Category - Startups

Startups

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Boards: Venture Evolved on Strong Suit Podcast
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Why Origin Invested in Tock
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The Melting Liquidation Preference
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A Note on Notes: Hidden Costs of Convertible Notes
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The Pitch
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Venture Evolved on WBEZ: The Chicago Venture Market
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How to Lose Credibility in your VC Pitch

Why Origin Invested in Tock

The Start

In 2014, Nick Kokonas wrote a manifesto highlighting that if restaurants used tickets instead of free reservations, restaurants could dramatically reduce no-shows, optimize their supply chains, improve working capital, and eliminate staff answering the phones to take reservations. It made so much sense– the world SHOULD work that way, but it does not. It prompted the question: why are consumers willing to buy a ticket for a performance but not for a restaurant? Are consumers willing to change this behavior?  Could Tock help restaurants– notoriously difficult businesses– dramatically improve operations and financial results? Read More

The Melting Liquidation Preference

I’ve been through two severe market declines, both in 2001 and 2009. Public market volatility at the beginning of 2016 gave birth to a lot of “doom and gloom” posts on VC blogs. The public markets have recovered, but the scare earlier this year seems to have resulted in more conservative cash planning within early stage companies. Investors and founders alike are paying closer attention to multiples. It also got VCs like me thinking more about structure.

There is a large wave of companies that raised capital in the last 18-24 months that will  come to market for capital soon or have recently done so. The key obstacle for these companies is that they likely raised capital at a valuation higher than they could retrieve in the markets today. These companies might have made substantial progress in their businesses, thereby reducing the risk, and therefore increasing the valuation….or so the argument goes. The issue, however, is that the price for unit of risk has gone down. In other words, there is a generation of companies that need to accomplish significant traction just to earn their most recent valuation. I’ve heard several people recently proclaim “flat is the new up round.” Read More

A Note on Notes: Hidden Costs of Convertible Notes

It’s been really exciting to watch the explosion of startup activity the last three years. This expansion has been characterized by technology infrastructure shifting from fixed cost to variable, proliferation of seed funds and accelerator programs, exit markets opening and other factors.

A byproduct of this increase in seed investment activity is the wide use of convertible notes. I am all for structural innovation, but I believe that the use of convertible notes has drifted away from the original purpose, and this shift is a bad thing for founder and investor alike.

Read More

The Pitch

Yesterday, I had the chance to participate on a podcast called The Pitch. It was started by a serial entrepreneur and angel investor Sheel Mohnot that I know from my investment in FeeFighters. The podcast features entrepreneurs pitching their seed companies and investors reacting to the investment. Yesterday was only the second episode, and the podcast is number 8 in iTunes in the investment category. Tune in!

Pitch 2: Flair – w/Nick Moran, Jason Heltzer & Charlie O’Donnell

UPDATE: The Pitch won Product Hunt that day, and rocketed to the #1 business podcast, woohoo. It has since come down, but a week later is at #13, ahead of HBR, Motley Fool, GaryVee, Mad Money and many others…DESPITE me being on the podcast. Way to go Sheel!

 

Venture Evolved on WBEZ: The Chicago Venture Market

I was recently interviewed by Niala Boodhoo on the Tech Shift, a radio segment of the Afternoon Shift program produced by Chicago’s NPR station, WBEZ. It was a lot of fun to meet Niala and Melba Lara in person after hearing their voices for so many years.

We discussed the state of venture capital in Chicago and Illinois among other topics. You can listen here.

How to Lose Credibility in your VC Pitch

I estimate that I’ve sat through 4,000 startup pitches over the years.

The truth about VC investing is that it is as much about selection as it is about elimination. A huge percentage of a VC’s time is with companies that do not turn into investments. So how do you become more efficient? By eliminating deals faster and spending more time filling the funnel and with companies that turn into deals.

So it will not come as a surprise that many VCs during a pitch look for reasons to kill a deal, whether consciously or not. As an entrepreneur, if your deal is going to get turned down, you want it to be on the merits of your company. Yeah, it might sting a little that your market is too small, but you have to respect an investor if they are forthright and turn you down for a legit business reason.

What you want to avoid, however, is being turned down because you lack credibility if indeed you do have credibility. So I thought it might be helpful to compose a list of great ways to lose credibility and to screw up your VC pitch in an effort to help you avoid such a fate:

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Copyright © 2014 Jason Heltzer