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Everything you need to land the first investor. Explores secondary brand association, tips for marketing your pitch to investors, and how to create "validation marketing" that leaves the right taste in their mouths after you\'re gone.
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Marketing “On The Cheap”
Everything You Need to Land the First Investor
Presented By:Jeff Takle [email protected] (857) 277-9050
1. Branding the Company for Free2. Meeting with an Investor3. “Validation” Marketing4. Boatload of Free Stuff
Laying the Ground Rules What’s the “down side” of trying? Speed = I may skip over your question Bathroom & Snacks
Agenda
The Beginning…
Pick an Idea Build Credibility Get a Meeting Make them “Believe”
Stage I: Branding Stage II: Investors Stage III: Validation
Stage IBuilding Credibility
• Getting Other People to Spend Millions to Make Your Brand Look Better
• Why SBA Awesome• How to Get Some
This section brought to you by:
What is your first impression of this site?
What’s a synonym for
“doggie doo?”
The typical engagement for
this company yields $1.2 million in revenue
What is your first impression of each of these people?
True. Effective? Nobody cares…
Also true. Effective? Why?
Jeff spent a year basically unemployed and drinking expensive coffee at Diesel Café in Davis Square, waxing poetic about the next evolution in web technology. He made no money during this time and didn’t shave. His family thought he was being a bum. He thought he was a “diamond in the rough” waiting to be discovered.
Jeff is a nationally recognized speaker and entrepreneur who’s provided commentary on the current financial crisis to CBS Evening News, been featured in the Wall Street Journal, New York Times, and every other major publication of record.
To get press, buzz, and funding, you need to be a compelling story. What’s the best version of your answer to an investor’s: “Who are
you?”
What is Secondary Brand Association?
+ =
+ =Anything
What is Secondary Brand Association?
Taking an existing brand, well known to your customers, and placing it nearby your brand in order to gain credibility, overcome customer objections, and inspire buying habits.
Ask for permission? Assume it? There is no formal method to 99% of sba
Ethical vs. Unethical
What is Secondary Brand Association?
SBA is how you get other people to spend millions to make your brand look better.
Overcomes Fear of ◦ Being first◦ Being the only customer, investor, partner◦ Being around…you might close down
Creates Fear of◦ Being left out socially (Clothing & celebrities)
◦ Being last (Energy drinks & race car drivers)
◦ Going with an inferior competitor (Apple vs. Microsoft commercial)
For customers For investors
Why Brand Association is Awesome
1. Identify your biggest customer objection. 2. Pick a brand that addresses the objection. 3. Make an association. 4
Promote it.
On your web pages, business cards, and voicemail…
How to Execute Your Brand Association in the Next 2 Days
“Widgets & Buttons”
Who will “vouch” for your product, either explicitly (testimonial) or implicitly (scores)?
“In the News..”
What do you think when you see coverage fromCBS Evening News & placement alongside Obama?
Blowhard!
Impressive!
Quality!
Cutting edge!
International!
“Our Partners”
On Your Biz Card
Get creative, be honest & use what you’ve got
Voted “Best Quality Food” by Somerville citizens
Jeff PickleHead Chefj.p. two. designs100 Highway RdSomerville, MA 02145
On Your Voicemail
Pick an SBA partner with a purpose! - This one helps overcome a top customer obstacle, the “credibility” question!
Hi this is Jeff at RentingYourHome, an Entrepreneur Magazine Top 500 company. The recent housing crash has our phones ringing off the hook but I promise to get back to you within 24 hours if you leave a name, number, and best time to call. Thanks!
Stage IIMarketing to Investors
• The “Average Day” for an Investor
• Telling a Story in 2 Sentences• How to Look Like an Idiot, Fast
What’s This Guy Doing?
He’s answering the investor question: “What Does Your Company Do?”
Hint: He’s machine-gunning somebody
I run a web company. Well really we do property management and help a lot of people like landlords and small property managers to do all the things that they normally do, but on the web. Like, we help people collect rents by credit card and electronic check. Did you know that while 89 percent of mortgages and over 93 percent of auto loans are paid by electronic methods that fewer than 5 percent of rents are collected online. This is huge opportunity for investors. Are you an investor? If you are, let me tell you about this other stuff the company does too. You’re gonna love it.
We run credit checks, not the really crappy kind but the kind that landlords love to get. And, even though we haven’t built the capability yet, we’re going to deliver a risk metric and tenant screening product that’s going to be the best thing anyone has ever seen. Because you see everyone else out there is pretty much an idiot and I spent about 10 minutes thinking about this idea so I’ve probably got it licked. Well, I guess that’s 9 minutes more than I spent preparing my elevator pitch…
Hey, where you going???
Respect How Many Pitches Your Investor Hears in a Typical Day
Number of deals seen by a partner~500 every year(that’s 10 every week)(that’s 2 new deals every single day)
Number of deals they invest in ~10-15 per year total (2%-3%)
Dominant format 1- or 2-pager summary of the idea, financial performance, the market, etc.
