Raising Seed Capital: Top Tips from NYETM

There is another great NY Enterprise Tech meet up tonight, on recruiting tech talent for magnet-1189869_1280startups.  Clearly I am late in blogging about February’s, which was about how to raise seed capital – so I am taking care of that now, with this post.

The topic is paramount for anyone who has a great idea, but needs potentially game changing funding.  February’s NYETM featured a panel that offered some very helpful tips. Work-bench Associate Vipin Chamakkla guided the conversation, to help attendees get answers to questions about seed investor “appetites”, pitching preferences, etc.

The panel included Karin Klein, Partner at Bloomberg Beta, Eliot Durbin, General Partner at Boldstart Ventures, Mike Brown Jr., General Partner at Bowery Capital and Brad Svrluga, General Partner at Primary Venture Partners.

As you will see, each has their own approach, yet a few common threads emerged. It helps to have connections.  Be smart when approaching investors: do your homework and make sure that there is a match.  Every venture and market space is different; there’s no single formula for evaluating startups.

The demo portion is an important part of every NYETM, and I should mention that were some very cool demos before the panel took the stage – see the end of this post for further details.

Please feel free to chime in via comments, or e-mail me if you think I’ve missed anything.

Describe your focus, portfolio examples and average funding check

Eliot Durbin said that Boldstart invests in enterprise tech, smart data, big data, and the Googlization of IT. Their checks are in the $750K range. A portfolio example is Replicated, which was on the evening’s demo roster (see the end of this post).

Bloomberg Beta invests in companies that make work better, in the $200K-1M range, said Karin Klein.  The technologies range from security to HR, and include analytics, bots, and machine intelligence. They were in early on Pathgather, an online learning solution.

Mike Brown of Bowery Capital tracks ventures that relate to Internet natives and their influence on IT spend.  They like to lead or co-lead investment rounds, in the $500K range.  ActionIQ, a marketing tech play, is in their portfolio.

Brad Svrluga said PVP invests $250-700K and likes SaaS, enterprise mobile, and vertical industry solutions, including fintech. They funded Alloy, an API to Know Your Customer (KYC).

When is right time to approach seed investors?

Eliot: “We want to be the first check.”  The timing can vary, for example in Replicated’s case it worked out well, as they saw and solved a huge pain point.

Karin said that earlier is better, in general – but this depends on who you are.   A founder with a track record can afford to wait longer.

The prototype stage is a good milestone.  But this can vary, e.g. Pluralsight bootstrapped for nine years before seeking funding.

If a venture is pre-product, what else does it need to have?

Mike said there are some non-obvious factors.  In enterprise tech, it is good to see that the founder appreciates implications of the long sales cycles involved.  They should have an ideal customer profile in mind and factor in sales velocity equations.  Could the founder sell him the pen sitting on his desk?

Brad likes founders who are solving a problem they’ve lived through, and to see that they have a real understanding and passion; as opposed to business school projects.

What KPIs do you evaluate when vetting startups?

Eliot: “It’s got to have magic.”

Karin said that it is a highly contextual, and hard to generalize.  E.g., with HR tech you want to see easy end user adoption – Pluralisght hit upon a pricing model that was very attractive.

What is the best way to pitch seed investors?

Karin loves to see demos; use a pitch deck if it helps tell the story.

Brad likes a good Genesis story.  He really cares how they’re pitched, because it’s the “single best data point for how founders pitch customers and employee candidates.”  A pet peeve is unrealistic market size numbers.  Coming in through another founder in their portfolio is the best way. Sending a cold email suggests that you are not being strategic.

Eliot: When pitching, walk in with a good sense of what they are looking for and what you want.

Mike likes those who are very good at selling software.

Audience Questions: One bootstrapped to $40K monthly revenue, and was wondering if they should go to seed or A round funding.

One of the panel members said “Skip us if you can – you will retain more equity.”

Why take your money?

Elliot said that Boldstart can help get customers.

Karin offered that Bloomberg Beta can help fill in gaps in the venture’s team.

