Three Commas dot Club

Every CEO should send out an Investor Relations / Company Update email on a regular basis. This is your one tool to be top of mind for investors / advisors / colleagues. Do it well and set a good foundation for future relations. Do it poorly and it’s not the end of the world, but you do miss a good opportunity.

After a few different tries, I’ve settled on the template below. It’s been getting good compliments for brevity and focus. I’ve found it to work for me, but I’d love to hear what your update newsletters look like!

GOALS: 

Send out twice a quarter.
— Shows we are planning/progressing in terms of “quarters”.
— I also have a corresponding “town hall” conference call I do with this email. That attendee list is tightly confined to investors & company advisors because we discuss revenues, fundraising, and roadmap in more detail.

K.I.S.S.
— Someone should be able to read and understand my update in 120 seconds or less.
— Anticipate what people want to know. For us, it’s “what did we do”, “what are we working on”, “what do we need help with”, “what trends are we seeing”. I translated that into the four headers you see.

Pay attention to headers, bold/color*, font size.
— This is just a habit from my film days. I always use bolding/background coloring/font size to format emails. If there’s something specific I need people to read, I will bold/color/underline/size up for the reader. That way, they can’t say they didn’t see it.

Ask the reader survey questions at the end.
— This is an opportunity to ask super smart people a quick survey.
— For people that respond, it’s a great conversation starter.
— It’s also a chance for them to give super quick feedback to you.

* In this screencap, the background coloring doesn’t show up. In my actual email, each of the headers are light yellow background and the market survey is light green background. 

This post is a post-mortem (or “lessons learned”) after going through the Capital Factory matching funds process. SocialMatterz entered the CF Accelerator in Jan. ’15, and we received our second Capital Factory Partner investment in June ’15. It was definitely not an easy process, but looking back, it was fairly methodical. I’m sure every company has their own path, but here are 10 things that I did or would recommend to any CF company trying to get matching funds.

(Quick Primer on Capital Factory’s process: You get two of the Accelerator Partners to invest $25K+ each into your company and then Capital Factory / Silverton Partners / Floodgate VC will match $100K. Ergo, $50K turns into $150K. 30% percent of Accelerator companies receive matching funds, and less than 3% of applicants are invited into the Accelerator.)

(In no particular order)

1) “The Hours” rule – Make sure you complete one task a day.

When you’re fundraising, it often seems like you’re running in place. You forego other aspects of the company and feel guilty about it. So I made up The Hours rule. This rule simply says that, each day, you will accomplish one thing, however big or small. “Today, I think I will buy the flowers myself.” Instantly, you feel better. 

2) “CF Partners are capitalistic” – What’s in it for them to invest in you?

This is a DUH statement, but it took me a while to grasp it…probably over 2-3 months of meeting Capital Factory Partners. Simply put, most investors don’t just invest in good business opportunities.  They invest in good business opportunities which are aligned with their self interests, whether personal/business/otherwise. Therefore, when you pitch an investor, you can’t just pitch how great your company is, you have to pitch why it’s great for them. Working backwards from that, do homework on all your investors. If you can’t answer why your company is great for them specifically, you’re at a significant disadvantage to those who can. 

3) “Ask for advice, get funding. Ask for funding, get advice” – self explanatory.

This is the number one rule companies mess up on. 

4) “Meet everyone” – Period.

You should be trying to meet every Capital Factory Partner at least once. Some are harder to pin down than others so it depends on your ingenuity to figure out how to meet them. —- This is because the CF Partner network is small and they know each other. If you make a good impression, they will often introduce you to others. A Partner intro. increases your chances dramatically. (Incidentally, I LOVE how Capital Factory offers a calendar where you can book Office Hours with Mentors and Partners. Plus, Mentors and Partners COME TO Capital Factory to meet you. During January to June, I set 254 appointments* with incredible CEOs, investors, mentors, and clients that can be attributed back to Capital Factory. Can you imagine setting those appointments on your own??? Just the travel time alone would cut the number in half. If you’re not taking advantage of CF Office Hours, you’re breaking Rule #4).  

* All set by the infamous bad-ass Lauren Cadell, who is awesome by the way. 

5) “Create a spreadsheet” – Fundraising is 99% sales, 1% luck.

Along with the previous point, track your meetings in a spreadsheet. Any good fundraiser will tell you that it’s a numbers game, just like sales. Keep it simple with definitive action items. Here’s mine when we got our second partner. I redacted all the names, but you can get an idea of the level of notes. 

6) “Find your advocate” – He’s a friend of ours.

Along with #4, you should try and find a CF Partner to be your advocate. This can be your first investor but doesn’t have to be. We met Bryan Menell who really believed in our idea and within a month he introduced us to our second Partner/Investor. 

7) “Who am I”? – How do people describe you to others?

At this stage, Partners are investing in you as well as in your company. Therefore, you should have an identifiable story and a lasting impression you give them. (This is why they’re always asking about your background and how you came up with this idea.) But, even more, they will tell their colleagues some adjective about you — “smart”, “experienced”, “ambitious”, “ass-hole”, “too nice”, etc. Know what people say about you and then hone in on that. 

8) “Get a Life” – 80/20 rule.

This is the work/life balance rule. Everyone describes it differently, but I’ll go with Google’s 80/20 split. Concentrate on your fundraising 80% of the time. Do something you like the other 20%. I started taking Wing-Chun kung fu, something that I did in college but hadn’t since. In my previous startup, I learned snowboarding. For others, this is family time. Whatever it is, take a mental break. Filling your day with busy work to look busy is not nearly as productive as creatively tackling a problem in 5 minutes or bringing your A-game to a meeting. You’ve got to stay fresh. 

