Precursor Ventures - Charles Acceleprise VC - on sales process
- Whitney Sales- whitney@acceleprise.vc- Enterprise sales early stage investor B2B space- @thesalesmethod
Whitney Graw
- Becki Degraw- Wilson Sonsini, Partner- rdegraw@wsgr.com
Acrew Capital
- Lauren Kolodny- Twitter @LaurenKolodny
Do fewer things in terms of revenue stream. Do them better and faster.
Give a great example of the solution to the problem that a user is experiencing
Don't care about recognition on the Forbes list. Just focus on product, customer, revenue and team member
Show how business model and product strategy are closely linked are fit together. Show how business model will scale to a 100 million dollars revenue in a year
How to get laggard industry to adopt the technology
De-emphasize do-gooder (save the world) stuff in the content. It does not seem profitable
Show traction earlier in the deck
- brain treats companies with product and actual usage builds way more credibility earlier in the presentation- if don't have customer but have demo, show how it works- if product is strong start with product, if performance is strong start with performance- show bottoms up business model this is how we work- this is how we charge- profit margin??
- Looking for net negative churn- Like easier bets and very focused- elegant and simple means scale- complex means founder might need to spend a few million dollars to figure out their business model- Sales process- problem solving- project management- the larger organization being sold, the more they want to be told what to do.- record your calls so that you can reference it later on for product development and education- work your network in the early days- use twitter direct messaging- for engaging engineers, you won't be able to engage them directly. use community development and content and APIS
- handling price rejections in early days not optimized for price- but to learn for use case- see early users for partners- use what you learn in the qualification and use that as reference for the price point- anchor to how much the problem is costing your company right now
- let your early customers be your guide- Negotiating term sheets- Becki Degraw- Wilson Sonsini, Partner- rdegraw@wsgr.com- Types preferred stocks- convertible notes- safes
- components Valuation- pre/post money valuation- option pool - dilutive to founders- liquidition preferences- board composition- stocket holder vetos/controls- investor rights
- focus on how much you need till 12 to 18 months the hiring plans- 90% shares- 10% option pool- help with negotiating the options pools
- talk about how outstanding convertible and SAFEs are accounted for - pre-money valuation- Get legal council to prepare the cap table to see the dilution- preferred stock used to keep common stock cheap for employees participating or non-participating preferred shares- participating gets to double dip after the preferred payout- usually only happens during down round or PE is involved- should not see it during initial round
- Board make sure to have odd number to avoid deadlock- smaller boards are good - keep it to as small as possible- hires or fires the CEO- financing transactions - new pool- M&A transactions- Series A - common should control board- Series B - more balanced board common and preferred- Seed round - 3 directors- Series- 2 common directors - 1.5X voting rights- 1 seed director- 1 preferred director
- Preferred investors will usually ask for board seat negotiate down to observer
- Prorate or information rights are reserved to major investors - cross a certain threshold- Founder re-vesting usually during Seed stage and Series A
- If founder puts in money treat that as convertible note and convert at the next round- demand note - to get paid back during the next round- totally ok if it is a small amount in there- 200K easy versus 2 million- If raising less than 2 millino USD just use convertible or safe notes for seed stage
- Put founders on a vesting schedule for optics purposes- US investors only what to invest in Delaware LLC Corps- Vesting is important for protecting company against vagrant founders and employees- We are in a company/founder friendly market right now investors are doing things we haven't seem the doing in many years- putting down term sheets 2 months ago with nothing- need to get in earlier and earlier to beat the valuation from investors- create hype and interest
- For small financing round - seed round small amount of money- Use YC safe note
- Million dollar Marketing campaign- Unit Economics- creative testing- Landing pages- media buying- metric Cold traffic needs to convert at 2%- CPM needs to be lower than 20- Ads click through rate > 3%- CPA 1.8- gross margin needs to be 70%- COGS less than 30%- 4000K impression- 5% add to cart
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If has no prior competition - make really good videos- GrowthUniversity.IO
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Looking for 100 million revenue in 10 years with 50% margin
- Avoid the Total addressable market (TAM) trap We have 15 people paying us- we acquired them for CAC XXX- we know their LTV right now to be X- we are going to spend X on Facebook, Google and LinkedIn for CAC XXX
- Structure to use to follow based on lead investor SAFE notes is cheaper and less expensive to issue and no maturity dates