Our last stop of the Trek was an icing on the cake. We felt very welcomed by Hemant Taneja (Managing Director), Katja Gagen (Vice President of Marketing), Steve Herrod (Managing Director), Prateek Alsi (Principal) and the whole General Catalyst team who received us on a happy hour.
Before the party started, nonetheless, we had entrepreneurs pitching, as well as Hemant Taneja, Prateek Alsi and Steve Herrod sharing a few thoughts about the “VC market” and the GC philosophy. They mentioned that VCs usually invest either in an ecosystem (of domain), or in great people and what moves them. The latter is more of their style. The GC team is very attentive to what caused the “genesis” of the companies. “We look for authentic stories,” noted Hemant Taneja.
And, as “it all comes down to people,” we will finish this year’s Silicon Valley Pitch Trek series of posts with what the GC team looks for in entrepreneurs:
– He/she is prepared to make hard decisions
– He/she has the complicity of the team
– He/she is resilient and has a good attitude
– He/she has a complementary team
Thank you very much to the General Catalyst team for having us in this last stop. It was helpful and fun! We hope to see you again next year!
In our last day of the Silicon Valley Pitch Trek we met with Jerry Chen (Partner) and Sarah Guo (Associate) at Greylock Partners. It was a short, but very productive meeting. Both offered keen, smart feedback to our entrepreneurs.
Jerry Chen shared with the entrepreneurs what signals to investors that the startup might be an interesting investment. A few of those factors are who are the board members, investors, founders, and who is the startup attracting from the market to be a team member.
If you are pitching to Greylock Partners, keep in mind that numbers matter. Sarah Guo, helped entrepreneurs understand different approaches to calculate their potential market and costs. According to her, one of the main questions to be answered is: “is the market big enough”? Another relevant piece of advice Sara Guo gave them was about evaluating the market’s current value chain: “who and what is your solution replacing”?
A Silicon Valley Pitch Track would not be complete without Greylock Partners. Thank you very much, Jerry Chen and Sarah Guo for hosting our entrepreneurs in this year’s edition.
The next stop on our last day of Silicon Valley Pitch Trek 2014 edition was at KPCB. We want to say a big thank you to Creighton Hicks (Partner), Anjney Midha (Partner), Andy Chen (Director), Cindy Cheng (Digital Team), Aviv Gilboa (University Relations) and team for such a warm welcome. In the most supportive Silicon Valley style, to every MIT student pitching, there was at least one contact that they could introduce him or her to.
KPCB is organized in three verticals: Digital (consumer and enterprise), Life Sciences and GreenTech. The team who received us was mostly engaged with Digital. As trends observed, they indicated to be interested in IoT and crypto currency related startups. Moreover, KPCB shared the word about their Fellow Program, which should open applications in a couple of months for Summer interns to work in their portfolio companies. Keep posted, Sloanies!
Besides the introductions to relevant contacts, KPCB’s team gave feedback to our entrepreneurs regarding the construction of the pitch. A selection of such were:
– Clear go-to-market strategy: “what customers and segments will you target first”?
– Adoption: state how you imagine the adoption of your product will be.
– Exit or funding benchmark: whenever possible, show startups that exited your field of action, or competitors that received funding.
– Competitive analysis: compare your features versus competitors’ to make your differentiators clear.
– Customers’ pain-points: be clear about what are the pain-points you are solving to the customers.
Thank you again KPCB for taking the time for hosting us, and for sharing valuable feedback and contacts with our entrepreneurs!
Moving on to our second day of the Silicon Valley Pitch Trek this week, we were received by the market legends Rory O’Driscoll (Partner), Ariel Tseitlin (Partner) and Alex Niehenkex (Principal) at Scale Venture Partners, one of the most experienced VCs in the market. The Scale VP team gave valuable feedback to our entrepreneurs, as well as engaged in an interesting conversation about later stage investments.
As the name Scale VP suggests, the team is focused in investing in startups that have already found their product-market fit, and are over the “does this even work?” phase. Most of Scale VP’s initial capital investment range from $5M to $25M, and are on “early in revenue stage” startups that generate between $200K and $70M in revenue. For those interested understanding the role of VCs at this stage, Rory, Ariel and Alex shared that “80% is about the decision of where to put your chips, 20% is about managing the investment.” The four main activities are financing (e.g. picking the right deals), talent management (e.g. hiring), strategic direction support, and exit. They did have impressive 37 exits since 2000.
Additionally, the Scale VP team shared with our entrepreneurs how startups can be more effective in funding at earlier stages: “It is important to find out who are the Angels and VCs that have the best fit for your startup.” They exemplified that it is important to understand the position of the Angels and VCs regarding stage of startup, kinds of deals, industry, and regular parameters of negotiation used by them.
Thank you very much Rory O’Driscoll, Ariel Tseitlin and Alex Niehenkex for meeting with the Sloan E&I Club for our annual trek! It was a remarkable experience for us.
Alex Taussig from the global venture capital firm, Highland Capital Partners, hosted a visiting speaker series lunch today. He shared some advice about breaking into careers in technology, particularly startups. Alex used an Oregon Trail (computer game from the 90’s) analogy in his presentation to describe the career search journey but unfortunately, the non-Americans in the room didn’t really follow. Don’t worry – luckily I don’t think having played the game is necessary to appreciating the great advice Alex had to share.
What are the products you obsess over? What are the problems that absolutely fascinate you? Alex started off with these questions. These are the most critical questions in forming your career strategy. Because you want to love going to work everyday, and answering these questions will help you focus your search.
Note: Advise is not a category. Alex then offers up three key roles he sees at a company: Sell, Build, Operate. Think about what you enjoy doing to help you know what role you want to go after. If you want to do strategy, start a company and be the CEO… but giving advice isn’t really a key role. Listening to him and being an ex-consultant myself, I took away loud and clear that I need to develop some other important skills!
