You Will Make Money
Throughout your presentation, emphasize fluff over substance. Liberally utilize video, graphics and other eye candy that distracts from your pitch and is irrelevant to your overall venture’s value proposition. If you are forced to display financial data, ensure that the slides are unintelligible. To further obscure how you will earn a return on the investors’ money, verbally stumble through the description of your financial forecast and make it clear that you only have a cursory understanding of the assumptions underlying your business model. To further weaken your credibility, speak in the future tense as frequently as possible (e.g., we hope to eventually complete our development, once we begin shipping product, etc.). The extensive use of the future tense will make your venture seem less real and more intangible. The more generic and jargon-laden your remarks, the greater the likelihood you will be perceived as an insubstantial dolt.

Do Not Put Yourself in Your Audience’s Shoes
OK, you know that most professional investors listen to hundreds of pitches each year. So what? In order to deliver a particularly terrible fundraising presentation, disregard the fact that your audience is sophisticated and somewhat jaded. Make it clear you do not know their investment focus (e.g., early-stage, late-stage, market-sector focuses, etc.) nor did you take the time to research the investor's investment portfolios. One way to unequivocally convey your disregard of your audience’s frame-of-reference is to tell them things you are certain to already know. For instance, emphasize basic market issues that are familiar to even the most casual observer of your venture’s space. Another tactic that will effectively demonstrate your complete lack of self-awareness is to disrespect your audience’s time constraints. If one of your audience members tries to speed you along, consider this an overt challenge to your ability to give a decidedly poor presentation. Slow the cadence of your pitch to a crawl. Also, consider utilizing irrelevant tangents and frequent repetition to further lengthen the grueling duration of your remarks.

Death by PowerPoint
An effective method to incite Death By PowerPoint is to deploy an extraordinary number of slides. A minimum of 20 to 30 slides per minute is a reasonable rule of thumb. In addition to relying on an enormous slide deck, you can accentuate Death By PowerPoint in a number of ways:
  • Hide behind a podium
  • Avoid eye contact with your audience
  • Turn your back to the audience and read each slide verbatim from the screen
  • Limit the use of pictures or graphs on your slides
  • Utilize extremely small fonts so you can maximize the amount of text per slide
  • Select a complicated, distracting background that will compete with the slides' content
Apologize Profusely
Nothing more effectively conveys the sentiment, “I do not respect you” than an apologetic announcement at the outset that you are unprepared. You can also interject apologies throughout your talk, including: your unintelligible slides, your disheveled appearance, starting the presentation late, running over your allotted time, etc. Such apologetic remarks will substantially erode your credibility. You can also interject subtle, apologetic language into your pitch, such as: “sort of,” “pretty much,” “kind of,” etc. These qualifiers will denude the impact of your comments and reinforce your lack of self-confidence.

Evade Questions
Q&A can often make the difference between a mediocre and a compellingly bad presentation. This is an opportunity for you to shine. Irrespective of a question’s validity, approach each with an overt air of disdain. Never admit that you do not know something. If you are unsure of a factual response, make up a fictitious one. In addition to playing loose with the facts, be defensive and argumentative if a question is too pointed. If the questioner persists with a follow-up question, provide a rambling, semi-coherent response. If you speak long enough, you can be assured that you will squelch any additional questions. Except as noted below, avoid preparing for Q&A. Do not anticipate questions or think through your responses in advance. You are winging it, remember? This includes Q&A.

Do Not Follow Up
Once the presentation is over, forget about it. If a potential investor asks a question that requires additional research, blow it off. In addition, do not bother tracking down the investors to solicit their feedback after the pitch. If they really want to invest, they will seek you out. You are far too busy for such Tomfoolery.

Cocktail Hour Infamy
With a bit of effort, your investor pitches will cause your audience to walk away with no empathy for you, a vague, disinterested understanding of your venture’s value proposition and absolutely no desire to fork over their dough. If you are diligent, the prospective investors will remember your pitch for years and will liven up many a cocktail party with anecdotes from your talk. Differentiation is a good thing, so relish the notoriety that these tips will help you achieve and rest assured that you will never be saddled with troublesome investors.

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never tweet about koala bears or that killer burrito I just ate.

Friday, July 19, 2013

VC funding soars in Florida


By Nancy Dahlberg

Venture capital funding in Florida soared in the second quarter of 2013, thanks to large investments in two Miami-based companies.

