Tag Archives: ER Accelerator

Startups in New York: If you know the drill, you can be spared the grilling

Investors at Ultra Light Startup
Investors at Ultra Light Startup

By Dennis Clemente

Startups in New York should know the drill by now. When you go from one tech meetup to another as you present your app or idea, you’re going to get different reactions and even some water-dousing realizations if you’re not prepared, because no tech meetups are alike. You could be largely entertaining in one, but questionable in another; “fundable” in one, need pivoting in another. The difference: Venture capitalists and/or investors are present in some meetups where in others, you’re just facing an audience who don’t care if you have a business model or not. The audience is there to have fun where VCs mean business. Bottom line: Investors want to know if you have a viable startup and if you do, you’re selling it to them properly.

Guest speakers-investors at the Ultra Light Startup last May 8 at the Microsoft Building near Times Square made sure they got their message across where the eight presenting startups may have not been so clear or forthcoming with theirs; it happens to the best startups when nerves can get in the way, as one did when he completely blanked out for 30 seconds in his two-minute allotted time.

The panel that may have intimidated that presenter consisted of Murat Aktihanoglu, ER Accelerator founder; Somak Chattopadhyay, managing partner at Armory Square Ventures; Brian Cohen, chairman at New York Angels; Pankaj Jain, venture partner at 500 Startups.

Each of the eight startups presented to the investors who then asked questions and gave an actionable feedback—a “what-a startup-needs-to–do-the-next-morning?” type of advice—after their two-minute presentation. They were Josh Stein of Adhere Tech; Zeb Dropkin of RentHackr (both having presented at NY Tech Meetup without a hitch); Emily Washkowitz of Shareswell; Charles Brun of Now In Store; Zach Goodman of Unlockable, Claire Cunningham of Lessonface; Rafael de Haro of Lifedots; and Juri Kaljundi of Weekdone.

Since many of these startups are in their early stages, let’s spare them the humiliation and just let you do the guesswork—as a way to determine your capacity to find out which one needs to pivot or reinvent itself, to put it mildly.

Here then are some “editorialized readings” into the questions and advice given by the investors—some brutally honest, another appeasing which compelled one investor to say to another, “You’re so nice,” as if there were no nice VCs.

• Testing the panel’s patience: It went from polite, “Messaging has to be clear.” (Read: What business are you really in?) to serious advice, “Choose another business” to frustration, “I still don’t understand your business”
• The name matters. For one highly personal product, the suggestion was to add a pronoun.
• Bottle pill product. Two investors suggested making it recycled, as the price of every new bottle could be a challenge. A serious question was asked, What if a handicapped bedridden person can’t use it and need help? Another question, Can you add social networking to it?
• On pain points. What is the pain point in the renting space? What is the incentive for the renter? Ask yourself, how many users do you need before you get to the landlord? Build user base first and tell brokers you will give them qualified leads. How are you acquiring these users? Another startup was also asked to answer what pain points he is addressing and why do consumers need him.
• Customer acquisition. Focus on it, or do cool tech. Of course, both would be better
• Pitch carefully because you’re in a crowded space (for investors’ ears)
• Find out the percentage of people downloading catalogs
• Focus on effective than pretty
• Think of Pinterest integration
• If it sells, it’s clever; if not, sell “cleverly.” Think of the tech behind it and the incentive for artists who may not be as receptive to the idea as normal people
• Allow changes… real-time (best advice of the night)
• How much monitoring can you actually do with the space constraints of a mobile phone? Consider pivoting app as report generation
• Think of privacy issues (especially In light of Snapchat’s current dilemma)
• Give first before taking. Give everyone here free subscription, with the investor motioning to the meetup audience.

The night’s winners (presenters) as voted by the audience: For the startup presentation, Shareswell won for its inspired idea: gifting stock inspired by the bridal registry concept. And what do you know; the founder is engaged to be married in a few weeks. The question we forgot to ask is, “Which came first, though: The startup idea or the upcoming nuptials?”

For most valuable tips, Somak, the investor labeled nice guy, won. But do nice guys invest first?

Locket locks it among presenters at Entrepreneurs’ Roundtable

locket

By Dennis Clemente

Last July 29, six tech startups led by Locket presented at the Entrepreneurs’ Roundtable meetup at Microsoft Building with ER Accelerator Murat Aktihanoglu and Allison Goldberg, managing director and VP at Time Warner Investments, providing some feedback along with 100 other people in attendance.

Locket co-founder Yunha Kim drew a big applause from the crowd who liked the simplicity of her idea—an Android app that delivers ads on your lock screen and pays you just for unlocking your phone. But how will it handle potential competition from the operating system it uses or the companies making these phones?

“You’ll be making money for doing the same thing you already do every day,” she assured.

Yunha sees a huge potential in this app, as people reportedly check their mobile phone 150 times a day.

How does it work? When you open your phone, you’ll see an ad. You swipe left to engage with an ad, claim a deal or watch a trailer, or swipe right to go straight to your phone like you always do; either way you get paid.

Yunha said she quit her job as an investment banker. Who wouldn’t when Locket has already gotten 11,000 users. It was launched in July 19 this year with 10 advertisers on board, including Sears and Dominoes. It has also partnered with the Boys & Girls Club.

The other presenters were Lady & Lara, Bluwired.com, Boutique Universities and MyDrobe who each presented for four minutes.

Lady & Lara is fashion-tech company, catering to pet parents who appreciate high-end fashion and like their pets to match their own image. It has reportedly partnered with fashion designers who wish to expand their product line with pet accessories.