Jumping off cliffs vs. flying high… there is definitely a difference. Alex puts tech companies into three stages which are associated with different levels of risk. First is the early-stage startup. This is a bit more of a “jump off a cliff” option. There are a lot of risks and an early stage startups basically give you very little support. You decide whether or not it’s a soft landing. That’s different than going to a big company (or a mid-stage one), where there is some institutional support systeHe encouraged anyone considering entrepreneurship to really think about if they are willing to handle what can be an emotionally gut-wrenching, high-risk effort. Second is when a company is generating revenue. This signals it is relatively stable and unlikely to suddenly fall apart. Alex’s feeling is that this is a great stage for MBAs, where the risk isn’t as high but you can join early enough to take on great roles in helping take the company to success. Last category is profitable which is clearly just pretty great, the trajectory looks good, but the downside is that it may not teach you what you’re looking to learn depending on your goals.
Where to live. Alex presented a graph showing that 86% of value and 54% of exits are in Silicon Valley (2012-2013 data compiled by CBInsights.) Despite growing tech scenes in cities like Boston, NYC, and LA, Silicon Valley is still the dominant leader. Perhaps it’s that proximity to Oregon that is the secret sauce. Location he said is a matter of personal preference, but the numbers are in your favor in Silicon Valley.
Become a tech news fiend. Alex recommended using a RSS feeder and apps like Pocket to aggregate tech news from tech blogs and specific blogs in your particular area of interest. If you give yourself 3-5 months, you can learn a lot about a technology space, follow the companies receiving Series A and B funding, and position yourself to sound knowledgeable to potential employers.
The job hunt: focus and be prepared. Going back to narrowing in on a passion, Alex recommends not having a “scattershot” approach to breaking into tech careers. For networking, he thinks LinkedIn second-degree connections provide an incredible network. For outreach, use a short personalized email pitch that fits on an iPhone screen, with the goal of getting to a conversation. Attach a resume or refer to LinkedIn to provide information about yourself instead of writing a long email. Remember that all “coffee chats” make an impression, so take it seriously, come prepared to “blow them away”, and follow up within 24 hours. Remember that startups don’t really hire early, so build a relationship with people you’d like to work with so that when a position opens up, you’re top of mind.
Now you choose. When you have the awesome opportunity (which all Sloanies will) to choose between several offers, don’t pick based on compensation. Alex recommends optimizing for your learning to prepare you for the next stage of your career. If you’re hoping to make money, make it through equity, which is all about picking the right company, not about the salary. Lastly, the role is less important than joining a fast growing company because, in a fast growing company, your role will change frequently as opportunities arise. If you know you’ve found a promising all-start company, join, out-perform, and you will earn an all-star leadership role.
What makes a great venture capitalist? During Q&A, Alex was asked about the skills valuable for a VC role. Alex said, “to be honest, I only do finance about 5% of the time.” What Alex has observed is that the best venture capitalists are simply people that entrepreneurs like. They are people who understand the journey of entrepreneurs, respect and work hard for entrepreneurs, ask tough and meaningful questions, and are helpful and knowledgeable advisors.
This was really insightful and practical advice. Hope our readers feel more equipped to break into their dream tech companies! Thanks Alex for coming to speak with us. Next time we’ll ask for a demo of Oregon Trail.
Alex Taussig(SM ’07) is a partner at Highland Capital Partners, a 26-year old global venture capital firm investing in early stage technology startups. Alex has led or co-led Highland’s investments in Jaunt VR, RethinkDB, Talaria Systems (acq. by Google), RentJuice (acq. by Zillow), and thredUP. He has also worked closely with several MIT startups in the Highland portfolio, including Bit9, Filepicker.io (acq. by Copper.io), Streambase (acq. by TIBCO), and Vertica (acq. by HP). Prior to joining Highland, Alex conducted research in materials engineering as a graduate student in the laboratory of Dr. Caroline Ross and had the pleasure of TA’ing one of Dr. Donald Sadoway’s last sessions of “3.091 – Introduction to Solid State Chemistry.” Alex also received both an AB in physics and an MBA from Harvard University.
On Tuesday, Oct.14, we continued our annual Silicon Valley Pitch Trek, where ten startups are selected from a pitch contest and taken to Silicon Valley to pitch to the top firms and get real, live feedback from potential investors and learn more about the different investment philosophies of these firms. With 100 years of investing experience, Bessemer was a highly desired location for our top five selected entrepreneurs. The team at Bessemer, Sunil James & Sunil Nagaraj, or the Sunils as we called them- were gracious hosts and provided valuable feedback and advice for these MIT start-ups.
Although it was the last VC firm our group visited on the trip, Bessemer was definitely not the least. Their experience with seed, early stage, and expansion companies across the globe, helped our Pitch Trek team gain great insight into variable investment opportunities, and helped our founders create a well-rounded picture for their business.
A big thank you to the Bessemer team for their hospitality, time, and insight. We look forward to seeing you next year!
The MIT Sloan E&I entrepreneurs pitched their early-stage start-ups to the investment team at Khosla Ventures on Tuesday. Khosla focuses on environmentally friendly technologies in addition to the tradition venture areas such as the internet, computing, mobile and silicon technology arenas. The team we met with had a broad focus on topics from food and agriculture to machine-learning.
The E&I pitchers received feedback from three of Khosla’s investment team, and gained valuable perspective on a spectrum of topics from business models to team structure, pitch, and more. Thank you again to Khosla for hosting our MIT entrepreneurs this week. We hope to see you again on our annual Pitch Trek next year!