Tag: technology

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Fundraising in a new environment, then and now

This week, I gave a presentation to a group of early-stage founders going through First Round’s Dorm Room Fund Female Founder Track. The goal of the session was to provide tactical guidance around what to expect when fundraising, particular as first time founders.

This post is about raising your early round of funding based on my experience as an investor at On Deck, Bloomberg Beta, Ridge Ventures. There are many helpful fundraising guides already out there, so this post is focused on insights and observations based on recent market shifts.

Fundraising is one of the few one-way doors in a company’s life, so it’s important to prepare well, be ready to eliminate the easy “no” reasons, and commit to making this a core focus for 1-3 months (sometimes longer) when you are ready. I’ve laid out the three critical phases of fundraising, the key questions to address in each, and some pointers on how fundraising in a bear market is different from the bull market of the last few years.

I. Prepare, prepare, prepare

• Why are you The One? An investor needs to believe that your company can return the fund. Many founders need to practice their pitch a hundred+ times. Find a small group of friends, existing investors, advisors to practice and get feedback. You should practically get bored of your pitch but be ready to talk about the company each time as if it’s the first time telling it.

• What are you raising on — progress, story, team — and what are investors anticipating will happen with this raise? Put differently, what risks have already been de-risked and what risks will you de-risk in the near-term? The very best founders can fundraise in 2 weeks, but this is outlier and often attributable to a track record of success, credibility, network.

• How much do you need to raise and at what price? Cash efficiency is critical today. Your fundraise should afford you at minimum 24 months of runway. You can have a target price in mind, but the market will set the price.

• Who are the natural investors for you? Invest real time to curate your investor CRM — tier your leads, intro paths, backchannels. Qualify EVERYONE. Knowing who you’re targeting, preparing the custom forward intro emails with why you believe they’re a good fit, and ensuring you have as many warm intros are surprisingly important parts of the process. Target 40-50 names on your list and in today’s markets, you may need to talk to 80-100 investors.

What’s changed from then vs now?
• Commitments aren’t dollars in the bank. They won’t create as much fomo and may even have the opposite effect with VCs who are investing with more caution right now.
•  Prices are lower (and likely will be for the next 6-12 months) and ownership expectations are stricter/higher. Be wary of stacking SAFEs at multiple caps for this reason. Treat your round like a priced round and close everyone on the same deal. Anticipate 20% dilution at the seed (up to ~30% for hard tech).

II. Run a tight process

• Who will be your strongest intro paths? Ideally you work with an angel or founder advisor who can champion you. Of course, successful portfolio founders are the strongest intro paths to an investor.

• What are the easy pass reasons? Pre-empt these. You can learn about common hesitations by practicing your pitches with smaller check investors and your “nice to have” investors to get feedback.

• Why is this investor a good fit? While tools like NFX Signal, Crunchbase/Pitchbook, Twitter can help, curating a high quality lead list will take time. Prioritize conversations accordingly, and maintain ball control of your information by keeping investors in each part of the process in similar time frames.

What’s changed from then vs now?
• While tier 1 funds may be moving slower, there are angels and micro-funds that are still investing smaller checks. Have clear next steps at the end of each conversation and follow up appropriately, but responsiveness is your best leading indicator with investors. If it’s not a hell yes, it’s probably a no.
• The bar is higher for diligence. Anticipate deeper founder references for pre-product and more questions around customers and pipeline if you’re post-product.

III. Win and close

• How do I command a higher price? Congratulations on an offer! Momentum is your best leverage. Multiple term sheets from comparable investors are your best bet to increase the price. That said, if your offer is with an investor you trust and respect at reasonable terms, don’t over-optimize. Take the money.

• What allocations make sense for the round relative to what each investor wants? Go back to your smaller check commitments and confirm their desired check size so you can revert with as best as you can accommodate.

• Which angels or small checks do you definitely want on the cap table and why? Founder or operator angels are often the most helpful small checks for their tactical, hands-on support.

What’s changed from then vs now?
• Don’t assume a verbal yes is a done deal until the investment is signed and wired. Ordinarily, an investor would almost never risk the reputation damage of changing terms last minute or reneging on a handshake, but these are uncertain times. Again, if you receive an offer with an investor you trust and respect at reasonable terms, take the money.

The truth is that fundraising for almost everyone is a slog, so prepare well, gather your support network, and don’t cut corners.

Thanks to the Dorm Room Fund team and founders for having me. If you’re an early-stage founder working on frontier tech to transform traditional industries, reach out.