Where do deals come from?2/3 from intermediaries (investment bankers, lawyers, accountants, etc, aka “referrals”)1/3 direct from entrepreneurs
The “average” day for an investor…
On average, a partner at a major VC firm sees 2 new business plans EVERY SINGLE DAY from an entrepreneur just like you. <Gulp!>
What’s The Impact of Seeing So Many Deals?
You say They hear
I’m finishing up my MBA I am unproven; investing in me is a huge risk.
Will you sign an NDA? I am a huge waste of your time.
I haven’t invested any of my own money yet. I don’t believe in the product but I want you to.
I don’t want to ask my friends or family for money.
I have so little faith in this product that I am ashamed I’d lose their money. I’d rather risk your money than their friendship.
I don’t have a prototype. I have no idea if this thing can get built.
I don’t have a management team yet.I want you to do the hard work of finding people who will believe in me and this product.
Anything longer than 60 seconds… I have no idea why my company should be important to you.
Avoid the following when “telling your story in 2
sentences”
Respect how many times they’ve heard the exact same pitch. You must immediately answer why your opportunity is better than the other 499 opportunities they’ll see this year.
Here’s an example of a great, seasoned pitch: http://vimeo.com/7465598
1. Write a killer 1- or 2-page summary2. Find a way to get a personal referral or introduction to your investor3. Do whatever you can to get a face-to-face meeting4. Show up early, have electric energy, and blow their hair back5. Know your audience
Most venture capital investors want only explosive ROI – show them the numbers and make them believe that you believe the ROI is attainable
Most angel investors want to mentor and make good ROI, in that order – show them the numbers and seek their advice (see study)
What Can You Do to be More Successful with Investors?
In every communication, compete with 499 other entrepreneurs.
Show why your opportunity is not only viable, but better than all the
others they’ll see.+
How to look like an idiot, fast…
“…rather than reading a report, [an investor] wants to hear the evidence in PowerPoint slides, white board presentations or “somebody just talking.”◦ “Investors Pay Business Plans Little Heed, Study Finds,” New York Times
http://www.nytimes.com/2009/05/14/business/smallbusiness/14hunt.html
“Typically, entrepreneurs make their initial pitch to angels in an informal session. If their idea is judged to have promise, they may be invited to give a PowerPoint presentation followed by a question-and-answer session.”
“First, he said, have a product on the market. “Nothing speaks more loudly than revenue coming in,” he said. His two-year-old company…had sales last year of $25,000 and is on track to increase that by tenfold this year.”
“Second, do not ask other people for money unless you have spent your own. He has put $105,000 of his savings into his firm and raised $185,000 from family and friends.”
“Third, the business plan you show to potential investors should be concise. He suggested using software on Angelsoft.net.”
“In Pitching to Angel Investors, Preparation Tops Zeal,” New York Timeshttp://www.nytimes.com/2009/06/11/business/smallbusiness/11hunt.html
Don’t Believe Me?
Stage IIIValidation Marketing
• Set up the website and email• Competitors and references
“Validation Marketing”
WordPress themes are free and fantastic
Website◦ Quality counts◦ A great 3-page site is better
than a terrible 20-page site◦ Don’t sweat domain names
Email◦ Same as website domain◦ No “.edu” (unless it’s an MIT
engineering startup)◦ No “@hotmail.com”
It’s the stuff an investor will look at after you give your pitch and leave and may determine whether you get a second meeting or a callback.
You made a great pitch…now…is this guy/gal legit?
Validation Marketing doesn’t guarantee a thing. It is not an absolute requirement. It only improves your chances of success.
“Validation Marketing” – Part II
Show you are aware, but not afraid, of your competitors
Competitors◦ Bring samples of competitor products◦ Highlight 1-2 things you do better◦ Translate that into $$$ terms
Secondary Brand Association is your friend
Bring References◦ Endorsements◦ Testimonials◦ Scientists◦ Research companies or reports◦ Industry analysts◦ PhD’s, famous people…◦ Bring samples to pitch; leave behind
Boatload of Free Stuff
Extra resources for you…
Resources Cool stuff
Website Analytics◦ Google analytics
http://adwords.google.com (best quality)◦ Windows Live analytics
http://www.officelive.com
◦ Site vs. Site◦ www.compete.com◦ www.websitegrader.com (easiest)
Cheap Web Templates◦ www.templatemonster.com◦ www.flashden.net ◦ www.wordpress.com (easiest)
Email Marketing◦ RatePoint – www.RatePoint.com, has
customer testimonials capability◦ Constant Contact –
www.constantcontact.com
Create a Video Tutorial◦ Camtasia Studio 6, Free download from
Techsmith, www.techsmith.com
Help Desk / Support Center Software◦ SmarterTrack (free download 1 license) from
www.smartertools.com
Social Media tools◦ Auto-post to 20 sites? www.pingfm.com◦ Organize your Twitter? www.tweetdeck.com ◦ Free blogging software: www.wordpress.com
◦
◦ Biz Cards◦ Vista Print (free, plus shipping)
www.vistaprint.com
Next Up…1. Go land your first sale2. Raise some capital3. Brag to your momma
