Last night we had a reception for the earlybird applicants to our coaching program and showcase, First Look Forum.  And though you may have missed out on the free wine, great food (thanks DWT!) and the chance to rub shoulders with the screening committee, some investor coaches, and alumni, we’re pleased to pass on some of the wisdom of the crowd.
CHEERS:

1)      First rule of the First Look Forum application: One-page max.

2)      Second rule of the First Look Forum: One-page max. That’s one side of one page. As Mark Twain says, “I didn’t have time to write you a short letter so I wrote you a long one.” We know it’s hard to distill months and years of your life into one page, but it’s a good forcing function—there’s nowhere to hide, and whatever your outcome with this program, you need to ask yourself and answer who’s your customer, how you’ll get to market, how you’ll make money, how you’ll scale and more.

3)      Have me at hello. Get your audience’s attention with a really compelling elevator pitch or tagline: 30 words or less.

4)      Get a second date. That’s the goal of a first date and that’s what this application is (or any executive summary).  That means you’re whetting your audience’s appetite, providing succinct but not exhaustive answers in each section.  Show evidence that you’ve identified the risks in your business, start to suggest how you have or will mitigate them.

5)      Show and tell? Share your assumptions about what will drive revenue. We only know one thing about financial projections—they will be wrong—but show us how you can make scads of money, don’t just tell.

6)      Tip your hand. Give us some insight into your “secret sauce.” Sell us on your sustainable competitive advantage—what can you do better than anyone else and what will stop them from doing it?

7)      The naked truth. Be crystal clear about what you do; if we get to the end of the application and still don’t understand the business, that’s bad.  You’re so close to your business that you can easily forget how to explain it to uninvolved third parties—and whether you’re pitching investors, courting business partners, or hiring new team members—you’ll need to be able to do that! Practice on your mom, your 8th grade kid, your neighbor.  And us. That’s what we’re here to do…help us help you!

JEERS:

1)      Send us a 10-page document.  We will only skim it, sorry to admit, or just quit reading after the 1st page.

2)      Tell us you have no competition.  Either you have no market or you haven’t done your homework.

3)      Say “we could explain our technology but then we’d have to kill you.” Investors won’t give you the time of day if they don’t know what you’re asking them to invest in.

4)      Submit a crazy hockey stick for financial projections.  An aggressive ramp is one thing, but orders of magnitude of uptake of your product, from one year to the next, is another.

5)      Overestimate, spin, obfuscate, exaggerate your traction. Integrity is key—give us the status of your company, product development, and market penetration.

INSIDER TIPS:

Two freebies, courtesy of FLF Alumni Jon Pincus and Bruce D’Ambrosio:

1)      Jon: When you’re getting coaching and feedback, ask questions back!  What am I missing? What are our obstacles? It turns out investors (and advisors) will think you’re super smart if you listen to their advice.

2)      Bruce: Fail fast. Iterate. Fail fast again. The trick here is perceiving the reason for your failure, being honest with yourself, taking advice to heart, and trying again.

We suggest you take Bruce’s advice: lather, rinse, repeat on your executive summary (the sooner you apply, the more feedback you can get between now and the 8/18 deadline).  And if you have any questions at all about the program, take Jon’s advice—ask! (rlovell@nwen.org, 206-902-4079). Now to take our own advice, we’re going to keep this to one page—signing off!

Syndicated with the blessing of xconomy’s Greg Huang– the author’s parting gift to Seattle and NWEN, as he returned to his Boston roots.

They are the holy triumvirate of the “gamification” movement here in Seattle. OK, I just made that up. But if you want to learn how to use video-game mechanics to enhance your business’s website, drive traffic and customers, and maybe boost your revenues, you could do worse than to talk to Scott Dodson, Neil Patel, and Keith Smith. Each is working on a different aspect, but it’s thanks to entrepreneurs like them—and more broadly, Seattle’s expertise in gaming and digital media—that the region has become an epicenter of activity in gamification of the Web.

Now we just have to be careful not to overdo it.

