11 Questions for Your First Investor Meeting

When it’s time to start raising capital, just asking for money isn’t the whole pitch. Startups need to ask questions of potential investors and figure out if they are good for their company.

Most founders spend little time asking investors questions, and that’s too bad. Good investors love it when you ask them questions, because it shows that you are thoughtful and don’t think of them as just a walking wallet.

By asking the right questions, you can really qualify investors in your funnel get clear answers, and minimize the chance of wasting your time with investors who will not invest.

Are you interested in potentially investing in my company, and if so, what are the next steps?

No first meeting with an angel or VC should end without you asking this question. Be direct. Do not be shy.  Every investor by the end of the meeting will make up his or her mind.

By asking this simple and direct question, you will know exactly where you stand. If the investor indicates interest in continuing the conversation, then ask about the next steps. Listen carefully to what the investor is saying.

For example, the investor might say keep me posted, or I am traveling the next few weeks or I have a lot of things I am working on – this is known as a soft NO or definitely not now. When an investor is vague, assume he / she is not interested.

On the other hand, if the investor proposes to set up a follow-up meeting or a call in the next week or so, this means there is interest. Listen carefully to what the next steps are and decide if the interest is real.

What is your investment process, and how long does it take?

If the investor is interested in taking the next steps, you need to ask about the whole investment process. The process will vary widely depending on the type of investor.

Some angels like to co-invest with others, and that often prolongs the process. Typically, a formal angel group will assign a team of angels to an investment committee for each deal. You will need to meet with them at least a few times and then, if things go well, present to the entire angel group. After that, there maybe more diligence.

The process for Micro VC and VC firms varies but generally takes 3-4 meetings to get a positive decision. Every firm meets regularly to evaluate the deal flow. When you hear that you will be talked about during the partner meeting this week, in general, this a positive thing, but be ready for a quick NO coming out of that meeting. If the VC is engaged, you should be meeting with more and more partners in the firm as the process unfolds. For larger checks, you will be invited to present at a partner meeting. That would be a critical meeting for a YES decision.

What is your check size?

Knowing the check size helps influence the timeline and, frankly, the effort you put into this particular pitch. For example, if you are raising a $1MM round you can’t spend a ton of time with people who write $25K checks. You simply won’t be able to get to the finish line if you focus on those.

Oftentimes you will hear a range. An angel can say I invest $25K-$200K, or a VC invests anywhere from $300K to $5MM. Ranges, in general, aren’t great because they lack clarity. There may be complexity or another message behind them. For example, an angel who says $25K-$200K may only invest $25K personally and then syndicate out the rest.

Similarly, when a VC names a range, it might actually mean that they do seed exceptionally rarely. Find out their minimum investment before you spend your time.

How many more investments are you planning to make this year?

Number of investments per year is called pacing, and the disciplined investors pay a lot of attention to it because they want to be investing continuously through the year. For example, if a VC has a seed program, and you are talking to them in October, and they decided to fund 10 deals a year and they already funded all 10, there are no more checks left. With this information, the founder should reduce the chance of being funded by this firm to basically 0.

Another, much more subtle issue with VC would be capacity. Some partners just don’t have the bandwidth to take on any more investments. In that case, they would still meet with the founders, but they just can’t invest. Asking about an ability to invest upfront saves a lot of time.

Who else needs to be involved in making the decision to invest?

ABC in sales is to find a champion and to find who can cut the check. Similarly with fundraising, when you are dealing with angel groups and venture firms, it is important to understand who will be involved in making the decision. Some angels tell you that they co-invest with friends. This can be both a good thing or a bad thing. The good is that there may be more capital available if you succeed, the bad is that the decision is distributed. Be sure to meet everyone who is involved in making a decision, don’t let other people present the business on your behalf.

In most VC firms, associates will not be able to make a decision without involving a partner. Which partner is making a decision? Can you meet them? Again, making sure that you meet with the decision maker is critical on the path to getting a YES. Another way to think about this is that if you don’t meet the partner, it is basically an NO.

What is the last company backed, and why?

This is a simple but relevant question. You are testing for how quickly the answer comes, how enthusiastic the investor is and when was the investment made.