Brad talked about PVP’s expert network, which saves search fees for portfolio companies.

What percentage are repeat vs. first-time entrepreneurs?

“Both are nice.”

“This depends on the bias of portfolio.”

“For the very first time, there’s not as good a chance”

Brad said that about half are first timers.

Before the panel, two vendors showed their wares.  Replicated is a container-centric platform that enables software companies to manage and distribute an enterprise-grade, installable version of their product behind the firewall and into their customers’ private data centers or private clouds.  HYPR   decentralizes the storage of biometric data to enable secure password-less authentication across mobile, desktop and IoT systems.

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Social Media Week NY Seminar Wrap

If you are in PR or marketing, it is probably a familiar feeling.  You have some great news or content to promote – but it SMW New Yorkis really tough these days to get anyone to care.  Our Social Media Week New York seminar yesterday addressed the challenges and offered solutions. Thanks to all who attended, and especially Work-Bench for letting us host the event there; and our own Vladimir Spencer and Mike Bush, for their help in managing the event.  Mike led the charge with live tweeting – you can see the Storify wrap below.
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No one Cares about Your News – Now What? Join us on 2/23

The game is changing in marketing and PR. There’s increasing competition for the SMW New Yorkcustomer’s attention. It’s difficult to get anyone to care about news, content and brands.

Traditionally, most sought press coverage to build awareness and credibility. However, it is tougher to get the media to cover PR-driven news these days. And people don’t need to read articles to vet new products and services.  They can just search Google, or learn about them from friends, family and colleagues on Twitter or Facebook.

But you have KPIs nipping at your heels! You need to build buzz and visibility now! What is the secret to getting attention and motivating action?

Join us at our seminar in two weeks during Social Media Week NYC to find out. It is on 2/23, from 2-4pm at Work-Bench (110 Fifth Avenue).

Click on the link to sign up through SMW (if it says “Sold out” or you are having any difficulties, please send an email to SMW@FusionPR.com – we will do our best to make room for you).  Hash tag #SMWGetNoticed

 

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New Tech Reality Show: It’s Magic, is it a Leap?

While many were anxiously awaiting the results of the Iowa caucuses yesterday, tech magic-154526_1280media were caught up in another drama. They were buzzing about $793 million funding for Magic Leap, a secretive startup now valued at $4B.

The back and forth was about what Magic Leap will deliver, and whether they’ll live up to the hype – see the following tweets:

This is how Gizmag described Magic Leap:

“… it appears to [create] the illusion of 3D objects in the user’s field of vision…. Magic Leap’s device … beams a digital light field onto the user’s retinas.”

That actually does sound very cool. But language geek that I am, I latched onto the words some articles used to describe the technology: “mixed reality”.

Ahhh, reality used to be so – um, real – and much simpler.  These days we have many flavors: virtual, augmented, and now mixed.

That is great, but if you work in tech PR, you should avoid another kind of reality: distorted.

Distorted reality is when companies exaggerate. I always say “promise less, deliver more”, but the following articles detail journalists’ frustrations about overstated capabilities in cloud services and DevOps.

The Register: Whew! How to tell if a DevOps biz is peddling a load of manure

Wall Street Journal: When it Comes to Tech Services, Cloud can be a Nebulous Term

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Did Fox Jump the Snark? (Brief History of Fake News Fails)

“Childishly written!”

“A disgrace”

These are the words most junior PR account executives fear hearing from clients about 65779261press releases submitted for review.  But it was Donald Trump that just said them, in tweets and interviews, about a statement that Fox News issued yesterday.

Fox tried to use humor and taunts in a last ditch attempt to goad Donald into joining tonight’s presidential debate. Apparently, an article would not be journalistic – so they chose that good old staple of ginned up news, the press release, to send the message.

(I guess humor is subjective. What do you think, was it funny or not? Here’s an excerpt, as cited here: “We learned from a secret back channel that the Ayatollah and Putin both intend to treat Donald Trump unfairly when they meet with him if he becomes president — a nefarious source tells us that Trump has his own secret plan to replace the Cabinet with his Twitter followers to see if he should even go to those meetings.”)

