6 Core Start-up Communication Starters

by: Lisa Calhoun

Use these must-have conversation starters to attract and interest private equity and VC investors:

For a start-up seeking capital it’s all about perception. There are LOTS of great business ideas out there, and investors see all too many of them. In fact, investors complain that the maturity of SAAS and cloud apps has made everyone and their brother Bubba think they’re an entrepreneur—and so today’s private equity and VC people are bombarded like never before by a slew of fascinating, technically diverse, and hard to decipher concepts.

Yet one thing remains clear: the one thing investors are looking for is a better than average expectation of being able to sell your company for a better than average price. To believe that, they have to be convinced your business concept is sound in three key ways:

1. Technically—it can be executed, and you have the capability, technology is mature enough, and the IP involved is ownable.
2. Financially—the business can be scaled from the kind of running start they can help you achieve. For example, some businesses need a million—some need hundreds of millions—to get the scale they need to be significant.
3. Managerially—the business has the right people in place, or within reach, to be able to optimize and scale the technology.

Since most investors are generalists, they rely on a multi-stage learning process that includes several orbits around your business to help them gain the perspective they need to make an investment decision. As you tell your story, realizing which phase of this courtship process you are in makes a big difference in the kind of depth and perspective you share—just like any courtship. If you are being courted by numerous investors—as all hot start-ups are—then being able to serve information rapidly becomes a challenge. Having your industry leadership platform in shareable formats really helps.

Most start-ups find the following basic toolkit of communications material to be a strong foundation from which to start like The Loc Lab. As an industry leadership and publicity consultancy engaged with numerous scaling tech companies both pre- and post-investment, let us at Write2Market know if you need some help or pointers on this stuff.

1. 1. Basic web site. Your web site should focus on doing one thing in the early stage—telling a compelling story. Want to learn more about how to do this well? Read STORY WARS by Jonah Sachs or MADE TO STICK by Chip and Dan Heath. Or attend one of Write2Market’s ANGEL TO ACQUISITION publicity seminars in Atlanta. Your web site should:
      • Tell your story at a mythic, 50,000-ft level. What are you changing in the world, and why does it matter? What is your motivation?
      • Provide a way to “join your cause” or mission (sign up for updates, early releases, betas, etc.).
      • Provide some founder bios.
      • Showcase your voice and vision.
      • Showcase any press about your company.
      • As you attend events or pitches, mention them on your company web site

      Your web site does NOT have to tell how you do it, how much it costs, or where you are in your development.

   2. Elevator pitch. You need a tag line and a once-sentence “concept statement” about what you do. This is what you’ll mention all the time. Lots of times, you’ll meet investors in person, briefly. You want to be able to shake their hand, look them in the eye, and say it with complete poise. Here are some I like right now.  The key thing is these short sentences don’t tell it all—they invite the next question—the question from the investor. Because of that, they open the door.
      • George Yu, Variable Tech. “We are creating the world’s first sensor platform. What iPhone did for Apps, Node does for sensor applications.”
      • Jared Heyman, CrowdMed. “Harnessing the power of crowd wisdom to diagnose disease.”
      • Sean Cook, ShopVisible, “Evolving the ecommerce ecosystem—faster.”
      • Rob Frohwein, Kabbage, “Easy cash for online sellers.”
   3. Pitch deck. Your deck is your standard calling card. It should cover, at the very least:
      • Your vision. Why is what you are doing important?
      • Market size. How big is this market now? How big is it in 10 years? Who are the major players? What kind of growth should investors expect?
      • Why is what you are doing unique and likely to be the “hot property” of this industry in a few years? Why is your approach a game changer?
      • Why should we believe this team, your team, can do it? At least gloss over the successes and acumen of your core team or any planned team members you will add once funded.
      • What are your key financials? What does the sales pipeline look like?
      • If you have current partnerships of note, or customers of note, mention it. This helps with your credibility.
      • What is your exit strategy? So, if you do all that you say you are going to do, what then? Paint some high level likely exit opportunities. Mention as many exits as you can that are “like you” so that investors realize your start-up is part of a trend or maturing movement, not a one-off. Investors are pack animals, and by that, I don’t mean donkeys–I mean high level alpha predators with expensive appetites. They chase down fat herds of caribou, not measly mouthfuls of cavias. Make sure they see your technology is the proud lead buck of the biggest caribou herd this prairie has ever seen.
      • How much money do you need, and what will you do with it? It’s interesting how many start-ups don’t leave a closing slide that makes it easy for interested investors to follow up right away. Share all your information, including your phone number.
   4. Detailed financials. After seeing your pitch deck, and perhaps after reviewing your web site, an interested investor will often ask for a meeting. If all goes well in that, you’ll have to send over detailed financials at some point (after NDAs and other niceties). These financials change quite a bit as your company grows and matures, but keep an investor-friendly (simplified) spreadsheet of financials and projected financials on-hand so it’s easy to share.

1. 1. AngelList listing. AngelList allows start-ups to have a presence in the larger world of investors and fellow start ups. It even has a decent job board to help you build your team with people who know and love the start-up pace. You’ll want to connect to everyone you know on AngelList, post your pitch, and your elevator speech.

1. LinkedIn company page. LinkedIn is the current water cooler for business. Use the LinkedIn company page to build out your company’s story. Post updates about where you are pitching (like SEVC, Venture Atlanta, Southland, etc.), what you’re working on this week, and what the company is excited about achieving.

Want more?  Read this blog post on telling your story from Write2Market with investors’ perspectives.