The two-minute history of gamification goes like this. Games have been around in some form since we were cavemen, possibly even before the inception of human language. Sports and competition are deeply ingrained in our psyche. Fast forward through board games, Dungeons & Dragons, and early console video games. Now gaming has gotten to the point where companies are using it to manipulate human behavior—namely, getting people to spend more time and money on the Web.

That’s according to Dodson, the co-founder of Seattle-based Bobber Interactive, who gave a brilliant talk on gamification at the NWEN Breakfast Buzz event last Friday. Dodson, who says he “gamified everything as a kid,” also talked about how adding a “game layer” has improved some absolutely vital functions in society, like air traffic control (through graphics and a game-like interface). It has also led to effective and economical ways of driving behaviors through things like Boy Scout merit badges and frequent flyer mileage programs.

But when it comes to the Web, adding game mechanics—like keeping score of points earned through various activities on a site—is all about the game metric (virtual currency), persistence (things carry over between visits), progression (do more and you earn badges or levels), and what Dodson calls the velvet rope (a certain amount of exclusivity and scarcity). Some early examples: Priceline (“you can win,” he says) and Google image labels. About 20 million Google image labels have been created by people playing a kind of matching game for a small reward. Another point he made is that games are fun and all, but tying game mechanics to real life is where the real payoff could come.

Some more recent examples of gamified websites or related services: Foursquare (of course), LinkedIn (which uses goal completion to urge people to finish their profiles), CauseWorld, MyTown, GroundSpeak, Urbanspoon, DailyBurn, Swoopo, Lockerz, Seriosity, Ribbon Hero from Microsoft, Mindbloom, and, yes, Bobber Interactive (Dodson’s financial services site). Meanwhile, DevHub, made by EVO Media Group, recently has added game mechanics to its website-builder product trying to become the go-to software platform to help companies add game mechanics to their websites. As I understand it, the main goal of this sort of gamification is to strengthen customer loyalty, not so much acquire new customers—though that might be a side benefit.

To that point, Neil Patel, the search engine marketing expert and angel investor, posted some interesting advice on his blog today about gamification. Essentially, he says game mechanics, if done properly, can improve a site’s optimization for search engines. In other words, you will rank higher on Google or Bing if you make your site more addictive. You can do that by adding scoreboards, rewarding people who comment and therefore add engaging content to your site, and giving heavy users certain privileges.

Any talk of addiction rings warning bells, of course. It also makes me think more about what Silicon Valley startup guru Dave McClure told us recently about appealing to consumers’ “reptilian psyche.” What he meant was that smart Internet entrepreneurs should engage with consumers by tapping into their primal urges for things like sex, money, and power. So add competition and games to the list of deep drivers of behavior. But with that comes the responsibility not to get carried away to the point where our children, and people in general, can’t do anything without being rewarded. (Sorry, my own editorializing here.)

Dodson, for his part, is well aware of the dangers of gamification. While he proudly says there’s nothing he can’t gamify, he sees efforts by Las Vegas casinos to install video screens as an extra layer on top of slot machines, for example, as falling into the “‘gamification for evil’ category.” When I caught up with him after his talk last week, he admitted that gamification in moderation is a wise philosophy. What’s more, he doesn’t see the game-mechanics trend as taking over the Web indefinitely.

“This is probably a 10-year trend,” he says. “Then it will morph into something else.”

Gregory T. Huang is Xconomy’s National IT Editor and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com, call him at 617-252-7323, or follow him at twitter.com/gthuang.

Inspired by my friend and colleague Andy Sack, who suggested that poker is the new golf, I’d like to see that blog and raise it a post.  Having just joined the crew at Poker 2.0 for socializing and psychological warfare on Tuesday, I couldn’t help but notice the striking parallels between startups and poker.

Style of play: This is a mix of personality and your own goals for the evening (or your startup).