It can be quite telling one way or another. Has it been a really long time since last investment? If so, what does it mean? Is it that the investor has a high bar or is it that they don’t have capital left to invest this year? Ask about the number of planned investments question and you will have the answer.

You also want to hear the WHY. What made the investor write the check? Was it an amazing founder, vision, market, etc? Listen carefully to the answer, as it should be helpful to figure out what the investor will look for in your startup.

Have you invested in a competitor, or evaluating investing in one?

You should ask this question 100 percent of the time, because unfortunately, some investors will not tell you this unless you ask.

If an investor invested in a competitor, even if it is not a super close competitor, the chance of you getting a check from them is close to zero. VCs don’t invest in competitors, and angels avoid doing it too. It is essentially a conflict of interest.

Evaluating investing in a competitor is much more subtle. It is typical that when a venture firm is planning to make an investment in the space, they do a lot of digging and research. Part of the research is that they would reach out to all competitors and try to get more information. A VC is trying to do its best to pick the best company in the space.

You may get a call from an associate of a firm saying that the firm is interested in the space and wants to talk. You will be asked a lot of questions, and at times, even move through the process only to find out in the end that it was a so-called “brain suck”.

This may seem very unfair to the founders, but it is the reality of what’s happening in the market. To avoid wasting time and getting hurt, ask about competitive investments or research upfront.

What are your concerns about our business?

This is a great question that Steve Schlafman from RRE ventures suggested founders ask. Why wouldn’t you invest in my company? How do you see the risk here? What do you think won’t work or that I am doing wrong?

By asking this question directly, you are accomplishing several things. First, you are signaling that you are open to feedback and value it. Secondly, that you respect the opinion of this investor. More importantly, you are likely getting valuable information, a perspective of an investor who sees dozens and hundreds of companies per month.

The concerns will range from market size to acquisition channels, to competition and pricing. Having this information can help you work through the concerns and address them during the investment process.

What is your follow-on strategy?

Some investors follow on. i.e. put more money into the companies, and some don’t. Both strategies are perfectly fine, but it pays off to know.

Specifically, if you are raising money from angels, say $1MM round, and most of your backers do not follow on, this means that you may have a hard time raising the second seed. Most companies need more capital before they get to series A, and most of this capital comes from insiders – investors who already invested. If most of your insiders don’t follow on, you will need to go outside to raise more capital. This can be tricky, especially when you post seed and before series A.

With VC firms, the dynamic is different. Some VC firms deploy a smaller amount of capital at the seed stage with the idea of leading series A. The follow-on strategy is to lead series A. However, there is a potential issue that founders need to be aware of – IF the firm decides to not lead series A, there may be a signaling issue to the rest of the market. It pays off to connect with other founders that the firm backed to get the color on this dynamic.

How do you help companies you back?

Many investors talk about being a “value add” in addition to funds. Ask how exactly does this particular investor help and ask for specific examples involving companies the investor backed. Some investors come with a massive network. Some larger VC firms will help you recruit and scale. Some smaller angels are great at pricing and financial modeling. Some investors really understand distribution.

Whatever it is, investors like being asked this question and it is helpful for the founders to know.

Who are some of the founders you backed that I can talk to?

Much like how investors reference check founders, the founders should reference check investors. Ask for 2-3 founders that this investor has worked with.

You don’t necessarily need to connect with them after your firm’s meeting with the investor, but it is a good question to ask and see what the answer is. Great investors will have raving references from the founders they supported and less than great investors will be reluctant to name names.

   Source : http://bit.ly/2enuDAS

10 Clever Marketing Tricks Using CRM, Link Building and More

Want to master online marketing? There’s so much that goes into creating an effective strategy. But members of our small business community have plenty of marketing knowledge to share. Read on for some of their top tips for taking your online marketing to the next level.

Solve These CRM Problems

Customer Relationship Management is a key part of communicating with customers online. But every CRM system presents its own challenges too. In this SBA post, Anita Campbell explains some of the biggest problems businesses might run into when implementing a CRM system and how to solve them.

Change Your Social Media Mindset

There are some common myths about social media that could be hurting your online marketing efforts. In this post on Strella Social Media, Rachel Strella details what some of these myths are and how to avoid them to make your social media strategies more effective. BizSugar members also share thoughts on the post on the community.

