Why I’m joining DCM Ventures

October 1, 2014 Leave a comment

Venture-Capital

When I was 22 years old, I had a unique opportunity to move to Hong Kong with my investment firm to help grow their Asia presence. Prior to that, I had not spent much time in the region, other than a few short months as an US exchange student – which was eye-opening but also cut short due to the SARS epidemic. I absolutely loved my time in Asia – traveling from Japan down to Australia and developing my global perspective. When I moved back to the US for business school, I always thought my career would be in Asia. Instead, I met my now husband, Nate, and ended up in San Francisco where I transitioned away from finance and jumped into entrepreneurship.

When I started ChoicePass, I was humbled by how hard being an entrepreneur really is. I did not realize how little I knew about technology and starting a company. I was also humbled by the talented employees I managed to convince to join me on our quest to solve a big problem, and the amazing advisors and investors who appeared to be infinitely wise. Through a ton of hard work, seizing opportunities and sheer determination, we grew our company to several hundred customers, raised funding from great investors, and started getting the attention of the tech press. When we approached Salesforce for a partnership with Rypple, those talks ended with an acquisition – although earlier than expected – was nonetheless very exciting for my team because of the tremendous growth of Salesforce and the strategic fit in our shared vision to disrupt the HR SaaS space.

As I approached my two year mark at Salesforce, I was seriously considering my next start-up – a natural move for an acquired founder. Unlike many founders, I had an amazing time at the parent company, helping to build the Work.com business from 0 to over 1,000 enterprise customers and learning from some of the brightest and most experience execs in enterprise software. I learned a ton, particularly around areas where I was inexperienced: sales, marketing, scaling products for the largest segment of enterprise. These were the areas where Salesforce really shines.

I met the DCM Ventures team nearly a year ago. I remember because Jason Krikorian and I met right before I left for Burning Man ’13. Their model really impressed me. Despite being under the radar in many respects, I believe they are the only firm with a strong presence across the world’s 3 largest technology markets: US, China, and Japan. They operate as a single team with a single partnership – a stark contract to the segregated, franchise model that many Silicon Valley VCs employ. As I spent more time with the team, I realized there was a tremendous opportunity to truly help companies expand globally. And DCM has proven they can do this better than most. Many of their US companies have expanded in Asia thanks to DCM’s connections and operational involvement. Many of their China-based companies have formed partnerships and expanded to the US. Several of them – including VIPShop (NYSE: VIPS) and 58.com (NYSE: WUBA) have gone public in the US at multi-billion dollar valuations.

I am a strong believer that good venture investors work for their companies and support them through ups and down. As an entrepreneur and product guy, I am excited to be helping companies solve the hardest problems. Sitting down and white boarding product strategies and go to market plans is what gets me excited. Product and Sales are two of the most important aspects of any start up. I hope that I can help my companies succeed in both. And with DCM, I’ll also get to added benefit of a global mindset.

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Raising Seed Capital for your First Company

May 18, 2012 3 comments


One of the most common questions I get from aspiring tech entrepreneurs is: How do I go about raising my first round of capital? With Facebook going public, Spotify raising capital at a $4 billion valuation (4x their previous round), top venture funds like Kleiner Perks and Andreessen Horowitz closing new funds, and large exits like Funzio and Instagram – it isn’t surprising that a lot of people are thinking about doing their own start-up. 

Now let’s suppose you have an idea and have put together a prototype and small team for your FIRST true entrepreneurial venture, how do you go about approaching investors? If you answer yes to any of the four questions, you are at a big advantage.

1. Do you or any of your co-founders know angel investors already? Even knowing 1-2 prolific angel investors can dramatically increase your chances of raising a suitable seed round.

2. Do you or any of your co-founders know other entrepreneurs? Entrepreneurs can serve either as referrals or if they have made a bit of money themselves, could be potential angel investors.

3. Do you or any of your co-founders know VCs? The VC route is typically not recommended for pre-seed stage companies. If you know partners at VC firms, they may be able to give you advice on how to raise your round or milestones you should have before approaching investors. Early stage VCs could also introduce you to angels or invest personally because they like you. Who are some of the top VC partners? Check out Forbes’ Midas Touch. 

4. Do you have some affiliation with an Angel Group? There are some angel groups which are affiliated with certain companies (ex Googlers for example) or universities (Harvard Angels). They are typically open to very early stage companies with just a prototype.

Now, let’s suppose the answer to all four is ‘NO’. Then I would recommend exploring incubators and accelerators. Now, getting into these programs are typically not easy (Y-Combinator for example touts their low single digit acceptance rates) so I would recommend applying to all of them that fit your needs. Incubators and accelerators have been popping up all over the country so it is worth researching which ones fit your company. If you get into an incubator – great! You are at a HUGE advantage to raising capital. They will work with you, mentor you, and arguably most importantly, hold what is known as  “Demo Day” where large numbers of investors come to hear your pitch. Here is a list of some of the top programs.