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Introducing: In What World, a podcast

Conversations on how tech is changing society

Originally posted to our Medium Publication ‘In What World‘

A few weeks ago, my co-host Patrick and I launched the pilot episode of our podcast, In What World. In it, Patrick and I talk about some of today’s shifting technologies and how they are redefining our understanding of social, economic relations. And as we release more episodes, we wanted to share some words on how and why In What World came to be.

…..

Patrick and I are part of a unique generation that’s experienced one hell of a technological revolution. We remember what it was like to watch movies on VHS, learn to type on some of the first web pages on The World Wide Web, and stay in touch with our friends via AIM. Two decades later, we’re living in an even more sophisticated society that boasts online social networks connecting millions (sometimes billions) of users, mobile devices rivaling the computing power of desktops, and an increasingly online world.

These advancements have made the seemingly impossible possible and ushered in a new era of amazing products, services, and companies. With the transition into a consumerism driven culture, we in the developed world experience nearly instantaneous communication, access to troves of data, and convenience like never before. And admittedly, we’ve largely benefited from a host of these novelties.

Patrick and I met via an app — the kind of tech whose existence is evidence of the shifting ways in which people interact. We met to make new friends in a new city but remained connected for our shared love for conversation. We spent a lot of time talking about how ordinary lives are being shaped by extraordinary changes and asked each other challenging questions on what that might mean for our future. These concerns don’t have black and white implications, and we’re not exactly sure how the future will shape out. However, we are sure of this:

technology is changing how we interact with the world, and we need to talk about
how it’s doing so.

The tech industry holds fast to its belief in “build now, mend later.” And while the lean, iterative process of creation enables enormous creativity and risk-taking, it leaves little room for reflection. So after months of dialogue, we decided to create this podcast to share our thoughts with you.

In What World is our place to discuss how recent innovations are impacting lives. We believe that thoughtful conversations can help us become better informed individuals, and we hope you’ll enjoy what we make. Along the way, we’ll continue to share our process of creating this podcast and what we are learning from it as well.

And we want you to be a part of our conversations. So Tweet at us, write to us, and let us know what’s on your mind in the world of tech in society. We’ll continue to need your honest feedback on what’s good, what’s bad, and what’s missing to deliver a meaningful audial experience.

Thanks for reading and stay tuned.

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Dear Marissa Mayer and Zachary Bogue

Congratulations to you both on your pregnancy announcement! After the birth of a son, the expectation of not only one girl but two must be exciting its own unique way. For Ms. Mayer, I’m sure the internet is already being inundated with opposing opinions on your intentions to work throughout your pregnancy and return to Yahoo shortly after your children’s births. However my opinions here, for one, do not come from the viewpoint of a working mother, or even from someone who anticipates parenthood any time soon. No, I am writing through the eyes of a Millennial who pays attention to leaders in the workforce, particularly in traditionally male-dominated fields, in hopes that every day we strive closer toward equal opportunities for both men and women.

With the explosion of feminist campaigns in recent years by everyone from Sheryl Sandberg, Chimamanda Nogozi Adichie, Emma Watson to Max Schireson and Aziz Ansari, young, working women like myself have experienced firsthand the changes in attitudes and policies towards women in the workplace. I recall reading Anne-Marie Slaughter’s article while in university and finding myself angry that I agreed with her assertion that ‘women today cannot have it all.‘ For the record, I too, am writing from the perspective and for my own demographic: those of us with higher education, of decent socioeconomic status, and the privilege of having choices about the type and pace of work we do.

So in reading Slaughter’s words and by conceding to the seemingly inescapable fact that women must treat professional and personal/family as mutually exclusive responsibilities, I felt that I was betraying all the hard-ingrained, first-generation credos that propound the merits of hard, honest, gender-agnostic work. It was a terrible injustice: what did the author mean I couldn’t have it all? Up to that point, academia with its rankings, grades, and standardized test scores had provided easy milestones and benchmarks for me to measure myself against my peers both male and female. My immigrant parents had raised me to believe that hard work and commitment trumped all so much so that my being female (and Asian-American) never played any roles in our conversations on success growing up. Therefore, I admittedly took a certain kind of proud pleasure being of two minorities in many of my university classes. Particularly in courses in the hard sciences or upper level economic theory, I misattributed the dearth of female peers to an inability to ‘keep up’ or a lack of ambition.

But in my internship, job search, and work experience, I’ve learned a difficult truth: too many of us are taught a series of half-truths regarding gender equality that convince us young, aspiring women that we can have it all all the while leaving us woefully unprepared for the number of real, systemic issues we’ll face in the professional world.