Use These Link Building Techniques to Push Traffic and Revenue

Link building isn’t just a cheap way to bring in customers via search anymore. It involves actually building relationships with other bloggers, businesses and site holders and then nurturing those relationships with visitors once they get to your site. Moosa Hemani of SETalks shares some link building tips here.

Generate Sales Through Social Media

Making sales doesn’t mean you have to have individual salespeople push your offerings onto different consumers. You can actually use social media to generate sales. Neil Patel outlines some tips for doing so in this post.

Pay Attention to Bounce Rate

Your website’s bounce rate is a stat that measures how quickly people leave your website after clicking on one  of your pages. To improve your website and this rate, you need to first understand what it is and why it’s important, as Mike Allton of the Social Media Hat details here. You can see further discussion about the post over on BizSugar.

Boost Your Ecommerce Sales With Email Marketing

Email marketing can let you communicate and form relationships with lots of different customers. Even if you have an eCommerce business, you can use email marketing to boost sales. This post by Vanhishikha Bhargava of Exit Bee includes tips for doing just that.

Create Interactive Content Your Audience Will Love

If you look at content marketing as just a way for you to share a specific message, you might not be getting as much out of it as you could. Instead, creating content that lets your audience interact with you can be more helpful for both your business and your audience, as James Pointon explains in this Right Mix Marketing post.

Master the Time Zones for International Marketing

Marketing a business online means having the potential to reach consumers all over the world. But if you want to actually reach those consumers when they are likely to act on your messages, you need to master the time zones. Bettina Specht provides some tips in this Litmus post. And the BizSugar community shares input too.

Learn From Abandoned Shopping Carts

Running an eCommerce business means providing a very specific type of customer service. You have to create a positive experience for customers on your site. So when they do things like abandoning their carts before completing a purchase, there’s usually something to be learned from that. This post by Leslie Simpson on Carts Guru includes some lessons you can learn from abandoned shopping carts.

Send the Most Relevant Emails to Recipients

Perspective customers on your email list don’t want to receive canned emails that look like they could have been sent to anyone. If you want to provide the best online experience for all of your customers, you need to know how to send only the most relevant emails to each of your customers. Scott Heimes explains more in this Marketing Land post.

 Source : http://bit.ly/2aK2HRt

Avoid These 4 Startup Marketing Mistakes

There are many things on your plate while growing your company. You have a team to manage, a product to develop and deals to close. You may or may not have already hired a marketing manager, but you know marketing is crucial for your company’s growth. You also want to make sure you don’t throw away valuable marketing money.

Making mistakes is normal and as Joseph Conrad said, “it’s only those who do nothing that make no mistakes.” Working with entrepreneurs and startups, I’ve learned you can’t avoid all mistakes. But you can avoid some.

Here are the top 4 growth-stage startup marketing mistakes and how to avoid them.

1. You don’t have a fixed marketing budget.

Just like your general budget planning, you should work with a detailed marketing plan. Creating such a plan makes it easier to understand where your marketing money is going and when. For example, if you’re looking to launch your blog mid-year, your marketing plan should take into consideration the time and budget needed to build the blog and create the initial content.

Growing your company and showing growth in your forecasts is nice and all but it has to be backed with a growing marketing budget. SEO work is another example for a marketing initiative that spans through a period of time and needs allocation of funds throughout the budget timeframe (there’s no such a thing as an “SEO campaign”). Setting a fixed marketing budget can be okay for the first couple of months, but if you want to grow, you need to take into consideration a growing budget.

2. You don’t keep track of the competition.

Some startups mistakenly operate thinking that they don’t have competitors. Even if you don’t have direct ones, it’s crucial to look at the nearest ones. Being an entrepreneur, it’s impossible to operate in a bubble (on a side note – telling potential investors you don’t have competitors is probably in their top three things they hate to hear).

Knowing who your competitors are and following their work can help your business and marketing strategies as well. By signing up to your competitors’ newsletters, and using alert tools such as Mention or IFTTT, you can stay on top of what’s going on in your field.