Well, It is now the eleventh hour, and it seems that the Fox News mock statement backfired. Trump really is taking his ball and going home. To the network’s credit, they did not yield to his demands that they remove Megyn Kelly as a moderator.

So who won? I guess that remains to be seen. But it is pretty clear that the press release idea helped seal the deal against his participation – likely not Fox’s intended result.
Meanwhile, the episode made me curious about other fake news releases and their consequences.

I asked our team for examples, and they sent these:

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How to Get Press for Your Startup

Your Story HereTop Reporters Share Tips at Enterprise Tech Meetup

New York Enterprise Tech Meetup is one of my favorite tech events in the city.  So I quickly signed up when my friend John Kaczala (also a NYETM regular) alerted me to the January session, about getting press for startups, and its star panel of tech journalists: Jonathan Shieber of TechCrunch, Robert Hackett of Fortune, Alex Konrad of Forbes, and Jing Cao of Bloomberg.

This meetup was interesting for several reasons. Most startups would be thrilled to get coverage in any of these publications – yet this can be a tall order. So it was nice to hear about the journalists’ preferences first hand. These are NYC-based reporters, who are closer to home than Silicon Valley-based press.

The moderator (Mickey Graham of Work-Bench) asked great questions, and the panelists answered – it was all very amiable and informative (I thought there might be more fireworks, given the competition in tech journalism).

Some common themes emerged. Warm intros help. You should know the reporter and publication, and tailor the pitch. But pinging them on a topic they just wrote about likely won’t work. They do try to read your emails, but can’t respond to all. Be interesting but brief. Follow up but don’t spam. Embargoes and exclusives can work, with certain caveats. Disruption is a great story.

The demo portion is an important part of every NYETM, and I should mention that were some very cool demos before the panel took the stage – see the end of this post for further details. But first, the panel Q and A:

How do you feel about startups reaching out to you?

  • Cao reads every email. “Send an email and follow up in week.”
  • Hackett welcomes pitches, but doesn’t respond to all.
  • Konrad he hates calls. Emails are fine, he likes intros.
  • Shieber reads emails too: “You never know when the next pitch is going to be a great company.”  He added “one follow up is fine, the third time is never a charm.”

How can they rise above the noise?

  • Shieber: “Warm intros are the way to go.”

Does it help to bring on a PR firm that has relationships?

  • Cao said it depends on stage of the company, and helps if the firm has the right connections.
  • Konrad pointed out that he was a mentor-in-residence at Techstars, and said: “PR firms can help if you’re really aligned. Be up front from the beginning about your goals.”

What news does it take to get covered?

  • Hackett doesn’t do product news. He said “be interesting, stick to core aspects. Make it as short as possible.” He likes to learn about esoteric subjects, and covers cyber security, but you can pitch him even if you’re not in that field.  He has a “hopper of ideas” that he lets “marinate” and is receptive to pitches and briefings that help him advance these stories.
  • Konrad gets a lot of product pitches. “If the news has a surprise, or challenges an incumbent like Apple, send it to me.” Otherwise you’d be better off pitching a blog.
  • Shieber: “Know your audience, don’t pitch me the same thing you would to a trade publication.”
  • Cao likes to meet people and doesn’t need a specific story. If she gets to know you first over coffee, then she’s more likely to recall you and be receptive to a pitch.

What about exclusives and embargoes – do these work?

  • Cao: “It can help with coverage, but is not a sure thing.” She added that Series A funding can be a tough sell to an editor if it is less than $40M.
  • Hackett: “Exclusives can make a difference, they can help.”
  • Konrad: “An embargo feels contrived.” Also, don’t contact him with the news that you’re announcing funding tomorrow, it is too short notice. Work within the journalist’s timing.

How far in advance should a startup pitch before news goes live?

  • Shieber: “It depends on complexity of story.”

Whom do you want to hear from? Should the pitch come from the CEO?