• In my case, my goals were fourfold: have fun, don’t buy in again more than once, don’t get pissed away on the blinds, and go down in a blaze of glory.   This is partly because I have no poker face whatsoever, and partly because I’m cheap. I’d characterize myself as a bootstrapper– more of a lifestyle business if you will.  Totally self-funded, lower stakes, and no one’s money to lose but my own.
• Some players who shall remain unnamed appeared to have some angel funding.  They definitely wanted to stay in the game and have a reasonable exit– but clearly had more money to spend than I did, as they kept rebuying. Am guessing their angels were pretty passive– most professional angels I know wouldn’t have continued to back some of those horses– and I had to wonder if they might have played a little smarter with less money to burn.
• Big Dog Bob Crimmins played smart but was swinging for the fences.  An experienced poker player (and startupper), he went after a VC-sized market and at least 10X return on the invested capital, and got it.  He didn’t flinch when the ante climbed to double the initial buy-in for the game, and narrowly missed taking it all (came in second).

Is this the hand? Play the man, not the cards.  But having a good hand doesn’t suck.

At my level of play (and that whole heart-on-my-sleeve read-my-face-like-a-book handicap), I actually need decent cards to give me the confidence to take calculated risks.  The more sophisticated players weren’t just playing their hands but reading those of their opponents,  and could have turned any hand into a winner, either bluffing or just flat-out buying the pot.  Hold that thought for a minute.

If you’re new to startups, you’ve got the short stack.  Low on money and street cred, high on passion and drive.   Let’s assume you’ve fallen in love with your idea– why else would you be doing it?  I’ve been playing poker for a few years now (I’m fairly certain that it’s a graduation requirement for the MBA to be conversant in both discounted cash flow analysis and Texas Hold ‘Em). But when I first started playing I was a sucker for pocket 8’s, and got kicked in the teeth every time.

In my line of work (and even more so as Program Director at the Alliance of Angels) I’ve coached over 600 companies on their business plans– and met some incredibly talented entrepreneurs with some less than stellar “hands.” If I’d developed rapport with an entrepreneur, I might suggest: “You’ve got the short stack.  And you need to ask yourself– is this the hand? Do you really want to go all-in on a two/eight off-suit?”    Know when to hold ‘em, know when to fold ‘em.   Savvy entrepreneurs can be great players, but need to stack the deck in their favor– if you don’t have the cards, deal yourself another hand.

And for the record, I’m happy to say my Poker 2.0 strategy worked out pretty well.  I satisfied my own personal goals: drank some fine Gentleman Jack whiskey, spent five hours with awesome people,  and as three full tables went down to one,  I was in the final six players.   But I played it my way, and it sure didn’t hurt to have pocket aces and the inside straight draw to take two big pots.   Big Dog Crimmins, you throw a great party.  And for the rest of us– in startups and poker– Live to See Another Hand.

Author’s note:  Crimmins out-played almost all of us– but if you want to know his tells, I can be bought for a shot of whiskey.

Full disclosure: as a mentor for TechStars, this author is not a completely unbiased observer…but now that we’ve gotten that out of the way,  here are a handful of reasons to get your application in today, and a few free tips.

1) Those 10 lucky entrepreneurs who are accepted will enjoy an in-depth, three-month mentoring program and a truly talented cohort of startuppers.

2) Resources include seed funding ($6K per founder), access to advisors, and exposure to area investors in a showcase at the end of the program (every major Puget Sound vc has backed this endeavor!)

3) Applications are due June 1, but if you apply in time, you may also get to attend TechStars for a Day on May 24.

Having read some 25 applications over the course of the last week (fear not, we’ve got 4-5 sets of eyes on every submission), here are a few observations for the good of the order:

1) Have me at hello The application is fairly informal and incredibly streamlined, but do take some time to think through that initial tagline. Starting with a clearly-articulated value proposition sets the stage and gives us the proper context for evaluating the merits of the business plan.

2) Help us help you. TechStars has a national– and international– reach, but we’re really looking for entrepreneurs who can take full advantage of this summer-long program. By no means need your company be based here, but plan to spend some significant time in our fair city, and let us know that you and your co-founder(s) are ready, willing and able to commit the time.

3) Speaking of co-founders, don’t go it alone. As much as TechStars was created to be a co-founder of your business, stack the deck in your favor by joining forces with another driven, talented co-founding entrepreneur, who shares your vision and rounds out your skill sets.

Get the dets on the TechStars site. Best of luck!

