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How to Accelerate Your Sales to Private Equity, Venture Capital, and Hedge Funds

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How to Accelerate Your Sales to Private Equity, Venture Capital, and Hedge Funds

How to Accelerate Your Sales to Private Equity, Venture Capital, and Hedge Funds

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  • 1. The Virtual Handshake: How to Accelerate Your Sales to Private Equity, Venture Capital, and Hedge Funds David Teten Teten Advisors, LLC Teten.com info @ teten.com New York, NY http://www.flickr.com/photos/roblee/133498854/ © Teten Advisors, LLC 2008. All Rights Reserved - Privileged and Confidential
  • 2. Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 3. Intro Tradition Social Media Tells Network Next Steps David Teten Biography • Currently: independent investment banker (Teten.com), specializing in advising private equity and venture capital funds on: accelerating deal flow, portfolio company executive optimization, corporate training, and due diligence • Managing Director, Evalueserve, through September 2008. 2,500-person research firm. • Founder and CEO, Circle of Experts (investment research firm), sold to Evalueserve • Founder and CEO, Teten Executive Recruiting, sold to Accolo, #42 on 2007 Inc. 500 • Founder and CEO, GoldNames, domain name investment bank, based in Israel • Technology M&A, Bear Stearns. Largest group by revenues. • Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online (TheVirtualHandshake.com) • Harvard MBA, Yale BA, both with honors • Contact: info @ teten.com © Teten.com
  • 4. Intro Tradition Social Media Tells Network Next Steps Why should I care about social media? •Because 3 out of 4 Americans use social technology. (Forrester, The Growth Of Social Technology Adoption, 2008) •2/3 of global internet population visit social networks (Nielsen, Global Faces & Networked Places, 2009) •Visiting social sites is now the 4th most popular online activity—ahead of personal email. (Nielsen, Global Faces & Networked Places, 2009) •Visitors spend 5 million minutes per day on Facebook. (Facebook) © Teten.com http://www.slideshare.net/mzkagan/what-is-social-media-2005829 . http://www.flickr.com/photos/sreejithk2000/2385193167/sizes/l/
  • 5. Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 6. Intro Tradition Social Media Tells Network Next Steps From Warm Relationships to Ice-Cold © Teten.com http://flickr.com/photos/jwthompson2/88090871/
  • 7. Intro Tradition Social Media Tells Network Next Steps Warm – Lukewarm – Ice Personal Relationships Red = tech companies Green = VC firms Blue = service providers (lawyers, PR firms, real estate agents, focused on tech). © Teten.com http://blog.socaltech.com/2008/06/
  • 8. Intro Tradition Social Media Tells Network Next Steps Warm – Lukewarm – Ice Intermediaries IPO Deals in California Information Retrieval Services Industry Each tie=firms worked together on at least one IPO Length of tie line inversely proportional to # IPOs worked on • Lawyers • Private Bankers • Accountants • Recruiters • Insurance brokers 1999 IPO Deals from IPOData.com, © Teten.com cited in “Social Networks in Silicon Valley”, Castilla, Hwang, Granovetter, and Granovetter, http://web.mit.edu/ecastill/www/publications/CastillaExtract.pdf
  • 9. Intro Tradition Social Media Tells Network Next Steps Speaking at Conferences © Teten.com http://www.flickr.com/photos/programmerman/2315566040/sizes/l/
  • 10. Intro Tradition Social Media Tells Network Next Steps Personal Life © Teten.com
  • 11. Intro Tradition Social Media Tells Network Next Steps Warm – Lukewarm – Ice Marketing Collateral •PR •Newsletters •White papers © Teten.com Westshore Capital Partners; Weinbach Group
  • 12. Intro Tradition Social Media Tells Network Next Steps Warm – Lukewarm – Ice Cold Calling http://www.flickr.com/photos/23439761@N03/3258313816/sizes/l/ © Teten.com
  • 13. Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 14. Intro Tradition Social Media Tells Network Next Steps Firms Fail to Capitalize on Their Internal and External Networks • Knowledge is not readily searchable • Knowledge is not retained when employees leave • Relationships are not visible • Relationships are primarily tied to colocated people • Millennials expect and embrace social technologies © Teten.com Forrester Research/David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online. http://www.flickr.com/photos/pagedooley/2494191157/sizes/l/
  • 15. Intro Tradition Social Media Tells Network Next Steps “Web 2.0 is the business revolution … caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform. ” - Tim O’Reilly http://en.wikipedia.org/wiki/Web_2.0, http://flickr.com/photos/oliversteiner/326174717/sizes/o/ © Teten.com
  • 16. Intro Tradition Social Media Tells Network Next Steps Social Media © Teten.com http://www.flickr.com/photos/briansolis/2735401175/sizes/l/
  • 17. Intro Tradition Social Media Tells Network Next Steps Benefits of Online Networks • Searchable • Crosses boundaries of time and space • Passive presence • Ease of forming groups • Reduced time and expense • Greater visibility © Teten.com http://www.flickr.com/photos/uaeincredible/3333223048/sizes/o/