According to findings of the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association released on Friday, investment in the state totaled $155.8 million, up from just $11.29 million in the first quarter and the highest amount recorded in the survey since the third quarter of 2007.

Florida’s total was powered by the $65 million Series D round in Open English — the 7th largest investment in the country — and the $20 million round in CareCloud, the top two investments in the state.

Nationally, venture capitalists invested $6.7 billion in 913 deals in the second quarter, according to the report, based on data provided by Thomson Reuters. Quarterly venture capital investment activity rose 12 percent in terms of dollars and 2 percent in the number of deals compared to the first quarter of 2013.

A few second-quarter national highlights from the survey:

•  The software industry received the most funding, despite dropping 7 percent from the prior quarter to $2.1 billion, marking the fifth consecutive quarter of more than $2 billion invested in the sector.

•  Biotechnology was the second largest sector for dollars invested with $1.3 billion going into 103 deals, rising 41 percent in dollars and 4 percent in deals from the prior quarter. Of the deals, 71 were in medical devices, an area of strength in South Florida.

•  Early-stage investments rose to their highest level in six quarters, up 63 percent in dollars and 18 percent in deals to $2.5 billion going into 480 deals. The average early-stage deal was $5.2 million, up significantly from $3.7 million in the prior quarter.

•  First-time venture capital increased 24 percent to $1.1 billion going into 302 companies, a 10 percent increase in the number of deals from the prior quarter. First-time financings, particularly software companies, accounted for 17 percent of all dollars and 33 percent of all deals in the second quarter.

“In many ways it feels like the late 1990s with information technology driving venture investment and significantly outpacing other sectors when it comes to level of activity and momentum,” said Mark Heesen, NVCA president. “The difference, however, is where we go from here. There will be no tech bubble. IT investing will continue to be the bedrock of the venture industry — but at sustainable levels. Life sciences investment is poised for a slow and steady recovery, provided we can continue to see progress on the regulatory front.”

According to the survey, 14 Florida companies received venture capital in the second quarter, up from six in the first quarter and the highest number in more than two years. In addition to Open English, an online language school marching across Latin America and beyond, and CareCloud, a fast-growing software and services provider for the healthcare industry, the other South Florida company funded was Contactus.com of Miami, which received $400,000. Other Florida companies that were funded were Kony Solutions, Tower Cloud, Applied Genetics Technologies, Informed Medical Decision, Treehouse Island, XOS Digital, Zentila, SiteWit, Health Integrated, Fracture and Unikey Technologies.

Monday, July 8, 2013

Arianna Huffington's Top 10 Lessons for Entrepreneurs

By Peter Diamandis
  1. Think differently from other entrepreneurs by accepting failure and learning from it. "There are a lot of failures along the way," Arianna said. "I always stress that. I have two daughters, one just graduated from college, the other a junior, whom I always talk to about my failures." Entrepreneurs need to address the possibility of failure, she said, "because so often, I think, the difference between success and failure is perseverance and not giving up after one or two or three failures. Just keep connecting to that place where failure doesn't matter," Arianna said. "If we become so dependent on things always being a success, then we're in a very vulnerable position -- because we're not in control of how the world is going to receive something," she said. "I'm reading Marcus Aurelius, who was a Roman emperor and a Stoic, about how to get to the place where bad things can happen and you are not affected by them. This is now my ambition because I think that from that place then you can act so much more effectively."

  2. Pick something you are passionate about that aligns with the zeitgeist. "For me, the most successful enterprises are always when the entrepreneur's passion matches something happening in the zeitgeist... There is a spirit of the times," Arianna said. "There are things that are happening, that have the wind on their backs and when we tap into them and when our passion converges with what is happening in the world then magic happens. It doesn't mean there's no hard work, but definitely entrepreneurs have the wind on their back. For me the Huffington Post was something like that. I mean, being Greek I was always about connections and conversations. The beginning of the Huffington Post was actually, then, just taking those conversations and moving them online. I could see that the important national conversations were moving online."

  3. Relax in order to get your best ideas. "I'm very interested in how people get their ideas." Arianna said. "A lot of my ideas come in moments of peace, relaxation, hiking and reading. Something completely unrelated. Not in moments of dealing with my email or cleaning out my inbox," she said. "There is a great book by Arthur Koestler called The Act of Creation that tracks where great scientists get their ideas, not just the ones that we all know about. Again and again you come across the fact that creative ideas come in moments of relaxation, not in moments of stress. That's why if you talk to the people who've achieved great breakthroughs, whether it's Bill Gates or Jeff Bezos, they all talk about how they manage their life. Bill Gates taking time to go in a cabin away from everything and read."

