Bill Gross talks about analyzing his 100 startups and others from the marketplace around him.
In conclusion he says:
Timing for us is product market-fit and demand.
Shortened Newsletter this month as everyone and their sister is on summer holidays.
Month three on MailChimp and we still have a high open rate – 53%. We changed our format a bit to deliver more content viewable in email windows and it’s getting better click-throughs!
Lots of Demo Days, and lots of improved pitches from earlier meetings We’ve started Due Diligence with 3 software companies.
A syndicate agreement with AngelList is progressing.
Going back to the First Round 2015 post about the top 10 findings of successful startups, the number 4 reason for success is that there is a halo effect from former employees of great companies. So, “Founding teams with experience at Amazon, Apple, Facebook, Google, Microsoft or Twitter built companies that performed 160% better than others in the First Round community.” We actually looked at this and found no confirmation in Canada. Probably because these larger Internet companies have not maintained large development Teams here since the start year of our data (2007). We understand why they would find this, but our data doesn’t confirm this yet in Canada.
Drop the newsletter an email if you want someone interesting interviewed or you want to profile a company at newsletter@themin.ca.
Month two on MailChimp and we still have a high open rate – 42%. But information that doesn’t appear on the top half of the newsletter doesn’t get clicked on. So we’re going to experiment with new formats going forward until we get increased clicks on the articles lower in the stack (no cheating).
The gang at theMin.ca went to a number of events in Mississauga and Toronto in June. We’re seeing the same startups appear in a loop at these events. It almost seems like they don’t know that the general events don’t get a lot of traction from Angels. Their best bet is to go to Angel-only pitch days. We had some screening meetings with a few science startups who will appear in your circulars. We’ve also applied for a syndicate agreement with AngelList. This would allow other angels to place as little as $1,000 into the deals we underwrite. AngelList would take a 5% carry rate for this service. We looked at the Pitchbook data access and it’s $17,000 USD/year cost.
Going back to the First Round 2015 post about the top 10 findings of successful startups, the number 5 reason for success is that repeat founders do better than first-timers. We went to our Gekko® Dealflow database and ran some scripts (don’t try this at home!):
Well, that’s another easy one to add to the scoring system as a power multiplier when we are screening companies. Clearly, founders learn how to run a business and are better the second (or third) time around!
Drop the newsletter an email if you want someone interesting interviewed or you want to profile a company at newsletter@themin.ca.
Our first month on MailChimp went well: lessons learned is that any subscribers to the newsletter need to wait until next month for the following newsletter and don’t get sent the most recent one which was automatic on our old platform. Also, we have a 0% unsubscribe rate thus far and a 62% open rate. We never received this information from the Listserv so it’s new to us.
The gang at theMin.ca went to a number of events in Mississauga, Toronto, and Waterloo last month. Some interesting startups and ideas were seen. We’ve been following up with the founders and teams as time has allowed. Some team members also visited a number of Angel groups and Accelerators in the last month and will make a presentation to the team at our next meeting.
Andrew has a meeting with the Mayor of Mississauga on Tuesday, June 18, to review the interest the City would have in associating itself with our activities and perhaps supporting an Accelerator.
Going back to the First Round 2015 post about the top 10 findings of successful startups, the number 6 reason for success is co-founders do better than solo founders. We actually can add a lot of information to this from our own deal flow information:
When you look at it, you could convince yourself the reason is that one founder has to dedicate themselves to raising money and selling the product, and the other has to build it. When you have only one founder, they are responsible for everything. Want to spend time with your new-born son, or sleep in once, or get your appendix removed? Well, you’re behind schedule if you are a solo founder. We’ll add this to our filter. (hmmm Founderfuel looks a little weak but the sample size was small)
The newsletter is looking for someone or a group of people to interview Angels who can relate their first investment and what they learned. We’d like it to be a regularly occurring part of the newsletter.
Happy boating and travels everyone, we will see each other in person in September!
We’ve moved away from the Listserver we had running on a private machine in the basement of SFU in BC. This will be the first issue run with 24-bit-colour graphics and web-links that actually work using the MailChimp platform. I’m sure we’re all excited that this guy who was once on the cutting edge of tech, a 14-year-old turning Steve Wozniak’s boards into software on the Atari platform, finally got around to joining the 21st century! Past issues ‘may’ become available on TheMin.ca if wonder-boy can format them again! Plus, we will be more compliant with anti-spam legislation. No more “unsubscribe/subscribe” emails being sent repetitively by new members to all members.
Our team at TheMIN.ca watches HBO’s Silicon Valley on Sundays and then we come back with nods of “how true, how true”. One thing I have noticed is how rough (sexist, racist, derogatory) some of the dialogue is and have trouble remembering if that’s how it was when we did it. But then a few stories come to mind. We had a great algorithm writer from Korea in one of the companies I worked at in San Mateo, who wrote most and optimized all of our assembly code. The engineering team lead nicknamed him “Fuji”! Not only was it racist it wasn’t even close to being culturally correct. Working for that bully wasn’t super fun for me either. He disappeared from the map and I never met him again. I did, however, meet up with Hyon at another company and he was a different man – talkative and friendly. We spoke only once about our former boss and he told me what I used to be called, and though I felt kind of bad, I was relieved I could look Hyon in the eyes as an equal. “So what,” you say. Well, in the next few months we’re going to build a scorecard for something I call ‘destructive bullying’. It’s a way that founders and start-up staff can quiz themselves and see if there is a destructive element in the company, with some ideas on remedies. If you’ve seen this type of behavior in your workplace, or you’ve seen it and solved it, please drop me a few sentences on what and how to aao@themin.ca. I’ll explain the qualifier once we build the questionnaire!
Going back to the First Round 2015 post about the top 10 findings of successful startups, the number 7 reason for success in a startup is that a technical co-founder is essential in enterprise companies, but a hindrance in consumer-facing companies. That seems counterintuitive, because:
So this doesn’t seem to be a hard and fast rule as 4 of the top 10 founders I have listed here were actually very technical founders. Next month we’ll look at number 6. Some successful investments could reflect the importance of some hidden variable. Venture capital is largely an exercise in intuition and pattern matching. This sort of data doesn’t substitute for judgment, but to the extent that it can help investors identify things that track with success, data can inform those judgments.
Email last week from a subscriber: “Why don’t you cover more non-mainstream start-ups. Mississauga has a lot of other communities.” When we find them we’ll put them in or let us know where to search.
The newsletter is looking for someone or a group of people to interview Angels who can relate their first investment and what they learned. We’d like it to be a regularly occurring part of the newsletter.
Please send us your ideas for a Pitch-Day in the late Summer or early Fall. The earlier vision of using the foyer of the Living Arts Centre for the day means we need to schedule ahead, so odds are good we will use the City Facilities at the Hershey Centre, The City Hall Rooftop or the Small Arms Building.
More ideas for discussion: a couple of founding members want this Newsletter to turn into a full-fledged magazine, and having it move to MailChimp with graphics is the first step in that. The newsletter membership needs to grow for us to attract some advertising revenue or we need to charge a membership fee for the information gathered to get some more staff. Let’s remember that we’re all volunteers here and we’ve been at it for 14 issues!
And for the last time Sal, we are not going to have a Buy-Sell-Swap section for office equipment … or missed connections!
Finally, we usually don’t do much in terms of meetings from May to August, but James has asked that we have an organizational meeting in the Summer to plan out our Trade Show attendance for next year. Andrew will send out a doodle at the end of the month.