Founder and CEO of Black Dog Venture Partners, Scott Kelly, is a 25 year fundraising, marketing, sales, training and publicity veteran. Kelly has raised millions of dollars in capital for disruptive companies, garnered national media coverage for hundreds of regional and national brands and generated millions of dollars in revenues for the companies he has represented. I recently heard Kelly speak at a City Summit event, and he hammered home some great points that every startup seeking capital should know.
How Not to Suck
When Kelly speaks to hopeful entrepreneurs, he gets real, and talks directly to their needs so they can learn how to:
Create a pitch that closes investors fast
Find and secure their first round of funding
Use publicity and social media to attract investors
And overall, how not to suck at pitching, and everything in between
Everything In Between
There are so many ways startups can get off-track or distracted, and the result is a team or founders that are unprepared. Kelly talked with me about the most common areas of lack he sees when startups come to his team for assistance.
Clients are usually lacking:
A seasoned team
Proper structure for their company
It's tough to know what to expect when you've never been in a specific situation before. This is why it's so important to have mentors or to work with a partner like Black Dog Venture Partners. This helps entrepreneurs avoid going into make or break situations unprepared. I cannot tell you how many times I've listened to pitches that could have been so much better if the founders were prepared for my questions, expectations, and had the answers I was looking for.
Go Out and Sell Something
While I agree with every area of lack Kelly shared with me, the other major area I see lacking, often, with startups is market proof. What I love to see is a startup who is generating revenue by selling something that is also, on the flipside, providing market proof they can use to pitch their company when the time is right. A lot of startups think they need to go right for funding, and this just isn't true. Kelly calls this "cost-effective, non dilutive capital," so entrepreneurs can build a revenue stream while getting real-time product market fit feedback. This allows founders to keep their equity to themselves and to prove out their concept and fit first, which saves so much time and money.
Get Your Pitch Right
The other side of Black Dog Venture Partners approach to matching startups with funding are investor events throughout the country called VC Fast Pitch. A New Yorker, Kelly understands how quickly you must grab the attention of a potential investor. He calls this your first date... either you wow them at the start, or your chances of a callback are slim. So how do you know what a potential investor wants? You must be able to answer the following questions quickly and with so much clarity, there is no question whether or not you've come prepared.
What's your problem? How big is the problem? Why is it worth solving?
What's your solution? How is it better? Is it cheaper, faster, better, more efficient?
How do you make money? What are your phases of revenue generation?
Is your team adequate enough to execute?
What's your ask?
4 Steps to Success
When a startup believes they are ready to seek out capital, there are 3 steps they need to take to make sure they are fully prepared. Luckily, Kelly shared those steps with all of us.
Step One: Do your homework. "I had a team pitching to me, and this slide came up that had a list of their competition, and when I asked them to tell me something about one of their biggest competitors- they couldn't and that call went silent real quick." Study your market, know your competition, and be prepared to differentiate.
Step Two:Get your structure right. This is one of the biggest misses I see, and Kelly agreed. A VC coming in will expect you to have the proper legal structure to be operating and to even consider investing. Somehow this gets overlooked often, but if you've been building prototypes in your garage and then go out looking for capital, the difference you will run into, undoubtedly, is the level up required to make this happen.
Step Three: Know your numbers. At Black Dog Ventures, Kelly and his team put their startups in touch with their accountant to make sure they know their numbers and their numbers are accurate.
Step Four: Just do it. Even if you have a bad pitch, that will be enough for you to learn to not do that again.
There's Still A Chance Things Won't Work Out
With all of this information (it's a lot, I know), there is still a chance that things will not work out in a pitch meeting or with a potential investor. As an entrepreneur, perseverance is one of the necessary skills that will keep you moving forward. Failures are pivot or learning opportunities, or stop points - you decide.