Today we’re talking about “bridge” rounds.
Regardless of your situation, don’t use the phrase “bridge round” it just sounds terrible. Instead you can use terms like: seed extension, seed+ or post-seed.
Most startups will take 18 months to 3 years to reach repeatable revenue or user engagement and graduate from the seed stage. Given that wide range, it’s no surprise many companies will raise multiple times during their seed stage. This is normal, so there’s no need to label your round as if you missed some important deadline.
Today, we’re talking about FDA approval.
In my opinion, most healthcare startups should avoid seeking FDA approval early in their product development and avoid it altogether if possible. It’s high cost, unpredictable and causes startup killing delays.
Instead, if you want to get your product live sooner, there are some common tactics to help:
1. Change your classification, for example, rather than being a device that cures some serious leg ailment, instead label yourself as a consumer fitness tracker, focused on people with leg issues.
2. Change your use case, for example, it may take years to get approval for…
Today, we’re talking about how to take advice.
1. Remember that advice is not absolute truth. In fact, you should often try to solicit a range of different opinions, especially in tough situations. In my opinion, the real purpose of advice is to provide you with potential options to resolve a problem or ask you hard questions about a plan.
2. Experience. It’s important to check if the advice is based on significant experience. Unfortunately, not everybody will tell you when they don’t know something. Questions like — “how many times have you implemented that approach?” or “is this something…
Today, we’re talking about selling to multiple, different customer types or profiles.
When you’re first getting started with sales, you’re likely to generate interest from a variety of different customer profiles. Don’t be tempted to sell to them all at once. Selling the same product to different customer profiles is the same as selling different products.
For example, if you’re selling to both Small businesses and Enterprises, then even if the core product need is the same, these customers will have very different needs overall. You can expect wide variance in their customer support and service level expectations, you’ll have…
Today, we’re talking about how founders waste time.
1. The most common time waster is distribution partnerships. A lot of founders cultivate partnerships with larger businesses, hoping to gain access to their huge customer base. I understand the temptation to search for a silver bullet on distribution but I promise you it does not exist. You will not grow through a distribution partnership, you have to find another channel — referrals, outreach, content etc
2. The next most common is constantly meeting with investors. Ideally you want to compress the amount of time you spend fundraising into the shortest period possible and although VCs are more likely to invest in people they know, that will not overwhelm their desire for traction. You’ll be amazed at how fast a VC gets to know when you’re growing at 30%/month.
Today, we’re talking about the rare occasions where it might be a bad idea to pursue revenue. Most of the time you should be laser focused on generating revenue at a great margin. But there are several moments where it may not be the best strategy.
1. If you’re planning to fundraise soon, on the basis of user engagement it does not make sense to suddenly start pursuing revenue. Instead, stay focused on engagement. There are always ways to make money from lots of engaged users.
2. If a potential customer offers you a huge contract but you’ll have to…
Today, we’re talking about taking intros from investors who passed. I know this is really tempting but it’s just not worth it.
In most cases, if an investor just said “no” that’s the last person you want as your referral to another investor. Their pass is a strong negative signal. It’s kind of like smelling a plate of food and saying “this stinks — why don’t you eat it?”.
If you really can’t find a warm intro to a potential investor, a personalized, well-crafted, cold email is always better than an intro from someone who passed.
There are some exceptions…
We’re going to start publishing the diversity of the Sterling Road portfolio. The goal is to hold ourselves accountable, as there’s a lot of work to do in our industry and beyond.
Overall, 53% of our investments in Fund 2 have founders from underrepresented groups, representing ~65% of the total investment $$. There’s a lot more to be done, especially around providing opportunities for LatinX founders.
In my opinion, a big part of building a diverse portfolio, involves having a diverse investment team. A founder recently reminded me of the pattern on our team page. You can expect some big changes to the investment team with our new fund in 2022.
Today, we’re talking about a common misconception in fundraising. You don’t need to spend time building relationships with VCs, great traction will be enough to get them interested, when the time comes.
Spend your days focused on customers, rather than investor meetings, and when it’s time to fundraise you will find investors are much more excited about a fast growing company, vs one they’ve simply met a few times.
Of course, the reason why coaches like me exist is because a lot of companies cannot wait and have to raise immediately, in those scenarios — tactics matter. But if you can mimic the best fundraisers and time your raise to match up with great growth in your business, fundraising will be quick and easy — no relationship building required.
Your startup’s “Sales Playbook” records how you close a sale from start to finish. You can use the Sales Playbook to onboard new salespeople and improve efficiency — by ensuring the current best practices are being executed at each step along the way. In general, the founders should write the first version of the Sales Playbook, as they should conduct the first sales. Here are the elements of a strong Sales Playbook:
What: Begin with an overview of your company including the “1 Liner” and an introductory paragraph from a customer perspective. …