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Going Up! How to Ride An Elevator Pitch to New Heights

10 Mar

http://www.readwriteweb.com/start/2010/01/how-to-ride-elevator-pitch-new-heights.php

As a leader in the Pittsburgh investment scene, long-time entrepreneur Mel Pirchesky is now using his experience to coach startups on fundraising and business strategies. According to his company Eagle Ventures, Pirchesky has raised over $45 million in his 35 years of structuring deals. In a recent guest post on the site Pittsburgh Ventures, Pirchesky breaks the art of the elevator pitch – a tool every young entrepreneur needs to learn to use – into an exact science tailored for the best results.

Chris Dixon: How much seed money should I raise?

9 Mar

Chris Dixon, serial entrepreneur and seed-stage investor:

“… You should try to answer the question: what is the biggest risk your startup is facing in the upcoming year and how can you eliminate that risk?  You should come up with your own answer but you should also talk to lots of smart people to get their take (yet another reason not to keep your idea secret).

“For consumer internet companies, eliminating the biggest risk almost always means getting ‘traction’ — user growth, engagement, etc. Traction is also what you want if you are targeting SMBs (small/medium businesses). For online advertising companies you probably want revenues. If you are selling to enterprises you probably want to have a handful of credible beta customers.

The biggest mistake founders make is thinking that building a product by itself will be perceived as an accretive milestone [emphasis added]. Building a product is only accretive in cases where there is significant technical risk — e.g. you are building a new search engine or semiconductor.”

Read the rest of Chris’ What’s the right amount of seed money to raise? Also see our post, How do we set the valuation for a seed round?

If I had to stuff my answer to this question into one sentence, I would say: “As much as possible while keeping your dilution under 20%, preferably under 15%, and, even better, under 10%.” Raising as much as possible is especially wise for founders who aren’t experienced at developing and executing operating plans.