SalesCrunch Blog

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Mark Suster joined us a couple of weeks ago at an event called How to Design Stunning Sales and Investor Presentations with Jan Schultink.

This video is Part 4 of Suster’s discussion on The Important of the Narrative, the question and answer session. There was so much great knowledge shared that evening from Mark, Jan and Sean that we will be posting different segments each day along with the transcript from that segment.

Part 1 of Mark’s talk here: Mark Suster: The Importance of the Narrative.

Part 2 of Mark’s talk here: Mark Suster: Earn Your Credibility with VCs

Part 3 of Mark’s talk here: Mark Suster: Great People Do Great Things

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PART 4 – Q&A

TRANSCRIPT:

MALE 1:  Is it fair way to triangulate to use AngelList even though your account was shut down or you took it off?

MARK: I didn’t take mine off . Bryce did. Bryce took his off.

MARK:  I don’t think AngelList is a particularly good way to triangulate.  I love the guys at Angel List I’m quite close friends with them. I believe in what they’re doing.  But here’s the deal, in public stock market world you take private companies that go public too quickly often falter because a lot of the information you have should stay private until you have predicable revenue, profit, growth.  You take a company public too quickly and you falter, you’re toast, okay?  So these days people coach you to not go public too early.   I think there’s such thing as going on AngelList too early, because the average pitch, you’ll go do it six to eight times, and you get so much feedback from doing it six or eight times that you triangulate your pitch, right? Your pitch gets better and better and better when you get feedback. At that point if you have a few anchors who have committed to your round then you could use AngelList to market it more broadly.  I don’t think it’s that effective at pressuring people to move fast.

I will tell you VCs – not being disrespectful to AngelList – especially if I have webcams on me.  (Smiling) I love Angel List. They are great.  No, but the truth is, it’s a great platform for raising Angel and Seed money and use it that way. Sometimes when a VC sees a deal on there it’s like, ok well maybe this isn’t a VC deal.  And I think there’s an error that Angel List has a plan to change that. I’ve talked to them about that. I think they will change it. They can change it.  I told them they need to do more private, person-to-person interest through AngelList rather than public; I think that public exposure is bad.

MALE 2:  I want to ask you about advisory boards.

MARK: Yes.

MALE 2: Do you like being asked to be on advisory boards?

MARK: I like being asked but I don’t accept ever.  So…

MALE 2:  Who does?

MARK:  Who does?  Well I will just tell you VCs don’t do it.  We don’t do it because we have so many time commitments for the boards that we do sit on and a fiduciary responsibility to our LPs to put on our activities into the things that are earning our money.  The advisory boards don’t do that. I mean it’s a way to try to put some shares in my pocket and I’m not interested in doing that.  Great people for advisory boards – the thing I recommend most – are people who are very pertinent to your industry, who could be helpful in giving you introductions, giving you feedback on what you’re doing, who can establish credibility in what you do.  Because if I can say that I don’t know… Jim Robinson or James Robinson III who was CEO of American Express, but actually he’s in the VC fund but let’s say he wasn’t.  If I could say he’s on my board of advisors, that is  - okay, he has agreed to put his name against this, that establishes a certain credibility.  So that would be what I would love to do and I wouldn’t do too many board of advisors.  I’m on the record of saying I think most board of advisor are a waste of time and a waste of options.

Two more questions.

MALE 3:  What kind of stake, when you base a stake in the company, how do you compensate the board of advisors?

MARK: Normally its .25%.

MALE 3:  For a year? Annual or in general?

MARK: Look, I think it’s so dumb because it’s never going to be a meaningful amount of money to them anyway.  But that’s about the going rate. You can vest it if you want, but it’s so diminomous. If it’s a person of stature, I would just give it to him outright.  And if they don’t work out, you lost a quarter point.

Last question (points at the back) in white.

MALE 4: Given that this is a sales-oriented, if you have you consumer startup with solid traction in the business side and sales side, and not a product  yet or no traction on the consumer side, is that something that you see as Series A fundable… fundable?

MARK: Define traction?

MALE 4:  We have customers that have signed up for a free trial but arent paying…

MARK:  You have customers. Look.  Anything – the biggest myth, and I hear this all the time:  VCs told me that I needed to have revenue or they wouldn’t talk. That just means “No”.  Some VCs have rules about revenue and if they do and you don’t have revenue, don’t talk to that VC.  But the reality is most VCs have a visceral feeling about whether they like you or whether they like your idea and they’re willing to fund if they feel they’re going to miss out.  So even, I mean having some traction, some customers, some examples helps get them over the hurdle of “Will the dogs eat the dog food?” and that’s what you want to convince them.

So I’m going to wrap up by saying two things:

One is, if you want to go deep, anyone who wants to go deep, come tomorrow night. I’ll be here for an hour and a half. I’ll go as deep as you want in Q&A.

But I wanted to say two things, one is about Sean and the other is about Jan.

About Sean, I want to say the single biggest missing skill in startups is sales skills.  I say it publicly all the time. I’m delighted that SalesCrunch exists.  This knowledge needs to be in the marketplace.  Startups are started by product people mostly, sometimes by MBAs, sometimes by techies, very seldom by salespeople and very seldom do you start it with salespeople as part of your team, and it’s such an important skill.  I like to tell young people coming out of university: if you can take two years to sell before you do the things you want to do in life, do it.  Because later in life you’ll never go back and learn those skills and they are the most valuable.  Fund raising is selling, getting customers is selling, getting biz dev is selling, getting the press to write stories about you is selling.  Convincing your wife to go away to NY for a week is selling.  Life is sales and my wife always tells me to stop selling.

And about presentations – narrative, simple, visual, don’t get in the weeds; if you have really detailed stuff, put it in the appendix.  I had breakfast with Jan.  Jan and I talk over my blog and over Twitter all the time.  I think what he’s doing is phenomenal.  I’m a very big believer in people helping coach on that kind of storytelling; it will have an impact on your business.  And I had breakfast with Jan and I saw his deck and I said to him “I need to come tell them how important what he does is.”  So really take it seriously.  The deck is great. Have a good time, and I apologize that I need to race because I have a dinner but I hope to see some of you tomorrow night.  Thanks for having me.

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Mark Suster is a 2x entrepreneur who has gone to the Dark Side of VC. He joined GRP Partners in 2007 as a General Partner after selling his company to Salesforce.com. He focuses on early-stage technology companies.

 

Stay tuned for the videos from the event with HubSpot at MIT in Boston to come soon!

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Topics: presentations, relationship building, storytelling, VC