We are told that unyielding commitment is sufficient, yet more women than men are criticized for an unwillingness to make the ‘right’ sacrifices when we voice concerns about long work-days, all-nighters, and frequent travel. We are told that prioritizing is enough, yet choosing family over career as a priority comes at a much greater cost for women than men. We are told that the workforce will recognize both mothers’ and fathers’ choice to take leave after the birth of a child, yet policy fails to recognize what a Hobson’s choice this presents for most mothers, who biologically respond differently to infants.

These are a few reasons why so few of us reach leadership positions despite the pipeline being rife with talented, capable women. Such societal pressures allow the talent gap and the ambition gap to persist. And while solutions need to and do come from a range of industries, policymakers, and educational institutions, I believe we can also affect change with honest discourse that highlights and celebrates the spectrum of both women and men who are taking it upon themselves to promote feminism (read: equalism).

I have been a long-time admirer of your career path and identify with your dogged work ethic, Ms. Mayer. Your personal commitment to Yahoo is admirable, and despite the backlash against your decision, I commend you for not conforming to a double standard expectation that mothers must take extended maternity leaves while fathers do not. Feminism, at its core, is about equal opportunity for equal choice. And while it is entirely your prerogative not to speak on the topic, I wish you would. I wish you would acknowledge and expound your opinions on the difficulties women face in the workplace. Moreover, I’d also like to hear from your husband Zachary Bogue. We need more men to speak up so we can hear their sides of the story – these issues impact their day-to-days too. Socialized norms and expectations trap men in their own ways, and denying the existence of systemic sexism allows assumptions that men and women must be upheld to different expectations regarding personal responsibilities to continue.

Millennials now make up the majority of our workforce, and despite all the criticism that we’re narcissistic, entitled, and scatterbrained, we’re also some of the most entrepreneurial, creative, and adaptable individuals. So while we’re trailblazing and going on to become the next generation leaders, we still look to today’s leaders to help shape our worldviews. You and your husband are both in positions of immense influence in high impact industries, and young professionals like myself want to hear from such individuals. You may disagree with Sheryl Sandberg’s Lean In philosophy or agree with Indra Nooyi’s stance that women having it all is an illusion or have an entirely different perspective unique to you. In any case, we will not know until you contribute to the conversation. And I, for one, want the conversation to be multi-dimensional; to be filled with opposing opinions and demonstrate that it’s not about men vs. women, professional vs. personal, but about finding the balance that is right for each of us.

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Ethics of Manufacturing Habit-Forming Products

Habits are activities that cause us a little bit of pain when we don’t do them. For example, how many of us check our social media feeds numerous times a day? The very thought of not having access to our phones incites a twinge of discomfort knowing we can’t check our Twitters, Instagrams, Facebook feeds, etc.

Businesses understand that great products inspire habits; in their ability to fulfill a specific need in simple ways, they produce the desire to return and re-engage in a recurring action. Author Nir Eyal builds upon the works of behavioral psychologists like B. F. Skinner and Daniel Kahneman in his book Hooked to suggest four steps in manufacturing habit-forming products:

  1. Trigger – hook the user
  2. Action – engage user with simple calls to action
  3. Variable Reward – encourage recurring use with different levels/types of rewards
  4. Investment – provide room for users to invest their time into your product

Lately, I’ve been giving a lot of thought to the fine line between habit and addiction with respect to technology. From the omnipotent tyranny of email to our dependence on social media, there is a question here that the broader technology has failed to address in our dogged quest to build products. At times, the addiction to refreshing my newsfeeds only induces more anxiety, more so than making me feel informed and purposeful. Our habitual usages are measured by the explosion of software as a service applications in last decade. And while they serve as additional proof that technology creates ease and delivers powerful insights, we have yet to discuss the implications of such products. With every new automated feature, obsessive mobile game, and delivery service app, we spend more and more time becoming intimate with our technologies. In which case, what kind of new habits are these products prompting and what, if any, are their societal values?

Although this aspiration will not apply to all technologies, as we continue to iterate and rapidly improve in the coming years, I hope we will give greater consideration to not only creating tools that produce convenience but also in building to promote better habits.