Yesterday afternoon, as I listened to Connie Miller of Pivotal Presentations describe the visceral, physical and sheer animal angst associated with public speaking, I couldn’t help but feel that Robert Palmer was really on to something.   Your throat is tight, you can’t breathe, you might as well face it: you’ve got stage fright.  As Connie described to our workshop participants, it’s not at all uncommon to experience these symptoms and more when you face a crowd that, on some primal level, you fear will attack you. The good news is that unlike Palmer’s love addicts, you can be saved.  Below please find a few take-aways from Connie’s session (no substitute for her personal coaching and some highly interactive exercises she included in the workshop, but here goes).

1) Breathe. Yep, turns out you need oxygen for brain function, and to project your voice.  DO try this at home, kids: place on hand on your sternum, the other on your diaphragm (stomach region, for the non-biologists in the crowd). As you breathe in, your belly (not your chest) should actually expand.  This opens and elongates the air column, and is an incredibly powerful tool.  Next, as you exhale, count to seven out loud. When we get nervous we tend to take quick, shallow breaths…your voice can crack, sound shrill, or just fade away. Make sure your breaths are deep enough so that you can sustain this counting exercise and even punctuate the number 7.   Land on it with some authority. Go ahead, try it. I’ll wait.

2) Personalize. Get past that fear that a pack of bloodthirsty animals is ready to pounce by comfortably resting your eyes on a few individuals in the crowd.  We’re not talking about darting, furtive glances….you’ll look paranoid and actually make your audience nervous, too.  And it’s not about a staring constantly at the one smiling face in the crowd (see how long they stay smiling– ick).  Try focusing on one individual at a time, for long enough to complete a sentence (or two). The goal is to shift your gaze as you move onto the next thought.

3) Be clear and compelling. No secret that it’s important to say something meaningful, and to convey confidence in your convictions.

• Don’t do that Lloyd Dobler “nervous talking thing,” but know that it’s a basic human (or at least American) instinct to fill that uncomfortable silence with noise. Take a quiet moment when you get on stage, plant your feet shoulder width apart–yes, breathe–size up the room, and begin.
• Tell a story, involve the crowd, and use your body language to suggest that the very physical space in which you’re standing is where this riveting story occurred.
• When you answer questions, if you don’t know, don’t BS, say you don’t know. If you need a moment to collect your thoughts, it’s a good practice to repeat/rephrase the question (could actually be a benefit to the cheap seats in the back row who didn’t hear it the first time).  Many nervous presenters can be taken aback by questions, and literally take a step back….try leaning into questions from the audience and show you’re listening intently.
• Avoid the trap of text-heavy slides. The human eye won’t necessarily read top to bottom, left to right, so you may soon find yourself very disconnected from your audience.  If you have to have bullet points, she suggests bringing them in one at a time. And by all means, make them pretty (she points out we are animals after all, and drawn to color. I think I may have been a fish in a prior life– I like shiny).

As the workshop wound down and Connie took brave souls from the group to practice what she’d preached,  Sean Flynn commented “This is just like the advice I get on my golf swing.  If I work on one tip, I forget all the others.”  Fair point and to be expected!  Through repetition you’ll integrate one piece at a time.

And now for a little color commentary from the author:

1) Get over yourself. I’m not suggesting have some kind of out-of-body experience while public speaking, quite the opposite: you need to be incredibly present.  The point is that no one’s speeches are ever perfect– sometimes you, say, hurl a remote clicker into a guest’s bagel and schmear at Breakfast Buzz, for example– so don’t let the small stuff phase you.   Roll with it, laugh it off, and likely no one will remember those little flubs (except the woman in the second row who got a bit more than she bargained for with that bagel).   In addition to Connie’s tips, you’ll find your own way to get over this kind of anxiety.  My path was dance (other people’s choreography) and karaoke (other people’s songs)… as I was getting past my own teen (and, thirty-something) angst, I found it easier to do so by taking on some other persona and getting used to performing.  However, borrowing words and movements from others isn’t really sustainable in public speaking…as you need to:

2) Find yourself. Authenticity is a big deal.  Be sensitive to audience (knowing your audience is the golden rule for any performer), and avoid being overly technical or jargon-y when speaking to a broader group. Do your best to speak in their vernacular.  That said, use your voice, your vocabulary, your movement, to its best advantage.  It’s great to have role models and mentors– but take what you like and what works for you, and make it your own.

