Friday, February 15, 2008

Results of Pitch at Deloitte Tech Venture Center

Bananas are the hottest thing, you should invest

I took my hacking, raspy self to Waltham today and pitched at an "investor roundtable" hosted by Deloitte. Launchpad and Atlas were there, and some other folks. DFJ and Spark were supposed to be there but I don't believe they were.

Summary: they conceded that they weren't part of the target market. I also noticed that they weren't too well acquainted with the market space. I am routinely baffled by how little people understand online advertising. Meanwhile, the guy who thought he knew the space suggested (inadvertantly) that I instead build another delicious - which is a deeply troubling suggestion on a variety of levels.

Anyway, to resume the summary: I think they weren't 100% understanding what Linkspank is. And how can you invest in something you don't understand, right? Agreed. They suggested that I go look for a younger angel investor, which I think is a good call. (The investment I'm looking for is $200-500k, depending on timing and other factors, so it's borderline between angel and group of angels or institutional.)

Internet Site = Must Do Demo

The thing I puzzled over most was whether to include a demo in the pitch. It's the Google way of doing things and I was always sold on that. But I was dissuaded from the idea over the last week, by the fact that my practice pitch listeners didn't want to hear the pitch.

In retrospect, I think it's absolutely true - none of these guys want to see a demo. But it's laziness on their part not to want to see one, and it should be my job to force them to see it. Considering investing in a consumer Internet business without seeing the site in action is like considering investing in an ice cream shop without tasting the ice cream. If you wanna do it, go ahead, but seriously.

So, I think in the future I will insist on a demo, even if this means requiring a presentation time of 30 min (without questions). I know that's longer than the norm, but it's fine because I don't want to do business with anyone who won't take a look at the product.

The need for a demo was underscored by the fact that Linkspank's on-paper stats are astonishing, and they still had trouble winning the group over. With no PR, we've grown to 1300+ users. 67% are active in a 2 month period, with 8+ invitations to join the spank sent out per user. The average session on the site in December was 3.7 hours. The business makes sense on paper. There's not more much I could have told them statistically to convince them without having already had a thriving business :-).

Next Steps

The only part of the outcome I disliked was the idea that no one on the East Coast would have the vision to invest in this idea. I was hoping to get outside the box a little by putting Linkspank here instead of there. But (so the story goes), while there are plenty of techie and visionary people here in Cambridge, they aren't angel investors but rather poor kids.

At any rate, next steps are to look a little more globally, and reach out to angel types and get their advice. It will be fun, because I love talking about the business and I'll get some more meaningful interaction with cool people. And I'll insist on the demo :-).