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Boarding the Podcast Wagon: 5 Standouts

Media users today face no dearth of avenues for consumption, yet podcasts have recently gained newfound momentum in edging out their visual and analog counterparts in popularity*. What used to be considered an arcane relic of weary radio, podcasts saw their resurgence with the likes of This American Life’s ‘Serial‘, Gimlet Media’s ‘StartUp,’ and WNYC’s ‘Freakonomics.’ Although I got hooked on Serial last fall, my podcast usage waned after the finale because I didn’t have an app that felt functional and provided a great user experience. Recently, a friend’s recommendation for a new podcast app revitalized my interest with the app’s set of content and features. With it, I’ve been listening to several subscriptions during my commutes and down-time, and below are some standouts (with my favourite episodes thus far highlighted):

For the Aspiring Entrepreneur – Re/Code Decode with Kara Swisher

Technology commentator extraordinaire Kara Swisher felt it wasn’t enough to report on the happenings of Silicon Valley at her and co-founder Walt Mossberg’s news site Re/Code, so she recently launched this interview focused podcast. In these episodes, she invites some of the today’s most aspirational technology pundits to share their insights on everything from the state of Internet of Things to diversity in the tech industry.
|| Highlight: Investor Chris Sacca, Smartphone Prices and “Buy” Buttons ||

For the Tech Aficionado – Exponent

I’d like to invite Ben Thompson and James Allworth to dinner (seriously) because it would be a delight to see their insightful conversations unfold in real life and even be a part of it. Their technology and society focused podcast feels more like an intimate conversation between two awesomely geeky forward thinkers of which we listeners get to be flies on the wall.
|| Highlight: Grow Grow Grow Fight Fight Fight ||

For the Music Lover – Song Exploder

Introduced via Roman Mars’s 99% Invisible (another lovely design-centric podcast), Song Exploder invites talented musicians across a spectrum of genres to share the creative process behind one of their songs. Many of the pieces are recognizable, and listening to composers deconstruct their works and tell their stories makes enjoying the final construction at the end even more satisfying.
|| Highlight: Alexandre Desplat – The Imitation Game ||

For the Design Nerd – Dollars to Donuts

Design thinking/User Experience Design/etc. is all the rage as of late, but these are different names for the same creative process that has existed for decades in any product design field. Successful user experience design relies on a deep understanding of your users, their needs, and their challenges. This is where user research comes in. In Dollars to Donuts, you’ll hear from lead user researchers at organizations like Etsy and Citrix describe how they use both quantitative and qualitative data to craft the ideal customer experience.
|| Highlight: Gregg Bernstein of MailChimp ||

For the Storyteller – Strangers

Lea Thau’s first episode begins with an account of a man who was interested in dating her, then not dating her, and ultimately wanting her toddler’s poop. Yes, poop. Now, if that doesn’t pique your interest, the rest of her episodes chronicling the ups and downs of life, the beauty and pitfalls of love, and her ardent appreciation for humanity will entice and beguile your ears.
|| Highlight: David Terry: Jesus ||

With the ubiquity of smart phones, it’s easy to see why podcasts regained their eminence; they’re portable, easy to digest, and often a form of newstertainment. Additionally, their incredibly intimate deliveries provide an audial experience that both teaches and entertains. I’d love to know: what are some other great podcasts you’ve enjoyed?

*Note: Check out this excellent article by @NatalieWires on the rise of podcasts here.

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Love in the Time of Technology

It started as an innocuous curiosity. After having dabbled in a few online dating sites before moving onto the mobile dating landscape, I was itching for a new way to get to know more of New York’s host of colourful characters. Tinder was intimidating, CoffeeMeetsBagel and HowAboutWe had been messy and less appealing user experiences, but I wasn’t yet entirely discouraged.

A friend exclaimed one Friday night that she had a date with a guy she met off Hinge the next evening. I was intrigued. She whipped out her phone, opened the little blue and white icon, and a few seconds later a list of male prospects and their details loaded the screen.

Given that the recommendations are friends of friends within your Facebook network, Hinge felt like Tinder’s distant and less creepy cousin. There wasn’t much to lose, so I signed up that weekend and proceeded to await my first batch of mid-day recommendations.

The first few weeks of use were uneventful. A few right swipes a day with a majority of recommendations getting the nay-say. Details most often included employer, university, height, and some fun preset interests like “beer snob” and “early bird,” all accompanied by a series of profile photos. Some more dedicated individuals populated their ‘About Me’ sections with witty quotes or descriptions of what kinds of relationships they were seeking.

I kept my own profile to a minimum. I was curious, but preferred to maintain a more laissez faire approach to my mobile dating activities. From time to time, I’d respond to a handful of conversations initiated by mutual matches, but most of the conversations fell flat. A match meant both parties had mutually identified the other as attractive and interesting enough for a deeper perusal. The problem was that once a conversation began, an incompatible conversational aptitude made it quickly evident that nothing would come of the match.

While some people were truly trying to find their partners in a city that can be overwhelming for whom bars and small-talk are less comfortable, my use remained primarily tangential. Of course, that changed when I agreed to take one virtual conversation into reality.