Tagged: series a
Day 15 of 45: Rejection
7.46am. Jet lagged. Have been on the road for a couple of days. Will fill in the blanks latter perhaps. Had planned on doing that now, but just got an email of rejection in my inbox from the guy and industry juggernaut I offered to sell the company to last week.
“we can’t complete a purchase of this type right now as we are etc etc etc”
All I can say is fuckity-fuck-fuck-fuck…bummer…gut kicked… ugh… ahhh
Please forgive my language.
It’s a bit like a girl saying she’s just not that into you. It so hard to take.
This was clearly the best show in town, and could not avoid spending much of the last week thinking about the future possibilities. I was going to put a down payment on a small house. I was going to give some kick back to important people. Everybody was going to be happy. I was going to get a personal trainer.
Shaking my head.
So the questions are – Did we offer the company at a price that was too high? A couple of our investors had advised to ask for a highish price that my gut told me was too high. A couple of advisors told me to go low, and get out of jail. In the end I think we went mid – high. It could have been a factor. It’s hard to tell.
Did I jinx it somehow? I’m not one for superstitions, but did I tell too many friends? Did I write about it too much? I know this is nonsense… but you do think about that. Does putting out information on any level cause a train reaction of energy that comes full circle in the form of a big NO.
Nevertheless I wrote back to this guy with an email that stated how he needed to view it. Beating a dead horse? Perhaps. They say you can never make a girl fall in love with you. Is the same true in business?
Ok, off to another meeting. Blanks to be filled in later.
John Startup
Day 14 of 45: Gazillions Of Buttons
6.31pm. Pretty tired. Heading to San Fran at the crack of dawn. Need to pack. Need to pick up laundry. I hate airports. I hate flying. Moan. Moan. Moan.
–
Last night I met one of the hippest companies on the planet who have experienced humungus success in recent times . Their space was lush.
When I got in I had to go through the usual procedure of trying to hook my laptop to their presentation screen. This procedure never works simply. There is always a process whereby people stand up and begin fiddling with wires and multiple remotes with gazillions of buttons. You can meet the biggest companies in the world of tech, but somehow they can’t figure out how to use their own TVs.
The guy we were meeting sat back strangely in his big leather chair as I did my presentation standing up talking down to him.
He basically told me in a round about way that his company is abandoning what made it great… to do everything but that thing that made it great in the first place. Does that make sense? No matter how big I pitched what we do, the conversation kept coming back to numbers. Ugh.
This is a great company but it’s hard not to see everyone as a kind of enemy just now.
I’ll show them!
–
My first meeting today was with a former juggernaut of the web. They are currently trying to reclaim their former glory. I think my company could help add a degree of credibility to that effort.
Was a decent conversation. Went on for about an hour. He asked a ton of questions, which I liked. It’s easy to ask questions. It shows your curious. Tip… even if your not interested in something, ask questions; it’s a way of being polite.
After I did my big spiel, and he asked all his questions, he proceeded to tell us the state of the industry (loaded with a ton of negatives) for the next 20 minutes. All stuff we knew.
So yeaaaaah. Again, it was fine, but don’t think anything will come of it. You never know.
–
And finally, just back from another meeting. It was more of a biz dev meeting, but I tried to spike their interest in what we were doing.
“Yeah, we should try to work together. Maybe…”
Zzzzzzzzzz
–
I’m tired of meeting people who are in such a great position in life, but look thoroughly bored with what they are doing. People who seem to have seen everything. It looks like nothing would excite them.
And the money thing, endless conversations about money. I mean there has to be more to life than that pursuit. Right? Anybody?
I’ve done this rant before.
Over and out.
John Startup
Day 13 of 45: Smug and Soulless VCs
10.04am. I can’t believe I have made an offer to sell the company. I have worked on this for 8 years! Selling it is a big deal. I’m not sure it’s even a good idea. Perhaps I’d rather go broke and it should wind down than sell it on.
On the other hand, maybe this is just a natural development. Like a child growing up and leaving home.
We finally came to a valuation price that is a bit high, but fuck it. Let’s see what they say. If they said yes… it would be incredible (realizing I’m contradicting myself already). But they could easily say no. They might not even be interested. Time will tell, and we’ll know very soon.
–
On Friday we had another presentation with a huge global fund. I was told by my side kick that it was my best presentation to date. I was very aggressive. I spoke the company up on every level. I had an answer for everything.
But these guys were smug. It annoyed me.
Firstly, they came along late. I hate that. No excuse not to be punctual. It’s just rude.
Secondly the whole time I was making my wizzy Prezi presentation, the main guy we were speaking to, spent most of his time with his head down tapping on his IPad.
