Week 2 for our five companies from Malaysia started on Monday with a Master Class titled “Startup Financing” led by Rebekah Wu, founder of Right-Hand Partners, a VC relations company.
Rebekah shared valuable information in the form of short presentations and words of advice that she has picked up from investors and venture capitalists over the past 10+ years. She talked about the importance of having
- a strong team
- a very large addressable market
- defensible IP
- and a disruptive business model
She left the entrepreneurs with plenty of “Do’s & Don’ts”, tips and good advice about making presentations to investors. They learned that “a demo speaks louder than 1000 slides”. And what not to say during that all important VC meeting.
Later in the day, we were joined by Zach Finkelstein, a Senior Associate at Lumia Capital, a Silicon Valley investment firm that focuses on later stage Internet and Software companies expanding into emerging markets. Zach spoke about important things to highlight about your startup company when talking with investors. For example, TRACTION – there’s always something you can describe, whether it’s how quickly you’re growing (based on number of users, visitors, engagements, or sales) or the number and quality of marquee customers you have been able to attract so far. (Everyone needs that slide in their presentation where the curve goes up and to the right!)
After an engaging conversation, Zach grabbed a chair and watched each of the teams present their companies. The focus was on business models, and many assumptions were challenged and looked at more closely. Zach asked questions like
- What’s the payback time per customer?
- Who are your main competitors?
- Do your initial customers continue using your product? What percentage do you lose? Why?
- Are your target customers ready to adopt a solution like the one you are proposing?
- How did you come up with your pricing? What are your margins?
Most of teams had at least some of the answers ready and everyone learned where they needed to tighten up their pitches. Zach’s overall feedback was that all of the teams need to be prepared to discuss their competition. He said “it’s ok to be in a competitive space if you have a better solution, but it makes investors nervous to not see a thoughtful competitive landscape”.
Valuable feedback and good lessons today – Tuesday the teams are offsite, with a breakfast to discuss recruiting, followed by development workshops at Amazon.com and Salesforce.com.