  • Shieber doesn’t want to speak with marketing, he wants to be able to ask probing questions.
  • Alex disagreed, saying that marketing can be helpful if they advocate for a story, or push the CEO to get a customer for example.
  • Shieber: “But you’d want to speak to the CEO, right?”
  • Cao urged not to promise something that you can’t back up.
  • Hackett:”Fortune prides itself in our relationships with top executives.”

What about contributed articles?

  • Shieber: “That is my job, I love getting contributions.”  He prefers quality over quantity, adding “but quantity is a great way to make money.” He also added that he likes new writers, and tries to champion them.
  • Konrad said they love contributors, but reject stories that are overt marketing. “Don’t be intellectually insulting,” he said.

The following questions were from the audience:

How do you validate pitches? Does it help if a major VC is a backer?

  • Shieber said “I trust but verify.” He added: “Just be good, be right.”
  • Konrad tries to find out about your expertise, and understand motives – e.g., why are you so interested in weighing in on Apple’s news?

What milestones do you care about?

  • Cao: “Dramatic growth, like going from $0-100M in one year.”
  • Konrad: “Anything your peers would be shocked about, e.g. getting your first $1M contract. Milestones that change the broader market.”

What about getting scooped by social media? Which platform is a viable competitor?

  • Konrad: “CB Insights does a good job of checking filings.”
  • Shieber is seeing more people circumvent the press process, e.g. by issuing a Medium post.

What about pitches that refer to one of your stories? Do they work?

  • Cao said that if she just wrote about something, she doesn’t want to think about revisiting the topic for another year. Just ask for a meeting.
  • Shieber: “Be succinct. Point out how your news fits in a trend.”
  • Hackett: “Save us time.”

Before the panel, two vendors showed their wares. Datavore, founded by Goldman Sachs alumni, demonstrated adaptive analytics for financial services that empowers business users with sophisticated BI capabilities.  VTS demonstrated their cloud-based commercial real estate leasing and portfolio management platform.

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HBR Covers the Death of a B2B Salesman – and Media Relations

My friend Neal Schaffer shared an interesting Harvard Business Review article, How salesman-232x300More Accessible information is Forcing B2B Sales to Adapt. The story questioned the role and relevancy of the B2B sales team in a digital world.

There were also some great takeaways for marketing (it’s a must read for those who don’t think social media is important). But the most interesting thing for me, a PR professional, was the one thing that was MIA.  HBR virtually ignored media as a channel of info that supports B2B sales. If true, does this mean that media coverage, and by extension media relations, no longer matter in this area?

DIY Buyers tap Self Serve Info

The HBR authors wrote: “Business buyers are more connected and informed than ever… digital channels provide access to information and enable self-sufficiency. When a buyer wants to learn about virtually any product or service, an internet search yields thousands of results, including online articles, videos, white papers, blogs, and social media posts. In addition to supplier websites, there are online sources (ranging from the self-serving to the unbiased) to help buyers learn and compare solution alternatives.”

I alluded to this trend in my recent Entrepreneur piece: “Who even sees or reads [tech news] stories? There are many other ways to vet the latest tech products and services (no one ever got fired for following Gartner’s guidance).”

Fighting Fire with Fire

How should B2Bers ensure that their sales teams don’t become outdated Willy Lomans? And is there still any significant role for PR when it comes to supporting sales?

Regarding the first question, the authors say, essentially, to fight fire with fire. Load up on data about buyers and use technology and digital channels to reach them. Your sales people need new competencies – they can’t just be “talking brochures”.

PR needs a new approach too, as I said in Entrepreneur. We’ve never been just about media relations – or sales. Yet media relations are still the bread and butter for many PR agencies. And most who employ PR hope that it will do its fair share to meet short (read: sales) and long term business goals.

Forward thinking PR teams are expanding their tools and approach. Good PR has always been about validation and building credibility – but there are ways to accomplish this beyond earned media. You can court others – e.g., analysts, and social media influencers – to get buy-in and mentions. You can work to ensure that your news appears where the buyer is most likely to see it (e.g. user forums, mobile news apps, social media news feeds).  You can craft and promote content that hits the hot buttons of buyers and addresses their informational needs.