We had a pretty good idea these guys were not interested before we went in and hence why I was aggressive in my presentation style. I wanted to grab their attention. But even still, they could have been polite, showed interest for 20 minutes, and made a suggestion or two to us.
One thing I’ve learned in recent years, is that whenever anyone shows you something, or comes looking for advice – be nice to them, give them your thoughts. Give suggestions. Perhaps even suggest another person for them to meet. It’s good karma.
But these people were utterly soulless and smug. I feel sorry for them. Who needs money which such attitudes?
Big week on the cards.
John Startup
Day 12 of 45: Tired and Emotional
10.13am. I know my calendar is a bit off now, and I’m not writing with the regularity I wanted… but yesterday was a write off for me based on the night prior.
Before I go on, I think it’s a good idea to give my early stage investors/ advisors names… as it will help you make sense of the story.
So here goes –
- Martin Landau – Elder, grey haired, wiley, no b/s investor.
- Hamptons Bill – Our most hands on investor. Questions everything. Clean cut. Everything is ‘swell.’
- Jeffrey – Highly respected in our field. He’s like the father you ask permission to marry his daughter. Astute, but can never get his time.
- Karen – Rock star investor. She’s supportive and tell’s me to do what I want.
- Eddie Vedder – Advisor in LA (not THE Eddie Vedder)
Might add to this list over time.
–
Anyway, so the night before last, I rang an advisor friend – Eddie Vedder in LA to get his sense on what our valuation might be.
Eddie – “Well dude, I mean what are they paying for, what are they buying? If this company doesn’t acquire it, who else will?”
John Startup ”Well eh….”
Eddie – “How much money have you made with it so far?”
John Startup – “Well nothing”
Eddie – “If this company are interested in acquiring I would do anything to make it happen.”
John Startup – “Hamptons Bill is saying 5-10 million.”
Eddie – “That’s ridiculous where is he getting that from?”
John Startup – “Well eh….”
Eddie – “This is your big bro talking. Take something lower. Put some money in your pocket… and take an executive job with them. You’ll be on a big salary.”
John Startup – “Ok, so your saying 3/4 or 5?”
Eddie – “It’s complicated man”.
John Startup – “Well what does you gut say?”.
Eddie – “Look man, I got to go”.
–
After that it was off to an annual cocktail gathering held by Martin Landau. I decided to tell Martin that we were asked to propose a price. When I asked him what he thought… he said – “Whatever makes you happy”.
His associate on the other hand said 15-20 million.
The night rambled out of control after that. We mooched in on Martin Landaus dinner, drank too much wine, and ended up singing karaoke till late… very very late. There may be even video evidence.
Hence yesterday, I was extremely tired and emotional.
Today we hope to get our offer over to the potential buyer.
Gulp.
John Startup
Day 11 of 45: Greed Is Good
1.46pm. So we have feedback on our massive meeting from an inside source close to the main man. We asked our ‘insider’ to investigate his pulse for it. His feedback was that we should “Propose a price.”
Ok. Deep breath. Let’s not get ahead of ourselves.
Questions –
What is our price? What would an acquisition mean? What would the future look like?
I hate asking these questions, because until money is in the bank, nothing is guaranteed. Even if we were to get a good offer, legals can have the plug pulled at any moment. It’s important to stay calm.
But I can’t lie; it’s encouraging at least. In someways I think I would be happy for the company to fall now having just heard the words “Propose a Price.” It’s funny how the mind works. I get a sense of achievement in just hearing that phrase.
So what is our price? There is already conjecture on this point. I have made a few calls to advisors –
“1 million”
“I’d say between 5-10.”
“15 million, no questions.”
If I’m being honest, I’m unfortunately not a greedy person (and it helps to be in business). I was asked by a friend… “What do you want from this? Do you want to get rich?.” I just want the company to evolve. I want the company to grow up. I want the company to survive. I want to look after all the people that have been involved to date. And even though I have worked on this non stop for years I strangely care about myself the least. Don’t get me wrong, I want to get by, but I don’t have many desires past that.
There is no way I would be leaving the company. I would need to continue running it, for at least 2/3 years. It’s just the nature of what we do. I would need to make sure there was the right budget in place to make that work. Could that budget be part of a deal?
I like the idea of wiping out our current early stage investors off the table (because there are too many cooks in the kitchen right now).
So I would be happy with a 3 million sale… and a commitment to invest X amount over 3 years. I would like a stake in the company going forward too. I dunno… something like that.
What do you think?
John Startup
Day 10 of 45: The Big Meeting
11.42pm. Today was the day of my big meeting with an industry legend from one of the most well recognized companies in the world. In my field this is a man to meet. This is a man I would welcome as an investor.