9) “Four Legs of a Table” – How does a table stand with two wobbly legs?

A really smart advisor once described early stage fundraising to me as four legs of a table: team, prototype, market, traction. If you have 1 of the 4, the table falls over and you will not get funding. If you have 2 of the 4, the table falls over and you will not get funding. 3 of the 4, it’s shaky but ask enough people and you’ll get funding. If you have 4 out of 4, you’ll get funding every time. 

10) Mentor/Partner whiplash – aka Analysis paralysis sucks.

Listen to what everybody has to say, and then filter it for only what’s necessary to you at that time. This may be the hardest thing I can think of (other than doing pitch decks =). Every mentor/Partner/advisor is trying to help in good faith. Doesn’t mean their advice is always helpful. It’s up to you to translate their advice and communicate back to the team. This is REALLY hard. I cannot stress it enough.

That’s it! Hope this was helpful. When you read this post, think about Rule #10.

In our company, I’m the CEO but I also own the responsibilities of being Product Owner, Salesperson #1, Fundraiser, and Evangelist (i.e. PR/Marketing). We are in stealth mode so we don’t have an inbound/demand gen. marketer yet, nor additional sales/marketing personnel. We do have a Client Success Manager for our beta pilots. We are also SaaS SMB/Enterprise, and we will close deals with inside sales reps instead of being a highly transactional website close. Finally, we have a very strong engineering team with more engineering headcount than everything else combined. I am not one of those engineering headcount.

This post is about the tools/materials that were most important to me in launching our product. There were many other things that I wrote/edited/released/deleted, but in thinking back, these were most important to getting the most concise and detailed vision to the team. If I were to go back, I would just create these six documents and revise them over and over again.

          (in no particular order)

1) Financial Model – when you are bootstrapped and have no money in the bank, this is just busy work that you have to do for the investor deck. However, when you get some funding underneath you, this becomes your 100% go-to doc for planning. Since the CEO is the person who’s planning everything, this becomes the thing that you should live/breathe/have open everyday, as Simon Rakoff told me once. * But, again, if you have no cash in the bank, this is less important.

2) User Story – this was really important for our team to understand exactly what we’re building. Make it as detailed as you can, and get your entire team together to read this aloud periodically. I should’ve written mine a lot sooner than I did.

3) Functional Requirements Doc – this is more of an Engineering doc, but it translates the user story into requirements. Depending on the make-up of your team, this can be called many different things. Importantly, this has to track your user story. Any changes made there will impact things here.

4) Pitch Deck – this is the thing I struggle at most. Probably because the pitch deck is asking you to present your company with the most fine grained detail you can in the simplest way possible. And “fine grained detail” needs clarity of thought. Even if your deck is nothing more than an idea on the back of a napkin, you still need to convey on the napkin a simplistic and clear idea of why your company is valuable. With so many things changing all the time, the pitch deck aggregates all your changes at a high level for a 2-10 minute audience. *Incidentally, I’ve been thinking about the metaphor that the pitch deck is your go-to doc pre-funding and the financial model is your go-to doc post-funding. 

5) POC Mockups – for us, this “proof of concept” mockup was a UI representation of the product. You can enter a URL and get to it, but it wasn’t hooked up to any working data. We used Balsamiq to sketch out the basic rendering, and then just modified the UI itself for tweaks. If we needed to overhaul the UI, we went back to Balsamiq. Having a mockup in URL form let us get feedback from clients, advisors, investors, and focus groups. We even closed a few beta pilots just showing the UI.

6) A Whiteboard – the complete opposite of the pitch deck. Maybe you don’t have clarity of thought yet? Maybe shiny graphics aren’t your thing? Well, I would jump to the whiteboard in almost 90% of my meetings the past 6 months. It’s a great way to merge telling a story with some visual depiction of it. You’re not confined by anything because you are starting with a blank slate every time. People are naturally more engaged when they ask questions, and the white board is the perfect opportunity for you to have your audience ask you questions about your company.

What are things I left out that you used in creating/launching your product?

PS: This post doesn’t list the software applications (i.e. Google Docs, Trello, Slack, etc) that I used. I can write that in another post if people are interested. 

Here’s a list of blogs I read or have been reading the last half year:

1) TechCrunch — Everyone knows it, everyone reads it, you should too.

2) SaaStr — This blog has taught me in a short amount of time some very quick and dirty lessons on advanced SaaS metrics. I see it as SaaS Sales 101.

3) Benedict Evans – This guy writes like he’s one of the smartest guys in the world working at one of the biggest VC firms in the world. I read his stuff when I want to dream about problems I could be solving when I grow up (as an entrepreneur).

4) Andrew Chen – Andrew writes predominately about early stage problems or early stage market trends. I read his stuff to get a pulse on what I should be aware of right now as an early stage start up guy.

5) Medium – I used to read it a lot more than I do now. Six months ago, I would read Medium for insightful posts, and then just subscribe to those posters’ newsletters. Now, I just go straight to the bloggers.

6) Suster / Feld / Horowitz – These guys are icons in this world, but they don’t blog a lot, and their blogs cover a wide range of topics. If you’re just starting out, I would block out 4 or 5 hours one weekend and just explore all of their past blog posts. You’ll get caught up with that.

7) Industry specific newsletters – I’m also subscribed to a handful of newsletters key to my company or industry. For me, it is: Ad Age, HubSpot Sales Blog, Ad Exchanger, others.

In conclusion, these bloggers were key to my education, and didn’t take that long to consume. Check them out and let me know who you are reading.

FINALLY — this post by Marc Andreessen is a classic and is the only thing that matters.