3. Your tracking tools are not in place.

Having tracking tools, such as Google Analytics in place is crucial, as otherwise you’ll be operating like a blind person. Google Analytics is the most popular tracking tool, 100 percent free, well-known, and reliable. If you don’t like using Google for tracking, there are other tools such as Piwik or Clicky that are just as good (and free) as well, or for both a web and mobile presence, Mixpanel.

If you haven’t done so already, set your tracking and make sure that you know how to create goals, funnels and read reports. Having the majority of your traffic marked as “unknown” in Analytics is terrible as you’re spending money on marketing but cannot calculate the ROI. If you are unsure of how to set analytics and connect them correctly yourself, hire a freelancer to do this small project for you.

4. You’re not where your audience is.

If your product is an innovative baby sensor that is sold directly to customers on your site, a LinkedIn campaign may not be the best use of your marketing money. Plan your marketing according to where your audience is. If you are a B2B cyber startup and your target audience are CIOs and CISOs of large enterprises, meet them in industry events, publish in blogs and newspapers they read, and re-target them on LinkedIn. If your product on the other hand targets millennials, you have to be very active on social media and mostly these days, Snapchat.

Source: http://bit.ly/25P5xxN

5 marketing quotes of the week

Social Media Strategy: where to begin?

Social media are a necessary part of any marketing strategy, but they should also be a part of your SEO strategy. As social media become more popular, Google and other search engines can’t ignore them any longer. Tweets and Facebook posts don’t get the highest rankings in Google, but Facebook pages and profiles for sure do. But how do you know which social media to use? In this post, I’ll walk you through the first steps of determining a social media strategy: finding the social media that suits both your business and your audience best.

Which social media suit your business?

The first step in determining a social media strategy is whether that social medium is one that you’d want to be found on. In other words, does the social medium suit the message and branding of your company? And on top of that: does this social medium offer the options and reach you’re looking for?

Social media like Facebook and Twitter offer a lot of ways to advertise and make your brand and company known beyond the scope of your followers. With other social media, this can be more difficult and would require a lot of hard work to get the same results. Make sure to think about what presence on the considered social media would mean for your company. Make sure that this aligns with how you want your business to be branded.

Which social media does your (desired) audience use?

Different kinds of people use different kinds of social media. So you have to know what social media your audience uses. And for you to know that, you’ll have to get to know your audience. This requires some effort and research, but it will definitely be worth it. For instance, if your company mainly works in the business-to-business area, you should definitely be active on LinkedIn. And if you have a young audience, your business is best off using social media such as Snapchat, Vine, Tumblr and Instagram:

Social media you can’t ignore

At the moment, there’s basically only one social medium you really can’t ignore and that’s Facebook. Why? Let me show you:

Facebook currently has nearly 1.5 billion active users every month. That’s over 20% of the entire world population being on Facebook at least once a month. So you can see why this is one bandwagon you’ll want to get on.

A blog or website should thus definitely have its own Facebook page. And your posts should all be shared on Facebook. That way, all the people who follow your page see new posts in their timeline. WordPress can do this automatically for you when you publish an article. Some people will like, share or comment on the Facebook posts, be giving them, even more, exposure.

Think about your social media strategy!

The main thing you should take away from this post is that you should determine your social media strategy, before your start. It’s easy to waste time, effort and money on the wrong media and/or the wrong goals. So bear in mind these 3 key questions:

• Who do I want to reach with social media?
• Which social media suits my business?
• On which social media do I find my target group?

 Source: http://bit.ly/1pR9SNO

4 Ways Startups Leverage Social Media to Generate Buzz

Building a company from scratch takes guts and perseverance. Understanding the difference between generating buzz / excitement versus just making noise is key to your company’s short-term growth. Anyone can post on social media, but is the information you’re posting exciting your target demographic? Are you gaining a foothold in your market, or are you simply gaining followers that are unlikely to convert through your sales channel?

Let’s look at 4 ways you can jumpstart your social media efforts from day one to create valuable buzz/excitement in your target demo.

1. Show an Initial Burst in Followers and Subscribers

To get people to “like”, “subscribe” and “share” your brand, you need to be popular, or at least appear to be popular. This is just like high school. Everyone gravitated towards the popular kids and did what they did. If your company has five likes on Facebook and only 20 Twitter followers, the likelihood that someone else will take your brand seriously is pretty low.