Now let’s assume that you don’t get into an incubator or accelerator. How else would you be able to raise capital? Here are some quick tips:

1. Network, network, network. All of the above questions really have one common theme. It’s about who you know. If you’re currently at Google or Facebook, you are probably only 1 degree of separation from angel investor. You should make a good name for yourself so that when you gracefully exit, you could leverage your network to get introduction. AppMakr had an interesting blog entry showing their $1mm seed raise and splits potential leads into 3 categories: NEW SCHOOL, OLD SCHOOL, and TIME WASTERS. The key point here is that you should expect to go through a ton of meetings before raising your round because in a lot of ways, it’s a numbers game. With that said, you should be smart in assessing which meetings to take (if you have that luxury). His “Rule of 10” (a bit harsh IMHO) says that you shouldn’t take a meeting unless the potential investor would be open to introducing you to 10 other investors.

As part of ‘networking’, you should also be on Angelist. There are plenty of blog entries on how to effectively use Angelist. We actually did not end up using it for ChoicePass but that is definitely not the norm.

2. Have your story down. It is very important to have your 10 second pitch, 1 minute pitch, and 3-5 minute pitch down. Assuming you’re attending various networking events or even conferences, potential investors or introducers will likely first want to hear the crisp 10-second pitch. A lot of companies use analogies for this. (“We are an AirBNB for dogs”). It makes it easy for external parties to classify and assess your company. If they seem interested, you can move into your 1 minute pitch (which usually includes something like “Imagine scenario XYZ…” or “People typically do X and hate it…we are offering Y”). Then if they are really interested, you should probably have a 3-5 minute ‘pitch’ down (team, market data, opportunity and if applicable – existing investors).

3. Friends & family. It is not uncommon to ask friends and family to be part of your initial seed round. There are various pros and cons to this. If you are considering this route, I would provide some words of advice. First, make sure you know what that money will be used for and provide proper documents (e.g., share documents, note documents, etc). Second, think about how that money will help you reach your next milestone. It is probably not realistic to purely raise money from friends and family for the purposes of recruiting a team. Your first few employees should be treated like founders anyways and probably take little or no salary (unless you’re already funded). If you raise $100k from friends and family to explore a half baked idea with virtually no market validation or to hire a development team in India, the likelihood they will see their money again is pretty low and it could strain relations.

In summary, raising money is not easy. As often as you see random companies being funded on TechCrunch, you must set realistic expectations for yourself. If you have an awesome product and real users, you are at a much better place than simply having an idea. You should also set a deadline for your fundraising so you and your team can get back to work.

Some good posts on raising capital:

OnSwipe: From $1,000 to $1,000,000 (via TC)

How to Storyboard your Pitch (via Quora)

Funding your Business (via MeMe Burn)

10 Signs You’re An Entrepreneur

May 15, 2012 Leave a comment

YFS Magazine (“Young, Fabulous & Self-Employed”) came up with 10 signs you’re an entrepreneur. I don[t agree with all of them but aspiring entrepreneurs should think about how this fits with their philosophy. Here are some of the more interesting ones:

1. Let’s just say, there is no shortage of self-confidence here. I would certainly say that entrepreneurs are typically self-confident. Do some of them take it overboard? Of course. But if you don’t believe in yourself, you probably shouldn’t expect others to believe in you. Entrepreneurs face rejection on a regular basis. In fact, a high No:Yes ratio may actually be a good thing – it means you are pushing the boundary. 

2. You like to run things. Not much of an explanation needed here. If you don’t like being in command, it’s hard to be a co-founder of a start-up. This is totally different from micromanaging or even being involved with all aspects of your business. It simply means you enjoy managing, leading and people. 

3. It can always be better – and you make sure it is. Possibly my favorite one. When I was working as an analyst at a large asset management firm, I took pride in building models that considered varied scenarios, variables and complexity. But building an excel model and delivering a product are totally different. One can approach perfection – with the limiting factor being the inputs. The other can always be better. And that is something that great entrepreneurs subscribe to: there is no perfection, only the pursuit of excellence in delighting the customer. 

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What the Instagram-Facebook exit means for aspiring entrepreneurs

April 12, 2012 Leave a comment

When Instagram announced that it was being acquired by Facebook for $1 billion, a few thoughts immediately came to mind. First: Wow, is Instagram worth $1 billion and what does this mean for the product and for the social media titan – Facebook? Next, I immediately looked up how many employees Instagram has, how long they’ve been around, and how they got started. Like a lot of entrepreneurs (and non-entrepreneurs for that matter), I felt a twinge of envy quickly followed by joy for both Instagram, Silicon Valley and entrepreneurs everywhere.

