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Today, we’re talking about pivots and your past work. When you’re pivoting don’t let past work govern your future.

Pivots are hard enough, so it’s potentially very limiting to only consider options that rely on the code or other assets you’ve already created. Instead, use this time to think big and broad. You may find the best opportunity is adjacent to your old product but give yourself the chance to consider other markets and even completely different products where you’d start from scratch.

This approach has worked well in the past for others — for example, Twitter started out as a podcasting company and Slack was a gaming company.


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Today, we’re talking about founder tactics that may work but your advisors have to push back on them.

Fundraising for a large check with minimal traction. Most founders will not be able to pull this off, and will waste a lot of time. You might be the 1 in 1000 but nobody should really recommend that path for you.

Same with pursuing partnerships for distribution. They rarely work out but I have a number of portfolios who grow using this tactic.

One of the hardest is the high salary employee dilemma — you probably shouldn’t pay someone $200k/year if you’re a small startup but I have seen a few companies make it work.

Your advisors aren’t living it and their advice, including mine, isn’t worth more than your instinct.


Today, we’re talking about the importance of growth to investors.

Most investors, whatever their thesis — can be swayed by growth. Your topline revenue or customer base inumbers are important but only because it they verifies your growth numbers are worthwhile — eg 30% growth/month is not impressive at $1k/month revenue but it is at $10k/month.

A startup with $1M in Annual revenue and minimal growth is not interesting to most investors at series A or even Seed. However, in today’s environment a company with $300k annual run rate, and sustained 20% month over month growth will be exciting to a lot of investors.

Growth is more important to investors than almost anything, plan accordingly.


Today, we’re talking about when to fire yourself. Founders have to wear many hats when getting a company started but that doesn’t mean you should keep doing everything forever.

For example — I firmly believe Founders should make the first sales of a product, but once you’re over $100k ARR you’ll probably need to hire someone to help with outreach or closing, just to maintain growth and you should find those people are much better at the role than you were — that’s ok — in fact that’s exactly what we need. …


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Founders often report being frustrated by the vague criteria VCs claim to use when deciding on whether or not to invest in their startup. Investment criteria goes beyond the investment process, which we made public for Sterling Road in 2018. However, what we’re actually looking for during our process has not been previously made public. Below, we have outlined our investment criteria in detail:

Initial Filter

Most connections we make with founders are done via email, ash@sterlingroad.com, either by introduction or direct outreach (LinkedIn is not a good way to reach out due to the spam). …


Today, we’re talking about keeping it simple when you’re seed fundraising.
Almost everybody goes through a rough patch when fundraising and it’s tempting to take investor feedback around your market, competition or similar issues and go straight down a deep research rabbit hole.

These kind of deep dive analyses don’t tend to sway investors. You should definitely have a document with answers to the common objections, but that’s obviously not the same as writing an 8 page white paper on your differentiatiors.

Sometimes a lead investor just won’t materialize. Rather than doing tons of research it’s usually better to go back to focusing on customers. All Investors will eventually say yes to traction.


Today, we’re talking about The reality of B2B sales at this time of year. Late November and December are traditionally slow months for b2b sales. If your pipeline isn’t moving, don’t beat yourself up about it too much.

You can set reasonable goals, follow up with your leads but don’t expect miraCles during the holiday season. Especially because standard sales tactics like creating scarcity won’t usually work at present.

If sales are slow now, use this time to build a great leads list so you can take advantage of people’s renewed focus in January.


Today, we’re talking about founders making negative comments at the start of their pitch. There are no qualifiers in fundraising. Starting with a negative absolutely will not help.

Over and over again, I’m in a meeting and a founder will start by disparaging their own pitch before they’ve even begun! “These slides still need a lot of work”, “I haven’t had a chance to practice much”, “I wanted to have customer X or Y signed before we met today”. Those kinds of comments make me expect a bad pitch, which is probably not a good place to start.

Instead — start strong. Thank the audience for their time, tell them how excited you are to share your progress and get their feedback. Your confidence and passion is enough to make anyone believe they were lucky to be in that meeting.


Today, we’re talking about where to find angel investors. Angel investors are an important part of most seed rounds, as they make decisions quickly, helping you build momentum. However, most founders raising a seed roundtend to focus on larger check writers because Micro VCs, Seed funds and larger vcs are just easier to find and reach. so here’s where to find angel investors, so you can build that momentum early.

1. People from your past: former bosses, investors at past employers, college professors & pastors. …


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When an investor passes, most of the time, their answer will be some derivative of “not now”. This means you should keep them updated, as they may want to be an investor in a later round. Here’s a template to keep those investors updated on your startup’s progress — with the hopes of having them invest later.

Update Template

Hi [Investor Name],

I hope all is well with you and family. [Personalized message]. Despite the pandemic, Acmecorp has seen some incredible growth in 2020:

  1. Over the last 6 months we’ve averaged 36% monthly growth and we’re approaching $300k ARR.
  2. We now have 12 customers with a strong pipeline for Q2 2021 (up from 6 last quarter). Here’s a recent case study from [Customer X] on how Acmecorp is changing their business [link to pdf/blog post]. …

About

Ash Rust

Pre-seed Investor. Email: ash@sterlingroad.com. B2B, US only. I work with founders for 3 months before investing. More info: http://SterlingRoad.com/process

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