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Here’s a Pitch: Get Tech Savvy, take a PR Briefing

NY Times reporter Farhad Manjoo wrote a nice story that highlighted the growing technology-is-a-givenproblem of tech illiteracy and its implications.  He wrote:

“People in the tech industry… act as if the products they build sit at the center of everything. But this year, the techies were right… not only did tech dominate the news, it often moved too quickly for politicians, regulators, law enforcement officials and the media to understand its implications.”

He goes on to list some of the big stories in which tech played a starring role, and our collective failure to connect the dots. Examples include cyber security, the VW scandal, Hillary’s emails, and the central role of social media in political campaigns and grassroots movements (e.g., Trump’s, the Black Lives Matter movement).

The article made an impression on me, as I read it right after seeing the movie the Big Short, from the Michael Lewis book, which illustrated the consequences of financial illiteracy. If more institutions took the time to understand the house of cards being built on the mortgage industry at the time, disaster may have been averted.

I think most would not argue about the central role technology plays in our lives. We can reasonably expect that it will continue to be featured in headlines. It also seems clear that there’s a collective ignorance, just challenge anyone (outside of the real techies) to explain nitty gritty details of Bitcoins, mobile payments, encryption, IoT etc.

I submit that PR, through our work with the media, can play a role in improving tech literacy.

First, I believe that the media should be held to a higher standard when it comes to uncovering and acting on information that can lead to change. The Fourth Estate is unrestrained by the bureaucracy of politics. It is a free press here in the U.S. and many other parts of the world.

The good news is the PR industry, and the tech vendors that we represent, are willing and able to spend the time needed to bring the media up-to-speed. There is a veritable army of PR reps and vendor spokespeople who love nothing more than sitting down and getting geeky with a journalist.

Sure, we have an ulterior motive. But we (most of us, anyway) also are happy to deliver background or informational briefings and understand that they come with no coverage guarantees. The rules of the game say that, in return, the journalist can get a crash course. OK, it is from a vendor’s perspective, but reporters are free to challenge and dig deep. We are happy to provide additional information and point out useful resources.

I don’t mean to imply that all (or even most) of the media are clueless about tech. And I fully understand that the problem is not just literacy. Reporters are under pressures that might discourage good old shoe leather journalism, as news cycles diminish and many are incentivized by quantity and clicks (a trend driven by – you guessed it – tech).

I am just saying that, for those who want to take the time to get smarter, there are many vendors fronted by PR pros to help out and get you the information you need.

Photo credit: Scott McLeod via Foter.com / CC BY

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Meetup Explores the Art of the PR Pitch

The NYC PR Innovators meetup hosted a session on The Art (and Science) of the PR Pitch CV57Q6OWsAAZ6Gxat District CoWork last week, where I participated as a panelist. Over 50 people attended, and organizer Erin Commarato ran a very lively and interactive session.

I am new to this meetup but will definitely be coming back, as I am extremely interested in PR innovation. Also, any forum dedicated to improving pitching is a great one, in my book.

There was lots of give and take, and just about everyone got a chance to ask questions and share thoughts. Co-panelist Roger Wu of Cooperatize spoke about new opportunities in branded content, and Stacey Miller of Cision’s HARO (Help a Reporter Out) offered data and insight gleaned from her HARO role and media feedback. Not everyone agreed, but the forum gave all a chance to chime in.  With Erin’s guidance and the panel’s input, we  were able to build consensus on most of the topics.

Our own Mike Bush did a great job live tweeting (thanks, Mike!). I share these and other tweets about the event below below (check out the expressions on our faces when the panel is stumped with a tough question).

Thanks Erin, Roger, Stacey and NYC PR Innovators for a great meetup.

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CUNY Meetup Showcases Journalism Startups

If you work in PR, it is good to keep an eye on the world of media innovation.  You don’t FergFH-iconwant to be the last to hear about the up and comers – e.g. the next BuzzFeed or Vice.   Some journalism startups aim to breathe fresh life into storytelling, and we might learn a thing or two that has applications for PR and content marketing.

