Venture Learnings

There is fortunately an even more traditional, but rarely well-used route to getting a venture opportunity funded, and that is direct marketing. Traditional because direct marketing is the closest form of marketing to direct selling, and rarely used because, well, I don’t know why. Maybe after people read this they will use it more.

Here are some Direct Marketing tactics and strategies (freely intermixed, as I have long believed a great tactic is a strategy).

1. Have a great idea that other smart people really like. (Market research.) Having your spouse, kids, or friends like it doesn’t count.

2. Have a great idea that you pitch to your company and the company is too stupid to do it. Then go get money to do it. You will have more credibility with investors than if you work at a semiconductor company and come up with the world’s greatest idea for an exotic travel website.

3. Pick something that is cheap to start and can be started in a garage. It is much easier to raise money in Internet land when you have happy customers clicking away and bringing their friends into the site than when you are pitching SlideWare. Quite often, when you pitch for money, you will be facing investors who have seen lots of companies with rapid growth of users, transactions, etc. from angel or sweat equity and consider those lower risk than deals where the company is still a glint in the eager founder’s eye.

4. Select your target audience. Mass marketing can be cheap per impression, while direct marketing can be expensive, so you want to limit the wasted impressions. This involves doing media research (mostly the VC websites) to try to find the firms that are looking for deals like you offer. There are more VCs out there than I can count, and everyone is looking for something. So view the VC sites as profiles on a dating page.

5. Don’t send plans over the transom, or to the ‘submit your plan’ link.

6. Match the fund size and investing appetite to your capital requirements. A $100 million fund is not going to fund a $10,000,000 deal, and a $500 million or billion dollar fund is unlikely to process a $250,000 deal (with the exception of taking an early stake with an option on future rounds).

7. Email works most of the time to get your story considered, but it needs to be crafted as carefully as a prospectus, only infinitely shorter and more interesting. Subject lines with ‘Introduction,’ ‘Investment Opportunity,’ ‘Startup’ are not going to get opened. But if you have, say, a company that is getting traction in online dog bed sales, and you find investors who are keen on e-commerce and dogs, then ‘eCommerce opportunity for dog lovers’ is not a bad way to start. Better yet, send the targeted VC a doggie bed.

8. Ginzu Knives always work. If ProVina, the wine company hadn’t known T.J. Rodgers who ran into me and made the introduction, then a bottle of their wine, nicely packaged, with a note inside with pictures of the new product and the pitch that ‘this wine is the wine of the future and you can make billions from it,’ would have gotten through my screen immediately. Use your imagination. If you don’t have one, don’t try to start a company.

Every marketing writer dreams of the ultimate headline, like the World’s Funniest Joke portrayed by Monty Python (so strong, people who read only part of it got ill, and those that heard or read the whole joke died laughing).

I am a longstanding marketing writer. This essay is marketing, of course. I am promoting my firm and myself. So I fantasize that by writing this I am going to create a flood of tchotchkes from hopeful entrepreneurs to venture capitalists.

If you want an opinion on the effectiveness of your tchotchkes and how it might work, by all means send one to me and I’ll give you a quick opinion.

(By the way, I am an active golfer and, if you hadn’t guessed by now, a wine lover.)