3) Be yourself. To humanize what can either be an impersonal or brutally animalistic experience,  don’t stop at finding those individuals in the audience,  bring yourself into the mix. It’s much easier to connect when you’re sharing your own, flawed humanity. If your instinct is to smile, do it. Laughter can work too (but try to stop short of giggling or the crazy-making Joker’s cackle).

Whether you take any of this advice to prepare for the Oscar’s, dinner with the in-laws, an investor showcase or industry event, hope to see you soon.  And I’ll buy a drink for anyone who rocks out Robert Palmer at the next techkaraoke (as we pour one out and honor that two-hit wonder’s memory). Much love.

We can’t resist the opportunity to give another shout out to the twelve companies who presented at our third First Look Forum event yesterday, and the whole community of folks who made it possible! Both John Cook of TechFlash and Greg Huang of xconomy did some incredibly thorough write-ups of the afternoon showcase, so we’ll just chime in with some context around the program itself.

What is this event anyway? The forum itself is the end of a two-month application, screening and coaching program, but we hope just the beginning of a new path for these diverse companies!  Our twelve participants receive mentoring from a pair of coaches (primarily investors, with a sprinkling of serial entrepreneurs), a presentation workshop, and a personal coaching session from Pivotal Presentations.  The “piano recital” at the end is a great place to meet potential investors and advisors, but past participants have raved equally about the coaching and the big day.

What do these companies have in common? Our theme is innovation. It’s not all IT or Web 2.0 all the time. Remember this event is brought to you by the organization that featured the founders of Bacon Salt as keynoters in our signature Entrepreneur University!  Every company selected to present in First Look Forum had a unique value proposition and was at an inflection point in their business:

1. a local business, profitable going concern for 8 years, changing the game and going national
2. a travel-oriented company re-emerging from hibernation and hoping to take the industry by storm
3. a graduate of the Founder’s Institute embarking on the fund-raising adventure
4. a grant recipient and perennial UW business plan competition participant who met their first investor at FLF!   (scroll down for their identities!)

What else? None of these companies had done the dog-and-pony show to the membership of an organized angel group, nor received venture funding, so First Look Forum was their coming-out party.  Are these companies ready for investment?  Many will be in the next 6-12 months. This may explain how we can attract investors from some 20 investment groups, including: Alliance of Angels, OVP, Seraph, The Tacoma Angel Network, Founders Co-op, Divergent Ventures, Ignition Partners, WRF Capital, Madrona Venture Group, Voyager Capital, Integra Ventures, Puget Sound Venture Club, Keiretsu Forum, Zino Society and more.  In addition to serving entrepreneurs with coaching and connections, we provide a service to the investment community in sourcing early deals for their organizations.

The flip side of the coin of having ’something for everyone’ is that not every pitch will resonate with every investor.  We support innovative entrepreneurs of every ilk and are happy to showcase the many local flavors!  The home of Microsoft, Amazon, Real Networks and Expedia has also enjoyed decades of innovation from Boeing and Starbucks… NWEN members reflect this unique potpourri.

What did we take away from the big day?

• Always be closing: We believe every one of these companies had “steak” (one, literally ground into dogfood and frozen)….but the audience voted with their coins for some of the pitches that really “sizzled.”
• Investors will vote with their feet. From my time with the Alliance of Angels, whether a company is in materials science or software, deals get done when they have that needle-in-the-haystack advocate who steps up to lead.  Being genetically pre-disposed towards match-making (yes, I’m a yenta), it was incredibly fulfilling to see investors huddling with presenters in corners of the room during our reception.   Successful entrepreneurs create their own luck, but we can help them get lucky by bringing together a diverse set of investors and deals, adding a healthy dash of showmanship and a soupcon of alcohol.

Answer key below. Congratulations to all the presenters, finalists, runner-up and grand-prize winner, and thanks to the entire community of volunteers, coaches, and investors for supporting the area’s innovators!

