We all know that there's a lot of dumb money in China and in the ASEAN region in general. In the Valley there's a name that I won't mention here to use to refer to this kind of dumb money—but what I'll say about it is, if you take dumb money, you often get what you pay for: That is to say, you end up with a rep that basically says, "You're only good enough to raise with those kinds of folks."
Oh, and by the way, dumb money doesn't just come from Mainland China; it comes from hedge funds that are out of the loop without any semblance of empathy or basic understanding of the niches they want to invest in; all they bring to the table is capital to deploy and a book-quota to meet—same is the case with some of the mutual funds that've been poking around the Valley.
But thankfully, though Joe wasn't too popular growing up, being an introvert tinkerer and hacker growing up in Atherton, California— although he was class president, and won essay contests, among other things—, he's kept enough of the friends that matter that, coincidentally, were actually quite like him— introverted, hackers and tinkerers, multiple-graduate degree earners, academics, scientific, and a part of the singularity movement long before the Singularity University was even conceptualized. [Joe's mother was rather disturbed by the fridge in his bedroom that was dedicated to supplements that Joe believed would, over the course of a period, would slowly alter the course of this genetic evolution.]
These friends, Joe's tapped, to raise funds and acquire mentors and social network support for many of the startups he's invested in, in the Philippines since he's started this measly venture office only a year ago.
But he can't just approach 'em like, "Homie, invest in this company 'cause I did. Invest in this company 'cause I said so." Or, 'Invest in this company 'cause I saved yo' ass that one time." This is, after all, business. And in the Valley, metrics are on a whole other level.
So, in the vain of Jerry Maguire, Joe begs of his incubating startups: "Help me, help you. Help me! Help you!"
In our short time in working in this high school environment that is the "startup scene" in the Philippines—where oligarchs pin pion employees against each other like well trained fighters armed with Ivy League degrees—we've realized that the real game is to not participate in this game of research and development for the oligarchs, and to serve as their somewhat outsourced resource for innovation, but to use the Philippines as a marketing testing ground for validation.
Case in point—I'm incubating many and consulting for numerous medical devices that have, for all intents and purposes, "grown up" in the Philippines. Why here? Obviously, to skirt overbearing regulation in the States. But they're here to prove their efficacy, and in two medical device's cases, they're winning FDA approval, with consultants and angel investors from Chicago in the wings ready to fast track these devices for FDA approval in the States, once certain thresholds are achieved.
But how did we get there with those devices? Basically—if you want to really boil it down and distill it down to a single word, it's "communication." You need to communicate. More importantly, you need to relay information. Transparency.
Don't just datadump stuff into our offices secure folders for us to make sense of. At very least package the stuff a little bit. We're on the horn constantly with capitalists. Joe's generously volunteered yet even more resources, allocating contact center agents to do the client relations, social engineering— establishing new neural branches into the ever evolving greater organism that is the collective fundraising brain of the Bay Area.
So we have hold private conference calls with select capitalists in the Bay that are friendly with each other that we feel would want to participate in an investment together on a daily basis. This is where we need our incubatees and investees to help us out: We need you to provide the investor marketing collaterals that would help draw these folks in and get them interested at the outset—like a bombshell beauty walking into a room.
Where to start? Review 500 Startup's latest batch of Demo Day pitches. These pitches are specifically designed to whet the appetites of professional angel investors and big corporate VC offices. Here are some of our favorites:
- Opportunity slide: Cross Border Payments Slide: $40 Billion—none of this TAM bullshit that we see so often in so many decks. This is a real opportunity proven by their traction slide.
- Traction slide: 46% MoM (month over month)
- Traction slide #2: Signed 7 property developers, with $900 in cross-border transactions captive to Qwikwire.
- Margin slide: 5.4% per transaction
- Customer Feedback Slide: customer performance, Qwikwire decreased client delinquencies by 50% (huge!)
- Notice how most of these 500 Startup pitches are only a handful of slides long.
- Notice how they get to traction within the first 3 slides—often the first or second slide. In the case of this jock from Parkbench, he straightup listed his traction and rev in his first slide, like "Here it is bitches. You want some?" Remember, "Bombshell beauty." Irresistible.
- Notice how they tweak the perspective of their financials to look like a bombshell beauty. Note Sidelineswap's decision to display $2MM in GMV, instead of stating say, net revenue. [Bombshell beauties don't just wake up, get out of bed, and head to the party. They get dressed nice; they get their hair done, etc. —best foot forward. Best perspective. Best stance.]
- MoM is critical. And you've gotta frame it the right way. Percentages. Grosses. Units. Absolute dollar amounts. Whatever looks best. Remember, the key here is to be the bombshell beauty to whet the investor's appetite. It's the investor's responsibility to see if he can tie your business concept to your supposed financials and see if there's any semblance of reality there and if there's a fit with his or her investment program. You just worry about being that bombshell beauty.
Incubatees and investees, help us help you: make sure to check in with Joe and his portfolio team during office hours, regularly. He and his office aren't hard to find.