Initially, to generate brand trust, you’ll want to investigate purchasing followers and likes. If you’re considering how to launch your Twitter with maximum impact, check out this article that gives insights on how to use Twitter to propel your company forward.

To get people to feel confident about clicking “like” or “subscribe”, build an image of online confidence with purchased subscribers and followers. This gets you past the initial lurch of trying to generate a popular brand without any followers.

2. Look at Past Post Performance to Decide Future Posting

Now that you have your first thousand followers and likes, it’s time to get serious about what you’re posting on your social media channels. Look at what the competition is posting. Review your past posts. What’s getting the most likes and comments? If you’ve found a topic or product that your followers are passionate about, keep up the great work and post more information that they’ll engage with.

3. Social Media Contests and Prizes

If you really want to generate real buzz and excitement, start a social media contest. If your company sells a really hot product, offer to give one lucky social media user a free product or service via a Facebook or Twitter raffle. One “like” and “share” equals one entry into your contest. At the end of the contest period, draw a name using a random number generator and award the prize (posting about it of course!).

There are different variations on this method, but giving away free products on social media in return for like and shares is a great way to motivate your target audience to get the word out about your brand on social media.

4. “Leak” Product and Service Information

Official press releases are a great way to tell the world about your brand or service. However, if you want to leverage your social media muscle, let secret or behind-the-scenes information out via posts on social media. This way, you’ll reward your most passionate followers with information before the general public. Everyone likes being in on a good secret!

Source : http://bit.ly/241r2Iq

3 Tips for Using Pinterest to Drive Sales

Pinterest has become a powerful marketing platform. While social has long considered an awareness raising activity, marketers are more committed this year to making a clearer connection from those endeavors to increased sales. This is one area in which Pinterest shines, driving both traffic and commerce online.

The biggest challenge for businesses on Pinterest is making sure their Pins are seen, and seen by the right audience. The solution to this challenge, says Lux, is understanding the Pinterest audience and whether or not your product is a good fit.

With 100 million active users, Pinterest is not nearly as big as some of the other big networks. However, the biggest demographic on Pinterest are women aged 25 to 34; most likely Millennial moms interested in fashion, DIY, cooking, home decor and shopping. Pinterest users also differ from those on other networks in one very specific way: They prefer to follow brands than notable celebrities and influencers.

Lux had these recommendations for how to drive traffic, and ultimately sales, from your Pinterest marketing efforts:

• Choose your target wisely. Pinterest has robust analytics that can be used even before you spend any money on promoted Pins, said Lux. Experiment with Pins, then use Pinterest analytics to find out what’s working, then choose keywords based on what your audience is most interested in.
  

• Use optimized, high-quality images. In this age of visual media, image quality is extremely important. In addition to professional quality photos and graphics, Lux said there are tools like Canva that make editing easy. Include descriptive text and keywords to improve the likelihood of your Pins bubbling to the top of the search.
  

• Use Rich Pins. Lux noted that most have seen Rich Pins, where a complete recipe or article appears within the Pin. Product Pins, which are a type of Rich Pin, includes important product details like the name, price and availability lead to higher conversion.

For small-business owners on the fence, Lux noted that converting a personal account to a business account is very simple:

With just a little bit of code on your website, it can’t hurt to try and use the analytics at least, even if you’re not going to pay for Promoted Pins.

Readers: Are you using Pinterest for your business?

Source : http://bit.ly/1Kub3ff

Snapchat: The King of Millennial Micro-Moments

In 2015, Snapchat put the world on notice that the app is an advertising force to be reckoned with — maybe theadvertising force to be reckoned with. Named Adweek‘s hottest digital brand, Snapchat commanded a reported $750,000 for brands to place ads, and the millennial darling reported more than 6 billion videos daily. Snapchat will become even bigger in 2016 as brands learn how to apply the app to create micro-moments for the surging millennial population.

