Jun 6, 2011

Raise Big or Get Bought

A great pitch is all about telling a great story well. Recently, a number of entrepreneurs have asked me to help them with their pitch, business strategy, and market positioning. An avid short story writer since a young age, there are few things I enjoy more than helping technology entrepreneurs tell their stories. It’s even more fun when that coincides with a financing or liquidity event.

As an investor, I’ve seen hundreds of pitches. As an entrepreneur, I’ve put together more than a few myself. I never thought that might be an avocation, however, until I was reminded by an entrepreneur friend of mine, “You basically wrote our Series B pitch in 15 minutes on the whiteboard.” He raised eight figures the next week. Then, I was meeting with the founder of a highly in-demand company several weeks ago. “Help me build my pitch. It’s what you do.”

Tech, as I wrote in response to a WSJ article in January, is hot again, and it’s likely that we have about three more good years ahead of us. What happens after that is anyone’s guess. That means raise big now with the implied goal of getting public, position to get bought, or plan on digging in for seven to 10 years through another cycle.

Raise big. To raise big dollars on a big valuation, you have to be hot. In a momentum market like the one we’re in, hot comes down to massive reach, massive revenue, or massive disruption.

You can also, of course, raise money on the promise of massive disruption. If you’re doing that, you need a catalyst. Something that wasn’t here a few years ago, that enables you to disrupt massively and quickly. iPads, location-aware smart phones, and pervasive social graphs are all good examples.

Get bought. To get bought, you have to be visible. As Steve Blank said, in the new bubble, “you need to be everywhere and look larger than life.” Of course, you also need to be in an area buyers care about. Corp dev execs flush with cash or high valuations are making two kinds of buys right now: talent and traction.

It’s not enough to have a great story alone or to be a great story teller. You have to have a great story and tell it well. Do that, and whether you want to raise big or get bought, you’ll accomplish your goal.

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