1. Darwin’s Natural Pet Products
2. Inside Trip
   
3. Zendorse
4. Empowering Engineering Technologies
   

If you happened to miss Friday’s Breakfast Buzz on start-up hiring, Ben Straughan (former NWEN chair, volunteer co-chair of this event, and special guest MC) put together a great check-list of take-aways below.  Some of these issues are timeless (check out this blog post I did on Seattle 2.0), many bear repeating, and other points are unique to the start-up environment.  Read and enjoy!

Writes Ben: “Friday’s event was hosted at Microsoft Bellevue’s office, and hit some key topics for start-ups and growth companies.  Alex Algard, founder and CEO of White Pages, and Ben Elowitz, CEO of Wetpaint, paneled this session moderated by Kathi Jones of Swift HR Solutions.  Some of their  points resonated with me:

• In hiring, including the early days, each emphasized self-starters people looking to improve both themselves, and the company, rather than the most experienced person for the position.
• Close friends and prior business contacts, that common source of funding for so many startups, also represent a good source of early executive team members.  These people know and trust you and your vision enough to get on board early when an outsider sees the risk as high.
• Hire those whose strengths compliment the founding team’s weaknesses. This requires a level of self-awareness and confidence many find difficult, but can greatly increase  the chance of your company’s success.  (And note that if you hire friends/prior business contacts you increase the chances you’ll know the person’s strengths well enough to achieve this.)
• Remember:  the early-stage community in Seattle is small – relationships made at a startup can and often do last a lifetime.
• When competing with well-funded established competitors to hire a candidate, remember this:  while startups face a cash flow shortage, they often offer the candidate an unparalleled opportunity to contribute to company success and to grow personally.  For many motivated self-starters, this is more valuable than the difference in compensation.
• Ben Elowitz described how WetPaint emphasized the process – down to scripting the approach and to diligently seeking the candidate’s motivation.
• Alex talked about how many desirable executives are not actively looking but rather “passive” participants who might be introduced to the company by an employee or other mutual friend.  In this regard, Alex viewed the social network opportunities as a great way to do recruiting.

Key takeaways from each:

• Alex:  No matter how badly you think a position needs filling, he recommends waiting for the right candidate rather than settling with an under-qualified hire.
• Ben: he focuses on continual improvement in hiring processes and recommends founders and management constantly seek to improve the hiring process.  (It struck me that Ben’s approach mirrored the drive to constantly improve that he seeks in his hires.)
• Suggested reading:  Ben mentioned “Who: The A Method for Hiring “by G.H. Smart, as a valuable resource in the hiring process – just a little tidbit for you entrepreneurs.

Thanks to Ben, Alex and Kathi for their time and sharing their insights!”

This reporter would also like to thank Ben Straughan for the post, and remind all for the good of the order:

• Hire slow, fire fast
• Hire for fit (if you hire a jerk, they create “little jerk factories“)
• In this two-degree-of-separation town, use referrals and check references
• Consider “getting the band back together” for your next project!

NWEN is thrilled to welcome the Seattle Startup Digest—it’s another terrific resource for entrepreneurs, and one that can help startups make the best use of their limited resources by recommending compelling, relevant and fun events. Seattle [Startup Digest] is a weekly email digest of the best entrepreneur, tech and social media events in the greater Seattle area. Each email also offers resources and information for startup founders and helps to strengthen the local entrepreneurial community. around town.

• View their mission statement.
• Sign up to receive Seattle [Startup Digest].

In partnership with the Startup Digest, we wanna make you famous. Blog much? Like to write hard-hitting, pithy prose about entrepreneurship? Want to share new marketing techniques, funding adventures, technology platforms, trials, tribulations and tips with adoring fans? We want YOU (well, your posts) to be a bi-monthly guest-star on the NWEN blog.

How to play: Tweet a link to your blog, using hashtag #SDNWEN.