Snapchat has accomplished something nearly impossible: opening its door to brands while retaining its essential coolness among a loyal user base composed largely of millennials. In fact, big brands climbing onto the Snapchat bandwagon may have helped the app transcend a reputation as the go-to platform for sharing racy photos. Here are some of my favorite examples of brands that relied on Snapchat to increase their own coolness quotient:

• McDonald’s became the first brand to sign up for a sponsored geofilter, or a special content overlay (akin to a digital sticker placed on Snapchat photos and videos) that can be accessed only at certain locations. Customers across the brand’s 14,000 U.S. restaurants could decorate their Snapchat images with playful illustrations of fries and double cheeseburgers, creating tremendous engagement for a brand that needs it.

• Dunkin’ Donuts took the geofilter ad concept a step further to generate demand by offering free cups of coffee on National Coffee Day (September 29). Snapchat users who clicked on a geofilter of raining coffee beans could get a free medium cup of coffee, but they had to unlock the image either at or near a Dunkin’ Donuts store to get their coffee. Dunkin’ Donuts also used Snapchat to run video ads on the ESPN Discovery Story on Snapchat as part of its sponsorship of ESPN’s Monday Night Countdown.

• In November, Sony Pictures Entertainment made innovative use of Snapchat Discover channels, which consist of dedicated content for publishers such as CNN and Mashable. Sony launched a temporary channel devoted exclusively to the movie Spectre as part of a worldwide marketing blitz to promote the 24th official James Bond movie. The channel consisted of behind-the-scenes content (such as photos from different shoot sites) shared across 17 countries. The exclusive nature of the information shared made Spectre exist comfortably alongside all the publishing-oriented channels.

These three brands are all using Snapchat to capitalize on “micro-moments,” which Google defines as real-time moments of consumer discovery that occur on mobile devices. Micro-moments are little touch points that can add up to big moments for brands who are present with compelling content when consumers are on their mobile phones to find places to go and things to do.

Google characterizes micro-moments as “the new battleground for brands.” In a seminal report,Micro-Moments: Your Guide to Winning the Shift to Mobile, Google notes that we check our phones 150 times a day. Brands have an opportunity to create contextually relevant content that will engage consumers when we’re checking our phones to perform tasks. Writes Google:

Thanks go mobile, micro-moments can happen anytime, anywhere. In those moments, consumers expect brands to address their need with real-time relevance.

What Dunkin’ Donuts, McDonald’s, and Sony realize is that millennials are creating more and more of those micro-moments. In 2015, millennials surpassed baby boomers as the largest share of the U.S. voting population. As Google notes, 87 percent of millennials always have their smartphones at their side.

In recent weeks, Snapchat has made it easier for brands to create micro-moments through micro targeting. Snapchat has been offering “audience bundles,” or users grouped by different themes such as “world news and culture-themed package.” The themes correspond to readers of different media such as Mashable and CNN that have Snapchat sections. According to Adweek, Snapchat can already target content by gender and for users over the ages of 18 and 21.

Given the size and influence of the millennial population, Snapchat becomes an increasingly important option for brands. Businesses that want to capitalize on Snapchat would do well to:

• Be contextually relevant. Content that strikes the wrong tone and fails to engage in a playful way will fail. Many other brands besides the ones I’ve cited have learned how to create contextual content on Snapchat, including Taco Bell, which does an excellent job gamifying Snapchat on special occasions such as Valentine’s Day.

• Create “next moments,” or actions that occur after a brand and a consumer find each other. Dunkin’ Donuts created a next moment by encouraging Snapchat users to walk into its stores and receive a free cup of coffee.

As Snapchat builds out its targeting capabilities to justify its advertising rates, I believe next moments represent a huge opportunity for brands on Snapchat in 2016. Enterprise brands with multiple locations can and should tap into the Snapchat geo-filtering feature to create customers at the local level. So long as businesses stay focused on creating the right kind of contextual content, brands will win and so will Snapchat.

Jay Hawkinson is a digital marketing professional with 20 years of sales, marketing and merchandising experience including organic search optimization, paid search advertising, local search, mobile and social media. Jay joined SIM Partners in 2006 as an equity partner and currently oversees mobile, social media and emerging technology at SIM Partners as the senior vice president of social and emerging products. 

Source : http://bit.ly/1Pah3q6