I went to an excellent talk at Stanford on Tuesday. The speaker was Tom Fountain from Mayfield. Tom talked about the state of venture capital investments and gave advice on how to prepare an executive summary (slides here).
He talked about the three pillars as blueprints for success: people, market and product.
- People - The entrepreneurs should have some unique insights about the problem they are addressing. The best ideas tend to be drawn from the founders' own professional experience.
- Market - It should be a large and rapidly growing me.
- Product - it should be a painkiller, not just a vitamin.
He further emphasized the importance to talk to customers. For enterprise products, talk to 10 to 20 customers. For consumer products, talk to as many people as you can. Launch the product and build the initial audience.
The logical flow for securing funding for your startup is as follows:
- Develop a business plan
- Prepare the investor presentation
- Draft an executive summary - this is a sales tool to pique interests. It should be 1-2 pages and tell a story.
The investor presentation should be about 15-20 slides.
- Vision statement - start with "what is it that you do?"
- Executive team
- Problem description
- Product solution
- Go to market plan
- Competitive landscape
- Operating plan
- Financial details
- Step 1: contact VC (day 1)
- Step 2: initial presentation (day 21)
- Step 3: due diligence (up to day 60)
- Step 4: sign term sheet (day 60)
- Step 5: close financing (day 90)
Overall, this was a great summary of the current tech market and VC funding. I was excited to hear that this is a great time to start up a technology company.