Here was a team of two co-founders, Kevin Systrom and Mike Krieger with a vision, ambition and a dream. Both are young, recent college graduates, much like many entrepreneurs running the hundreds, if not thousands, of start-ups that receive outside funding every year. In March 2010, Instagram received $500,000 in seed financing, a rather modest amount from Baseline Ventures and Andreessen Horowitz.  The Company launched their product in October 2010 with 80 initial users, announced Foursquare integration  two months later, then reach 1 million users shortly after. Now, 1 million users is quite impressive by most measurements and by that time, most people in tech have heard of Instagram (including their larger $7 million financing round). Still, with only a handful of employees, Instagram kept appropriately lean while scaling out features, dealing with their 50k+ daily new users and releases real-time APIs that allow universal sharing on any service. Meanwhile, Facebook had been repeatedly rumored to have made acquisition attempts for Instagram. These are the stories that inspire entrepreneurs – both current and future/aspiring ones. The Company closed $50 million of funding at a $500 million valuation just days before announcing the $1 billion Facebook acquisition.

So what does the Instagram acquisition mean for aspiring entrepreneurs and what lessons can we take away? First – growth does not necessarily mean headcount. When Instagram raised $7 million in early 2011, they certainly could have hired more than 10-12 employees (their supposed headcount is “about 13” employees). Instead, they stayed laser focused on the product and business with the user experience in mind. Second – always have a number. Instagram probably had many interested buyers including Facebook. But when Facebook finally came with a “real offer”, Instagram acted quickly. For many start-up “wantentrepreneurs” – Instagram is a classic example of the bet-big, get-big mentality that is pervasive within start-up culture. Perhaps the $1 billion exit will lead to more wanabe-entrepreneurs to make the leap and start something. Or perhaps, it will simply lead to jealousy and bear-talk about another pending bubble. If there’s one thing I’ve learned since starting ChoicePass, it’s that success takes discipline, hard work, belief, passion and [calculated] risk. For most people on a paycheck, seeing Instagram sold for a large sum of money is the equivalent of winning the lottery for them. But for those aspiring entrepreneurs with a great idea, this might be the push that gets them to start. Maybe they too can create the next Instagram. I’m happy for Instagram because the founders stayed true to their vision and executed beautifully in a space that they were passionate about. We can probably all agree that a photo-sharing app with filters isn’t going to be on the top of our list of “most innovative” new products. But Instagram’s zero-to-one billion story resonates with entrepreneurs because of this simplicity. Try to do one thing very well instead of a dozen not-so-well. Focus on reaching your milestones. Stay lean. And most of all, remember to have fun.

Zero to 1 Billion - Infographic

2011 – Dismal year for IPOs

December 22, 2011 Leave a comment

2011 was not the bright year for IPOs that some have hoped for. A look at some of the more high profile IPOs led to quite a few surprises. Groupon popped then fizzled. But it is still above water. Zynga opened down and continues to trade below its IPO price despite cutting it’s valuation in half. And Michael Kors became the surprise hit among fashion stocks.

USA TODAY on 2011 IPOS

 

Categories: News Related Posts

Back from Thanksgiving and back to blogging

November 28, 2011 Leave a comment

It’s been a crazy few months and one of the things that was unfortunately cut from my schedule was regular blogging. I’m going to try to change that. As a shameless plug, I also post regularly for the ChoicePass Blog. 

After a nice Thanksgiving with family in Los Angeles, I’m now back in San Francisco. We recently moved into our new office at ChoicePass, right in between the financial district and union square (Kearney @ Sutter). Great location and perfect space for us. Here’s a photo of some ChoicePassers taking a break to play a Wii session in our office.

 

Categories: News Related Posts

Great Names Don’t Come Easy

July 7, 2011 Leave a comment

When we were coming up with our name for ChoicePass, a soon to be launched platform for small/medium sized merchants (still in private alpha testing) to create customized membership programs for their customers, it was surprisingly difficult.

Here are my tips on finding a great name.

#1. Brainstorm on the “essence” of the product or service that you are offering.

– Especially if you are the business co-founder, you are expected to take a lead on all things non-technical and coming up with the name falls squarely in that camp.

#2. Look up whether or not the domain name is taken.

– This also includes looking up whether or not the name has been incorporated, twitter name, facebook name, etc.

– Many, many domain names are taken – some of them by “squatters” looking to make $$ from your unassuming start-up.

#3. Google-it

– Even if it is available, make sure there are no negative connotations!

#4. Does it make sense?

– A name like Google is great now that they’ve built brand equity and is now part of the Webster dictionary. For most start-ups though, coming up with your own name may not be such a good idea because people may not know how to spell it.

#5 Say it out loud.

– We came up with a number of names that, in theory, seemed cool but were just plain hard to say. Or could be easily spelled incorrectly. Or reminded us of not-so-cool things when we actually said it out loud

Alot of co-founders think that the name is secondary to the product and execution. I completely agree. But a name – and building brand equity and an identity – around that name is also very important. Particularly if you are in the consumer internet space. Everyone knows what Groupon is. It just makes sense. Buywithme on the other hand…not exactly original.

Guy Kawasaki’s book, Art of the Start, has some great tips on naming start-ups!

Categories: Original Content