That is why I enjoyed the demo night at the CUNY Graduate School of Journalism early this week. There was a good mix of concepts, spanning apps, local news, data-driven journalism and virtual reality.

I saw five demos, and they were all interesting. Most had experienced teams and investors and/or corporate backers. It is hard to know which ones will succeed – but I think they are all worth checking out.

Please see below for my quick thoughts on each.

Lenses 

Lenses, a collaborative effort involving News Corp., NYU, Columbia University and  the NYC Media Lab, is a web-based toolkit for the visualization of public data.

Anyone can point it to a data source (e.g. think NYC BigApps) and generate cool graphs that help users spot trends and glean insight.  Be sure to check out their upcoming hackathon.

Slant News

This ambitious undertaking aims to democratize reporting, through a site that lets anyone submit a story and earn from ad revenue.  Founder Amanda Gutterman set the stage by discussing her experiences as an unpaid intern at Condé Nast, and work at the Huffington Post. Of course, the latter taps an army of unpaid contributors.

Sadly, the content explosion has led to a cheapening of writing and reporting.  With Slant, she wants to give those who are not professionals a way to have their voices heard and make money.

Their editors work their magic on the content, selecting the best stories for inclusion on the front page of the site – and optimizing for SEO and social media.

I loved this one, and any site that pays writers.  They have been open since September and have a couple of thousands of writers.  It is no get rich quick scheme – the best ones get paid $1-2K month.  But hey, it is a start.

I think they have their work cut out.  There is the scalability issue – Slant will need an army of editors to do the job right, i.e. truly give more people a voice, and more content a fair shot.  There is also the old chicken vs. egg problem – how do you interest advertisers until the site has reached critical mass?  Why should writers jump on board for crumbs (if anything) at first, until you have lots of users and good ad revenue?

I hope they figure these things out and succeed.

Walc

This is a new mobile app that gives directions and helps you find your way based on landmarks in the area, i.e. what you see. It’s an idea that makes so much sense, you wonder why it hasn’t been done before.

Founder Allison McGuire started by asking the audience to raise their hand if they have ever left a subway station, directions in hand, and still felt lost.  Most of the crowd responded affirmatively.

That is the need they address – very cool indeed.

Blockfeed

This app offers a breakthrough in local news delivery.  It uses fancy things like machine learning to develop a custom news stream based on the user’s location.

Blockfeed now works in the greater New York metro area, and will soon cover other parts of the country.  Local news outlets win too, as the app does not poach their content – it just shows a snippet, and directs traffic back to the publisher.

This is another one of those ideas that just makes so much sense – and it seems like they have the tech and team to deliver on the promise.

Empathetic Media

This won the prize for me in terms of the cool factor.

In dry terms, the company is a VR / AR (virtual and augmented) production studio.  The website says “We are a collective of journalists and technologists creating media experiences made to be explored across virtual and augmented reality. We design first-person immersive experiences to put you in the shoes of eyewitnesses  – and allow you to explore a story from multiple perspectives.”

Founder Dan Archer positioned their approach against 360 degree video, which offers a more passive experience. He said ‘With Empathetic, the story is the container…  you can move through it” by using their app and donning an Oculus Rift VR headset.

Dan shared examples.  One showed the scene from the Michael Brown shooting episode, which many of us got to know this well through all the news coverage.  With Empathetic’s simulation, you can virtually visit the scene and get multiple perspectives.

There is no question that this kind of technology will continue to grow in importance and be used more in journalism and other kinds of content development and marketing.  I am reminded of NY Times recent virtual reality push (they used Google Cardboard, and I don’t believe worked with Empathetic).

But it does seem time, labor and cost intensive right now – clearly a lot of work goes into each scene and story.  Hopefully some of the barriers will fall, and Empathetic and others in the space will grow and succeed – and will get more VR-enhanced stories.

 

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