This post by Fab.com founder Jason Goldberg is phenomenally fucking brilliant. 

Here’s the gist of it: In their latest funding round, instead of the insane back-and-forth clusterf that is the venture funding process, they just let the data talk. The company picked the set of firms and partners they thought would be interesting and actually gave them access to all of their metrics. Like, everything. They asked the VCs to actually get to know the company and reach back out if they were interested. 

What this did, effectively, is completely refine the pool to investors who understood exactly what was happening with the business and were excited about it. Then all the parties got to focus on actually finding a fit based on culture, team, and vision for the future. The result for Fab.com was that they got exactly what they want in an investor with an incredibly small amount of time (relative to normal) spent fundraising. 

As an unbelievably great site with explosive growth, Fab.com had more of an ability to write its own ticket than most. That said, the lesson to just tie your pitch to data would be so well taken by any entrepreneur. 

One of the worst sins a writer can commit is “burying the lede.” This means obfuscating the main point they’re trying to get across in a sea of exposition or language or general noise. 

The lede in any venture pitch is the numbers. How are users growing, how is that growth accelerating, how is it driven, what does it cost to drive it, how many of them are converting, how many of them are coming back, how long are they staying, etc. etc. etc. 

Companies have to *own* these numbers. I think most entrepreneurs worry that unless they’re Facebook, sharing numbers will doom them. The truth is that one of the greatest strengths of good pitches we see is that the entrepreneurs know everything about the numbers. When they’re good, they know why and how to build on top of them. When they’re bad, they have plans for how to fix them. And in the real world, almost every interesting early company has both good and bad numbers. 

Knowing numbers - even the ones you wish were better - inspires confidence because it shows investors that you get what you’re doing. Don’t get nervous. Don’t bury the lede. Kill the noise. Pitch the numbers. 

2 years ago
  1. nlwinsf posted this