Among the products it carries are collars and leashes, apparel, carriers, beds and pillows, jewelry, bowls, beauty products and treats.

Lady & Lara’s Eirini Veliou said she believes there is a market for luxury items for pets. The accessories industry is worth $70 billion and 60% are mass retailers. To spread the word about its website, she said she will make use of social media, public relations, online advertising. The blog section will also be developed.

The next presenter, Bluwired has been in every meetup in New York for the past weeks, talking about the tools and solutions they have to connect sensors, devices and people.

Bluwired.com is hoping to cash in on tech hardware which is now a 14.3 trillion industry.
Add Boutique Universities to the online learning industry. It offers a wide range of master classes and lessons, whether you’re looking to further your career or deepen your existing skills.

“It’s my first presentation in a meetup,” said Alberto Gomez, founder and CEO.

Julia Wetherell, CEO and co-founder of MyDrobe, said her site is a recommendation engine for the fashion world.

MyDrobe aims to bring a user’s existing wardrobe online to act as a virtual personal shopper and stylist and comes with a built-in fashion social network.

“We have a taste graph,” she said, which piqued our curiosity. She’s raising $600,000 and letting Goldberg of Time Warner Investments hear it.

Time Warner Investments invest in startups. “In the low range, we’ve invested about $4 million in a company and, in the high end, about $10 million,” she said.

“We like to meet people early so we can create strategies together,” she added.

The companies they have invested include Dynamic Signal, a sales and marketing channel and Joyus, an e-commerce site that looks for the best possible product for you.

ER Accelerator gives startup advice to 17 presenters on Pitch Night

By Dennis Clemente

New York’s tech startups are an interesting bunch. There are those in their advanced early stages who’ve had their Website or their app for a year or so and already have a solid structure or following in place. Then there’s New York Pitch Night which attracts even more new tech founders, earlier than most, say, those who have just launched their app. The group was designed that way. People attend and pitch for 60 seconds and an industry leader gives them startup advice from the ground up.

Last July 10, the pitch night proved to be much more interesting with Murat Aktihanoglu, founder and managing director of New York’s Entreprenus Roundation Accelerator, as its guest speaker. Folksy and friendly in his presentation, Aktihanoglu gave the 17 presenters and more than a hundred attendees invaluable advice on how to refine their ideas or get funded. He is also founder of Holoscape Inc.

“What is it like to go into business for yourself?” he asked the audience. “It’s like jumping from a plane without a parachute but making one while you’re going down.”

One after another, the 17 “pitchers” took to the stage to talk about their products or services in 60 seconds. Attendees are then asked to vote the pitch of the night.

Startoiletpaper.com clearly gives new meaning to place-based advertising where the Nuqaq app tells you about meetup-like events in your area. Jobsuitors, for its part, promise to match your personality with a job. Not an issue for the all-female Kookopa team who have shown its commitment to their business by quitting their jobs.

With over a hundred attendees hanging on his every word, Aktihanoglu addressed several basic issues, ranging from fundraising to pitching strategies. “Building relationships is the only way to raise funds, because investors back people, not deals. Just remember, you are pitching your personality.” To do this, he believes in getting warm introductions and keeping a database of investors.

Of course, you may not need to sell yourself as much if you approach friends and family, still comparatively easier but then he also knows you may have to deal with accelerators and angel investors when the time comes you will need to grow your business.

“Who knows what a convertible note means?” Aktihanoglu asked. That’s when you sell equity to a venture capitalist—not to be paid in cash; it’s a short-term raise for a startup to get, well, started. The typical terms: a 20 percent discount at a 6 percent interest for a cap of $2 million to $10 million.

Then there’s the price equity round wherein you sell a share of the company to an investor, usually with a lead and closing date. It’s for bigger fund-raisers of $500,000 and up. “Use this when you’re ready to expand,” he said. The typical terms for this are a pre-money valuation, preferred stock, a board seat, a lead investor with other participating investors.

The extensive business plan we have to come to know is passé to him. “Just give a one-page executive summary—with all the information a VC will need, plus both a pitch deck and email deck.”

Below are some more of Aktihanoglu’s startup tips:

What your pitch deck must have (in order): 1. Problem. 2. Your solution. 3. Business model/market size 4. Underlying magic/technology. 5. Marketing and sales strategy 6. Competition 7. Team. 8. Current status/milestones. 9. References

How to make your startup look good to a VC. “You have to emphasize your biggest assets, your team, previous successes, traction and technology. “Just don’t generalize and say we improve how business is done. Know your numbers: market size and growth. Show how big your company can get.”

In his ER Accelerator, he said he looks for the following when investing: a good team, 70 percent; market size, 20 percent and idea, 10 percent only “because ideas change all the time.”

3 big mistakes you can make while pitching. 1. When you don’t listen. 2. You refuse to acknowledge the competition. 3. You have implicit/explicit assumptions regarding the knowledge level of the audience.

Learn your risks. Identify and minimize your specific risks–product, market, technology, execution and timing risks. Understand how startups are valued. It’s key to know you have a scalable sales model.

Final thoughts. Understand how investors think; minimize their risks; raising money is just the beginning; pick an investor carefully, because there may be no divorce between an investor and a startup; look for a co-founder you’ve been with for a long time. And lastly, be humble and be open to advice.

The ER Accelerator reportedly offers 3 months of free office space, legal advice, workshops and accounting services with over 250 mentors. For more information on ER Accelerator, visit eranyc.com. For more information on the meetup Pitch Night, visit startuppitchnight.com or Pitchnight.tv