Ok, let me back track a bit and put this into honest context. The company in question has been a juggernaut over the last 30/40 years. In more recent times it has lost quite a bit of its relevance and luster as it has pursued more lucrative paths. Despite that, it is probably more successful now that it ever was before. It’s a bit paradoxical.
There might have been plenty of times in the past few years when the idea of selling out to this company would have been seen as very uncool; a bit like selling your soul to the devil. This un-named company has gone from being important, to being the epitome of commercialistic greed.
But as my time is running out, and I look around, there are not many other companies that represent such a good fit. I think we could give them a good amount of credibility. And through them, our profile and opportunities would be lifted immeasurably. Most pressing, we need their capital to survive.
Prior to the meeting today, I had a call with some other advisors on how best to conduct it. There is talk that we could be a good low cost acquisition for this goliath. I would not be against that right now, but what was I supposed to say? “Here’s my company. It’s cool. Do you want to buy it?”. That’s not standard operating procedure. You can’t look needy. You can’t look desperate. You need to be like Frost, coaxing an apology out of Nixon. (I don’t know where these analogies come from). But we have the pressure of a ticking watch here…. we are getting desperate!
Anyway, meeting time came about. We checked in at the front desk. We showed our IDs, got a sticker and up we went to the 35th floor. The space was open, and shiny, and bright, and colorful.
We were asked to wait in reception. As my colleague sat down, I walked back and forth surveying the pictures on the wall. I tried to take them in, but lets face it… I was nervy.
Finally we were invited into the main mans office. What a view!
The meeting went well. He asked lots of questions. We got on fine. I always try be relaxed and humorous… striking a good balance is important, but tough. Sometimes I try to go for the jugular too much. Throwing out different selling points when I feel one is not enough.
He seemed genuinely interested. But he had a demeanor that is hard to read. That probably explains why he’s in his job.
The meeting ended with him stating, “Write me a one pager on what your looking for, and how we could work together.”
And so that was that.
The moment we left, myself and my colleague started dissecting. I felt it went ok. 3 out of 5. My colleague said I should write back to him and offer him the company for a million bucks. I said we’d need 4 million. He said not a chance. We’re not worth it.
When we got back to the office, I called our current investor to tell him how the meeting went and for advice. “I need to know when asked what the valuation on the company is… what’s the exact amount I am asking for?”
“5 to 10 million I think” he responded.
Bloody hell. 30 days to go. It will be some month if that happens.
I need sleep.
John Startup
Day 8 of 45: Martin Landau, our investor
6.13pm. Exhausted. Mentally and physically drained.
Just lost an epic five setter in ping pong against a guy in my office who never beats me. I was defeated on the floor like McEnroe in the 70s (or was that the 80s?).
I’m home for a planned quiet Friday night in, but just remembered there is a gynormous Holloween party scheduled to rock my building this evening. Any night but tonight I would join in.
–
I had my rehearsal presentation this morning with one of our existing investors using a presentation I’ve never even presented before. Clever eh. He thought it looked good, but wanted to see more.
This particular investor we’ll call ‘Martin’ as he always reminds me of the actor Martin Landau. He’s older, and wiser… he’s wily… and he calls a spade a spade. He’s highly respected and astute. He sees through bullshit and gets to the point. In one way its refreshing because investors are prone to B/S too… in another was it’s tough… as he’s hard to sugar coat things with.
“What have you been doing for the last few months, just sitting on your hands?” asked Martin.
His sidekick said he wanted to see much more in the presentation, such as biographies of employees, social media stats, press quotes etc. This is totally opposite to advice we got from another investor who said they wanted to see less. 10 slides. That’s it.
I’m convinced there is no real science to a presentation. You need to tell the story in an exciting, passionate, clear way. If you can add a bit of wit I always feel that helps. But even then the person in front of you needs to be on your pulse or you have no hope.
Sometimes it’s so hard to try get them to just wake up in that moment. “We’ve discovered how to make planes fly on water!”… No budge. “Did you hear me, this will revolutionize aviation.” Nothing. “We’ll make jazillions!… Hello… Hellooooo.” They have heard so much before, that in some ways they can be going through the motions.
–
I’m being harsh on our existing investor though. He is constructive. He left the room and slagged off my appearance. I liked that. It showed his humor and relaxes the tone.
His sidekick meanwhile took out his laptop and proceeded to give us a range of email introductions to other possible investors. So we couldn’t have asked for more.
Although I did subtly broach the subject of a bridge round of financing. I don’t know where that came from.
–
So with the weekend here, Monday is a big day. I have 3 meetings – one with an industry legend (who I want to invest), one meeting thats a warm up to that meeting with two of our existing investors, and another ‘rehearsal’ presentation.
Time is running out, but things are happening.