• Jaremy Rich (SD) and Rebecca Lovell (NWEN) will select the top 6 submissions, and each of those will get free entrance to our Cinco de Mayo “Pub Night” at Ventana (that means May 5), or our May 14 Breakfast Buzz (your choice). And NWEN will syndicate your blog content up to twice a month** Get your tweet in by end of day 4/16.
• NWEN and SD subscribers (over 7000 in aggregate) will then weigh in on their favorite, and the winner will not only receive the celebrity guest posting gig, but free NWEN membership for a year. The community will have two weeks to vote….polls close 4/30.
• We’ll announce the winner Monday, 5/3 and hope to celebrate with everyone at Pub Night! http://bit.ly/NWENidol

*Finalists in the NWEN/Startup Digest entrepreneur blog contest have an opportunity to have any of their blog posts sundicated up two twice a month on the NWEN blog. We will not synicate your posts without your epxress consent or prior permission. Have more questions about the contest? Please contact Jaremy Rich (jaremy@thestartupdigest.com) or Rebecca Lovell (rlovell@nwen.org).

A gloves-off debate at our March 12 Breakfast Buzz on “Funding: The Good, the Bad and the Ugly” inspired me to dust off my old Seattle 2.0 post on the topic, and the first-date interview questions below are as timeless as such classics as “So do you have any siblings?” or “How long have you lived in Seattle?”

Friday morning, our moderator, the ever-provocative yet still charming Dan Shapiro, asked panelists Charles Seybold and Robbie Cape about what to seek out/avoid in investors. Most of the discussion centered on angels, but our fearless moderator had a couple comments on approaching VC’s. I’ll paraphrase below:

1. Size matters. Don’t be shy, go ahead and ask about fund size. And if you’re feeling bold, ask how much of the fund remains to be deployed. This should signal a bit about whether the size of your round fits their fund profile.

2. Timing is everything. You’re on a roll now, so ask about how far along they are in their fund (8 years in on a 10-year fund? They’ll have an expeditious exit on their mind, which may be better-suited for later-stage deals or quick flips). And on the subject of timing, ask about their preferred investment stage…seed? early? growth-phase companies?

Now to reprise the David Letterman-style Top 10 list. Knowing that your powerpoint presentation is like a first date with angels, usually the goal is to get a second date. But there are lots of fish in the sea, and I’ve found it a good idea to phone-screen potential suitors before that first date. Ask more than “is your money green?” Try the below:

10. What are your fees to entrepreneurs? Your time is money, but money is money too…make sure the fee structure is transparent. The range of fees is significant, from under $200 up to $6000.
9. No, seriously, what are your fees? This is the part where you ask about application fees, presentation fees, cut of proceeds, or any additional obligations or hidden fees throughout the process.
8. How long does it take to close the deal? From submitting an application through due diligence, getting funding from an angel group may take longer than you expect (or like). Turn-around times range greatly from group to group, and expectations should be set for how much time will be required, and over what period of time.
7. How much money did your forum invest last year? Not how much investment did your network facilitate, not “how much did your members invest in start-ups in general”, but “what was the dollar figure of investment made only by your members in deals that you screened?”
6. In what stage of company does your forum invest? What is your profile of investments by industry? If you make the tough decision to seek equity funding, one of the perks is that professional, active angels want to invest not just their money, but their time…and can be a much-needed shot in the arm to your advisory board. Find out the group’s experience with high-tech, consumer, retail, or real estate industries…and seed, early stage, post-product, post-revenue, or growth stage companies. Does the group have members who both understand and have an appetite for your deal?
5. What is your track record? This can be a tricky one, as angels invest individually, at different times, but beware fuzzy math. Investors (and entrepreneurs) get returns upon exit, not with a VC round.
4. Of the companies that presented, how many received funding from your members? Don’t be shy about asking for the average and range of investment either.
3. If I present to your group, how many investors will be in the room? This is an opportunity to ask not just about attendance but about their membership base….accredited investors? Active and experienced angels? Or service providers and hangers-on?
2. What’s your deal flow? How many companies do you meet with every month? How many companies presented to your organization last year? Since your organization’s inception?

And as much as results matter, so does the experience…..so:

1. Can I contact any companies who have recently participated in your process?

For some best practice recommendations, check out this link on the Angel Capital Association web site. But don’t just read about it– ask! What they answer– and whether they answer– will speak volumes.

On a personal note, for a first date, the author recommends coffee or happy hour, never dinner. If you like the date, you can always have dinner afterwards…but if you start with dinner, you could be in for 90 minutes of sheer misery.