  • 18. Intro Tradition Social Media Tells Network Next Steps The Virtual You • Corporate • Personal • Your digital trail © Teten.com
  • 19. Intro Tradition Social Media Tells Network Next Steps The Future of Online Networks • Online business relationships mainstream • Technology available now • Early adopters reap maximum benefits • Technology required to overcome some barriers, but education is solution • Systems that address privacy and time concerns will be leaders © Teten.com http://www.flickr.com/photos/extraketchup/748452643/sizes/o/
  • 20. Intro Tradition Social Media Tells Network Next Steps Transition: Web 1.0 Web 2.0 Parameters Web 1.0 (Read) Web 2.0 (Read-Write) Governance Top-down Bottom-up Machine to Machine and People to Communication Channels People to Machine People Information Discovery Search and Browse Publish and Subscribe Information Retrieval Transactional Relationships Portal, Commercial Information Aggregation Micro-Aggregation Aggregators Marketing, Selling Push, Contextual Conversational, Personal Content Control Publishers, Aggregators Content Authors Content Structure Documents, Pages Tagged Objects Applications Closed, Proprietary Open, Standard-based XML, AJAX, RSS, PHP, MySQL, Technology HTML, Solaris, Oracle XQuery © Teten.com Partially sourced from: “Web 2.0 the Living Web and Putting “We” in the Web”, Bebo White, University of San Francisco (http://www.rthk.org.hk/mediadigest/20060915_76_121128.html)
  • 21. Intro Tradition Social Media Tells Network Next Steps Powerful Emails • Direct E-mail • E-mail Signature http://www.flickr.com/photos/misbehave/2352753067/sizes/l/ © Teten.com
  • 22. Intro Tradition Social Media Tells Network Next Steps Toolkit • Email groups file • Profiles file • Standard emails © Teten.com http://flickr.com/photos/neilt/2517652/sizes/o/
  • 23. Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 24. Intro Tradition Social Media Tells Network Next Steps Tells of Potential Clients • Investors with particular industry interests (industry or geography) • Investors where relevant contact person has recently changed © Teten.com
  • 25. Intro Tradition Social Media Tells Network Next Steps Fund Performance: Rapid growth © Teten.com http://flickr.com/photos/laserstars/908946494/sizes/o/
  • 26. Intro Tradition Social Media Tells Network Next Steps Fund Performance: Underperforming © Teten.com http://flickr.com/photos/carve/2856365431/sizes/l/
  • 27. Intro Tradition Social Media Tells Network Next Steps Selected Databases © Teten.com
  • 28. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 29. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Network Valuation Formula Ch = Character Co = Your Firm’s Competence R = Relevance of the contact S = Strength of your relationship I = Information N = Number of people D = Diversity N = D * ∑ (Chn*Con *Rn* Sn*In) n=1 © Teten.com David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
  • 30. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Balance of Strength and Numbers Average Strength = Minutes Available / Person Number = # People therefore… Average Strength * Number = Total Minutes Available vs. © Teten.com
  • 31. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Biography Analysis Software © Teten.com
  • 32. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Biography Analysis Software © Teten.com
  • 33. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Case study: Daniel Zumino •Prominent French angel investor •November 1999: Sent mail to Stanford GSB alumni list seeking capital for startup •March 2000: Raised $8m through referral from alum © Teten.com David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
  • 34. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Website © Teten.com
  • 35. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Relationship Capital Management Software Relationships See which colleagues ranked by have best Strength relationships to target Email traffic patterns, address books, billing Privacy Access systems, employment Layer configured history, etc. for firm’s culture Leverage Software, Contact Network Corp., others…. Contact Network Corporation (ThomsonReuters) © Teten.com
  • 36. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Find the Funds • All investors • Private Equity • Venture Capital • Galante’s • Pitchbook • CrunchBase • Grey House • Eurekahedge • PWC MoneyTree • VentureXpert • TheFunded • VentureDeal © Teten.com
  • 37. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Multiple Media • Phone • Email • Instant messaging • Internet telephony (Skype) • Web conferencing • SMS • Twitter © Teten.com http://flickr.com/photos/re-ality/41676755/sizes/o/
  • 38. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from Business Cards © Teten.com
  • 39. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from Email and Files © Teten.com
  • 40. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from the Cloud © Teten.com
  • 41. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Targeting • Directly-relevant funds • Fast growth funds © Teten.com