John Startup
Day 7 of 45: Too tired to go on
1.32am. Been up all evening trying to finish this Prezi presentation for my rehearsal presentation tomorrow. Fuck it. Can’t go on. Body tired. Must sleep. Might squeeze some touches in in the morning.
I haven’t even rehearsed what I’m going to say. Decent visuals are only half the battle.
–
Doing this presentation, it gave me the opportunity to look at our statistics again in a different light. Since the beginning of the year to now, and comparing them to the same period last year – our web traffic is up 60%. Our page views are up 70%. It represents some kind of progress.
Now to sell the bloody thing.
Bed.
John Startup
Day 4 of 45: Rehearsal for investors
6.14pm. Looking at the computer screen. Seeking divine inspiration. It’s not forth-coming today. Have felt slow and lethargic. There’s probably more that I can be doing. But what is it? I feel like going on a beer (and whiskey) bender, and moaning in the ear of some poor friend. But I’ve been good of late… and it would write off the whole of tomorrow.
And I need to be around tomorrow incase divine inspiration should arrive. (Hello… divinity… where are you? )
–
One of our current investors has asked me and my sidekick to come in later in the week and walk them through our pitch and our deck. We have identified a list of possible VC’s who might fund our Series A, and we are hoping our current investors can give necessary introductions. But the process of going in and giving a run through fills me with insecurity. Particularly with this investor who is old-school. This is not the Kumbaya investor who just wants to create something great. He see’s straight through the B/S.
He is looking for something black and white with a huge scalable vision. He also wants proof in the pudding based on what we have achieved in the last year. Have we done enough to warrant a next round? Certainly not in my opinion. This is where I need to fill the gaps with believable B/S. I need my best acting abilities and charm offensive switched on.
I’m always best when I can give a passion play. But it’s very hard to give a passion play in a rehearsal. I need the cameras rolling.
This investor is only trying to help… but at the same time I’m intimidated. He’s closer to it. He can see through it. He’s tough to impress.
–
Strikes me that we will need another deck. The deck we currently have is a good deck for someone to flick through alone. I feel we need a better deck presentation that I can talk people through. So I need to cobble that together in short time. Have put off doing that all day. My creative brain is running very low.
On a positive note, I do see a slight opportunity here to go in and bowl our current investor away. Maybe I can give them no choice but to put his hand in his pocket again. Thats undoubtedly the way I should be looking at it. I need more of that vigor. Perhaps I’m just out of gas. Maybe the salesman in me has ran out of juice to keep selling this.
The worse possibility is that I’m just too lazy to get my mind through the obstacle coarse. Mental energy lacking…
–
Ok, enough of this indulgent internal monologue.
Positive thinking.
Off to make… another deck.
(Hmmmm beer….)
John Startup
Day 2 of 45: What’s our Series A valuation?
It’s 7:12pm. I have a large bottle of beer by my side. Absurdly large actually.
I check my email and I have an email response from an investor I reached out to who recently invested in a company in a similar field to the one we are in. That in itself is a positive. Responses of any kind are positive.
He’s asking do I have any more info? Do I have a deck? And whats our Series A valuation?
–
So at this point I think it’s important to make clear that just over a year ago we did actually raise a round of investment. To be honest I felt it was a miracle when we raised that. I thought THAT was our ‘Series A’. It turns out, that was merely an early stage investment or a ‘Series Seed round.’
When we raised that amount one of our investors said to me “We don’t care how you spend this money, or how fast. Do what you have to do to get this to the next level. Then we’ll talk about the next round of investment.” So thats been the mission I’ve been on for the last year. It’s felt like running on a treadmill that someone keeps turning the speed up on, as I’ve been getting more and more exhausted.
I tell you this (and possibly kill a degree of your empathy), because I don’t know off the top of my head what our Series A valuation is. It got to such a point last year, with pressures so high, that it was a case of just signing contracts. Of coarse not knowing exactly what I was signing. And in a desperate bid to stop the legals doing what they were doing.
I exaggerate a bit. I have an idea of our valuation. But I’m by no means certain of it. My memory is telling me… I remember somebody… saying something to me… about it… I think…
Rookie mistakes.
Not inspiring I know.
–
As for our deck, I feel like I have been doing decks for years now.
We have been working on our current deck for a couple of months. We got opinion about it from all our current investors. Everyone has a different view on it.
I think it could be better. I think it could be worse. Taking others opinions on board has killed a degree of its zest. But overall I am happy with it. At a certain point you gotta say fuck it. This is it. You can change things endlessly and never get anywhere.
–
Thanks for all the positive response to yesterdays post. Clearly I’m not alone in my stress and anxiety.
I’m off to find out what our Series A valuation is. And get another beer.
John Startup
The Secret Startup 