Bullet points about fundraising for Bitcoin startups

I was looking through my email archive today and came across an email related to Bitcoin startups that I sent to a friend back in July.  Most of the points are still relevant today.

Bitcoin Startups! These Are The Trends We See by Adam Draper

  • Through the first half of 2014, an estimated $240 million in funding has gone into the cryptocurrency space, up from $74 million last year — most of which has gone into exchanges and wallet companies.
  • Number of Mining applications has stayed flat
  • Gambling started strong but has wavered

A Few Reasons Your Bitcoin Startup Might Fail by Sean Percival

  • Bad Branding, do not use “bit,” “block” or “coin” in your name — often that it’s causing consumer (and investor) confusion
  • Solving Problems Too Far Downfield — it’s certainly possible to be too early on many business ideas, especially if your idea is going to take immediate scale to be sustainable
  • Your Office Is An Airport — conference overload, travelling too much and not building the product and business; all that money you spend on travel is money you’re not spending on your company
  • IPO Schemes and Fundraising Fails — we’ve seen a few new approaches to fundraising, including IPO schemes that leverage crypto technology in some way. I would say this is the biggest red flag that the business or idea is doomed to fail
  • Your best plan of action is to launch an MVP (minimum viable product), raise an advisory round of $100K–$500K, and be able to sustain yourself for the next 12–18 months.

False Positives, False Negatives, and Reading Decks in Advance by Charles Hudson

  • at SoftTech we invest primarily in seed stage companies – we are investing in the team and the opportunity, not just what’s in the presentation.
  • reading decks in advance creates more false negatives than it saves false positives
  • Poorly conceived idea – I find that a simple paragraph gives me enough context to figure out whether the basic market opportunity and company idea sounds interesting. If the paragraph is well-written and compelling, I find the deck tends to be so as well. When I struggle to get the big idea from the intro paragraph, I’ll usually just sent a follow-up email to ask more. Still beats looking at slides.
  • Decks do not communicate personal connection and energy – I find that even the most well-crafted deck or presentation does not tell me anything about how I’ll feel when the entrepreneur or team comes in to present. I value the opportunity to get a sense for the energy and personality of the team when they present live.

Why did Investor X not look through the entire deck, the info is right there in font 8 on slide 27?!?!

Put simply due to time constraints this may not be possible.  I don’t have the link, but I recall Jeremy Liew at Lightspeed Venture Partners says he looks through 150 presentations/decks (not including executive summaries) for each investment.  In my own anecdotal experience, based on pitches I have seen over the past year I would probably say to keep it simple to get the point across in less than 15 slides because many investors do not have the time to look through every detail on the first round of a pitch (some, as Charles suggested above, may not even look at it at all).

Startups going through accelerators and incubators such as Plug and Play and 500 Startups may only have as little as 3 minutes to pitch during Demo Day.  So unfortunately for geeks, you would likely need to remove all the techno mumbo jumbo even if your company is say, an analytics startup.  Talk to your mentors to find out more on catering your marketing message.

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