  • 42. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity From Cold Calling to Warm Cold Calling Source of Lead Result Success Rate business directories, Low response company listings, Ice Cold Call rate company websites All of the methods above, plus virtual communities, blogs, Warm Cold Higher response job networks, email Call rate lists, biography analysis, etc. © Teten.com
  • 43. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Socialtext Wiki Case Study: Dresdner Kleinwort Investment Banking problem • Heavy dependence on email communication & meetings for decision-making solution • 5,000 wiki users benefits • Reduced meeting times by 50% • Reduced email traffic by up to 75% • Adoption outpaced corporate intranet usage within six months • Wiki today: 6,000 pages & 100,000 hits per month © Teten.com Socialtext
  • 44. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Gated Communities for Executives • IERGOnline.com • INMobile.org • Sermo.com © Teten.com
  • 45. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Gated Communities for Investors Private Equity Focus Public Markets Focus • ACG.org • FTAlphaville.FT.com/longroom • Angelsoft.net • SumZero.com • Finemrespice.com/subrosa • ValueInvestorsClub.com • Village.Albourne.com • Village.Albourne.com © Teten.com
  • 46. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Mailing Lists and Discussion Forums • Customize standard intro • Lurk before you leap • Dive in, but don’t splash © Teten.com http://flickr.com/photos/kaibara/1231278142/sizes/o/
  • 47. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Virtual Community Platforms / Social Network Sites • Groups.Yahoo.com • Groups.Google.com • Grouply • LinkedIn • Xing © Teten.com
  • 48. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Take One Step • By industry • By geography • By personal characteristics © Teten.com http://flickr.com/photos/extranoise/169187125/sizes/l/
  • 49. Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Major Expert Networks • Generalists • Specialty/Other Players • Gerson Lehrman Group • Evalueserve Circle of • Coleman Research Group Experts • DeMatteo Monness LLC • Intota • Guidepoint Global (Vista) • Kingfish Group • Primary Global Research • Medical • Primary Insight • MEDACorp (Leerink Swaan) • Round Table Group • Sermo © Teten.com
  • 50. Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Selling • Social Media • Tells of People and Funds You Want to Know • Client Network • Next Steps © Teten.com
  • 51. Intro Tradition Social Media Tells Network Next Steps Social Media is a better platform Parameters Face-to-Face Social Media Character Judge by a handshake SEC filings Competence Personal resources Enterprise resources Relevance Semi-random Focused, searchable Strength Limited channels Multi-media Detailed, current Information Poor visibility data Number Small Large Restricted by time, Crosses time & Diversity space space © Teten.com
  • 52. Intro Tradition Social Media Tells Network Next Steps Maximize Value of Company Contact Database © Teten.com http://flickr.com/photos/misterdna/49841409/sizes/l/
  • 53. Intro Tradition Social Media Tells Network Next Steps Maximize Value of Company Contact Database • Goal: Increase benefit Company receives from its global contact database, and identify new investment opportunities in doing so. • Process: – Gather data from individual executives’ contact databases (e.g., Blackberry, Microsoft Outlook) into Company central contact database. • Request from members of Company’s outside advisor network information about their high- value contacts, e.g., CEOs of companies with over $200m in revenue. – Run contact database against multiple Internet database providers (e.g., InfoUSA, Jigsaw, Spoke, etc.), in order to update and verify accuracy. – Call individuals on an as-needed basis to verify database accuracy. – Produce “Change Reports” indicating which contacts have changed jobs, since their change in status may correlate with a new investment opportunity. E.g., an investment banker at Bear Stearns may have moved to Citadel. The past Controller of a client company may now be CFO of another media company, which could become a client. • Deliverable: Accurate database of past and current relationships. Company team can reach out again to touch base with old clients/colleagues. • Estimated # person-minutes per updated contact: 20-40 minutes © Teten.com
  • 54. Intro Tradition Social Media Tells Network Next Steps Conference Attendance Optimization © Teten.com http://flickr.com/photos/oxfam/2087484701/sizes/l/
  • 55. Intro Tradition Social Media Tells Network Next Steps Conference Attendance Optimization • Goal: Maximize ROI on conference attendance. • Process: – Company team member identifies conference which he/she plans to attend. – Team member obtains list of attendees that meet given criteria, e.g., CEOs of companies with over $200m in revenues. – Cold caller solicits all attendees’ secretaries, and asks, “Do you have 15 minutes to meet with ----- from Company, who will be attending the ----- conference with you?” • Deliverable: Company investing team member has packed schedule of meetings. • Estimated # person-minutes per conference attendee: 30 © Teten.com
  • 56. Intro Tradition Social Media Tells Network Next Steps Any questions? Slides available at www.Teten.com Free copy of book available at TheVirtualHandshake.com © Teten.com