What I Wish I Had Known Before Pitching LinkedIn to VCs (2013) | Hacker News Reader

What I Wish I Had Known Before Pitching LinkedIn to VCs (2013)

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101 pointsmarvel_boy17 comments

Most of his points on creating a pitch deck are true in the limited sense that they help create a better story, but they are all ultimately second-order optimizations.

Unfortunately, in early-stage startups you see the pitching equivalent of "teaching to the test"--crafting pitch decks that are pitch-perfect but the underlying business is no business at all.

This has the particularly nefarious consequence that most of the feedback such a "pitch perfect" deck receives is stellar--except, of course, from the people who you really need money from.

The best pitch deck advice remains: 1. Build a company such that you don't need money. 2. Make it obvious that more money will help you annihilate the competition. 3. Don't pitch unless you think your audience would have to be insane not to invest.

Pitching (2) before (1) is a recipe for failure.

This is true for some companies, but not all. Arguably this is not even true for most "startups" in the VC/pg sense.

Companies that are not only software, or that need a lot of money to scale (not just to annihilate competition, but to scale) are common.

Note: let's not forget we're talking about a VC pitch deck, not an angel pitch deck. You should theoretically be past finding product/market fit, and be at the "scale really big" stage.

Companies that need a lot of money to scale are common, but very few are funded :(

Well, if you look at the notes on Reid's site[0], he says

> 1. we weren’t the natural leader of a market or technology trend that everyone was paying attention to,

> 2. we didn’t have substantial organic growth, and

> 3. we had no revenue.

It sounds like LinkedIn really did need that money. Reid was still able to raise a B round from Greylock probably because he was a known quantity from his PayPal days, and because Sequoia led the A round. The bigger lesson here is that much of the advice given by prominent Silicon Valley investors and entrepreneurs often doesn't apply to the rest of us, because we're not in the positions of privilege that they are.

If I were a repeat entrepreneur with a moderately successful exit, a current exec at AmaGooFaceSoft, or participating in YC, I would devour all the advice these people are offering. Otherwise, it's useless. Forget about an actual pitch, you're probably not even going to get a 5 minute phone call with a partner at Greylock. Why would you expend any time or energy on preparing in advance for such an unlikely event? You're much better off spending your time figuring out how to generate and grow revenue and profit (what running a business is actually about).

0: http://reidhoffman.org/linkedin-pitch-to-greylock/

Yes there are two paths for founders looking to raise VC money - a path open to insiders and the path open to outsiders. If you are an outsider don’t try raise money using an insider model.

The only time you want to be raising money is when you don’t need it.

In my experience, your point 1 is quite true, but not totally. I have seen that VC's are very open to companies which will eventually die without funding. But in that case, they are most interested in an elite team (this need not be previous experience - just some metric which makes you 'top 10' - whatever you define and justify that to be). So its either; make it sound like you have an elite team, or not need the money. or...

One of the best things I have seen to convince investors, assuming this is your first raise or seed round, is showing them 'interviews' with customers or potential customers - we have made that a central theme at Rinocloud - to do as much 20 minute Skype calls with current and potentials users - showing these to investors has been a massive success.

This is really not how things work in SV :(

If you are making money and some profit then it is much harder to raise money from VCs. Why? VCs will look your revenue and make projection of your growth. And projection will not be great.

Meanwhile linkedin, at least from my perspective and use (I am not a recruiter nor am I someone who is looking for a job) has totally lost it's way. It's not the same it was back when it started which was a genuine way to connect with someone that you knew or someone that you wanted to know. The connection spam is unbelievable a connection means literally nothing. I don't know how much of this has to do with Reid having his hand in so many other pots but it's ironic given this particular post.

It has little value for me as well. Growing spam is annoying and networks are diluted. I think they lost when they closed the API.

> Every product attempts to expand until it has API. Those products which cannot so expand are replaced by ones which can

That was the straw that broke the camel's back for me. Turning your back to the developer ecosystem is always a mistake as Twitter has also had to learn the hard way.

Totally agree, they've polluted their their network with spurious links. In a world where everyone is connected to everyone you loose the information content found in the network topology, and that network of relationships is where the real value of LinkedIn was.

While their growth tactics have pissed me off to no end (spammed my whole company once), I do see value in the product. I’ve found two jobs from LinkedIn and been contacted by recruiters at a number of companies I may want to work at. For me, the personal value seems greater than either FB or Twitter. Although personal connections tend to lead to the best jobs, for those starting out in a field this isn’t easy, and a more liquid market helps us all. I can’t imagine telling a recent grad not to put together a LinkedIn profile because there is no value. Certainly, this is more about the online resume hosting part than the network part, but I think the latter has some value too even if diluted. And the former is powerful because there are so many people in the network.

> The connection spam

AKA "growth hacking". It's interesting that, given a certain amount of time the start-up jargon always ends up having a negative connotation.

Someone mentioned it on another post recently, but I have seen recruiter spam drop off steeply in the last few months.

Better link on Reid's website: http://reidhoffman.org/linkedin-pitch-to-greylock/

What does investment thesis mean in this case?

As the world changes, strategies for making money change. Uber isn't an individual attractive business, it's an exemplar of how putting internet-connected sensors in every pocket allows new and improved marketplaces to be created, and marketplaces have proven network effects that lead to profit. When startups claimed to be "Uber for X," this is the investment thesis they were shortening.

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