  4. Never tolerate a toxic person in your organization. "I heard Jeff Bezos say it best," said Arianna. "He said that he will not allow anybody in the company who comes to his attention who is toxic person, however talented, to stay in the company. I'm a big believer in that. Zero tolerance for toxic people. I would rather have somebody much less brilliant and who's a team player, who's straightforward, than somebody who is very brilliant and toxic."

  5. When hiring, trust your feelings. "When AOL acquired the Huffington Post and we had more resources, one of the hardest things I had to do was staff up rapidly. We're now almost at 700 employees," Arianna said. "I would spend weekends in hiring sessions that were like speed dating. Time is so precious, so I set up a system where I would have other people in the interview with me. I would participate for the first 10 minutes, and then leave them with editors to talk. In interviewing a candidate you know almost immediately if it's a 'no.' There's no need to spend more than that initial time."
    "You also know if it's a yes," she added, "that moment of falling in love. You know it's a yes 100 percent. The hard thing is in between. If there is any slight doubt about it, my answer is no. I don't proceed if I have any doubt because the hardest thing is hiring somebody who turns about not to be the right fit -- that mistake is very costly. We've all done it. It's problematic. So, 'If in doubt: Don't,' is a very good rule for me, whether in relationships or in hiring people."

  6. Handle criticism and public scrutiny by refusing to doubt yourself. "I wrote a book called On Becoming Fearless where I talk about the voice in our head, that voice of doubt which is ultimately your worst enemy," Arianna said. "You can deal with everything outside. The hardest thing is dealing with what I call the obnoxious roommate living in our head. That voice that doubts us and learning to deal with that with a sense of humor or the way we're educating a child is also eliminating a huge drain from our lives."
    When the Huffington Post first began, Arianna added, it received negative reviews from some quarters. "In fact, if you'll go back to the first day, some of the reviews were not kind. I've learned one of them by heart. It was: 'The Huffington Post is an unsurvivable failure. It is the movie equivalent of Gigli, Ishtar and Heaven's Gate all rolled into one.' A year later the woman who wrote that review emailed me and said, 'I was clearly wrong, and I would now like to write for the Huffington Post, to blog for it.' I said absolutely -- and that's the other thing. You never hold grudges. It's really again part of living in abundance."

  7. The truest drive comes from doing what you love. "I feel very blessed to be doing exactly what I love to do," Arianna said. "I feel very grateful. It doesn't mean that there aren't many things every day that happen that I wish didn't happen, challenges I'm dealing with, as we all are, but nevertheless the overwhelming sensation is one of gratitude."

  8. It's important to step back from work to recharge. "One problem is learning to unplug and recharge," Arianna said. As somebody who loves what I'm doing I think we run the risk of forgetting to recharge ourselves. I have a lot of rules around sleep. One of my rules is I never charge my devices near my bed. It's really important because you may wake up for whatever reason in the middle of the night and be tempted to look at your data. There is medical evidence that if you do, even if you go back to sleep it's not the same recharging sleep. You know what? What is it that can't wait? The other thing is a lot of people say oh, I need my iPhone by my bed because it's my alarm clock. Eliminate your excuses. We all know there's nothing better than waking up recharged and nothing worse than going through your day like a zombie."

  9. Find hope in the world by focusing on abundance. "I think the world is like watching a split screen. Depending on which side you are looking at you can be hopeful or despairing," Arianna said. "I focus on what gives me hope. It's key that we focus on abundance and surpluses rather than just our shortages. To that effect, I think, we in the media have not done a good job at spotlighting what is working. So, I think beginning to put a spotlight on what is working not just on what is not working is what gives me hope and we're doing a lot of that. On HuffPost we have a section dedicated to good news. We have a section called Impact, which is all about giving and what people are doing to transform the world."

  10. Build a tribe that will support you. It's important to have a group of trusted friends, colleagues and family -- who will support your efforts. "For me the tribe always started with my mother and my sister, which is very Greek," she says. "What's important, is the combination of whomever it is that helps us connect with ourselves, our mission and passion."