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Raising Venture Capital for your Media Startup

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– Melinda Wittstock, Founder CEO, verifeed.com

Originally presented at the event, "Women Media Entrepreneurs - Making New Ideas Happen," on Sept. 12 at the National Press Club, Washington, D.C.

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Raising Venture Capital for your Media Startup

  1. 1. Trusted social intelligence for the enterprise Melinda Wittstock @Veriate @NewsiTnews
  2. 2. (and what happens when you don’t ) How to raise millions in VC dough … …and live happily ever after
  3. 3. (and perpetual fundraiser) Melinda Wittstock Serial Entrepreneur Award-winning Journalist Media-Tech Exec Social Media Maven Mother of 2 (plus a dog) MBA, SHK So how can I help?
  4. 4. Brands WHAT NOT TO DO: MY TOP 10 DON’TS
  5. 5. a Brands A little early tip for all entrepreneurs… THINK LIKE AN INVESTOR (and do the math)
  6. 6. Trusted social intelligence for the enterprise
  7. 7. …and its growing faster than Moore’s Law. Think about it. Brands THE AMOUNT OF DATA CREATED ON TWITTER & FACEBOOK TODAY IS MORE THAN THE DATA BEING CREATED ON THE REST OF THE WEB.
  8. 8. make better business decisions engage with contextual content identify and reward customers, sources, ambassadors Our mission at Verifeed To make sense of the world’s social conversations so enterprises can:
  9. 9. Why Verifeed is massively scalable Brands Publishers Financial $100 Bn US News Publishing & Broadcasting $1Bn+ Social software spend (Growing as fast as the data itself) Gartner, 2013 $1.3 Trillion US Financial Services $10 Bn Financial Ad spend 2012 $432 Bn US Consumer Goods $118 Bn Content marketing spend, 2013
  10. 10. How Verifeed makes money B2B Platform Licensing Enterprises pay recurring monthly fees on annual contracts with pricing tiers based on: ―Data usage ―Social sources ―Service level
  11. 11. Eliot BergsonTim Berglund Peter Harrison Renee Lewis Duncan WorkMatt ProhaskaDavid Lawrence Why we’re the right team to execute Paul Herzog Chief Architect Melinda Wittstock Founder & CEO ‘Hands on’ advisors BD/Sales ‘Growth Hacker’ Data Scientists, Product Manager Identified
  12. 12. Use Cases & Metrics Publishing: March Madness Challenge: Boost traffic, time on site Action: Publish relevant Tweets from/about the players and coaches on NBC TV affiliate Result: Time spent up from 10 to 26 seconds, Twitter referrals up 129% Brands: Dog Food Challenge: Find US customers/influencers Action: Filter Tweets about UK luxury brand & competitor products, consumer attitudes Result: Ambassadors identified; ‘intel’ guiding US launch marketing strategy Financial: Compliance Challenge: Assure Tweets are compliant with FINRA Action: Source and parse market-moving news for reliability & exclude Tweets with investment advice to eliminate liability. Result: Verifeed technology delivered 98% FINRA compliance
  13. 13. Verifeed: Brands Lily’s Kitchen Goal:  Identify influencers and ‘early adopters’ in U.S. market (focus NYC, CT, NJ) ahead of 2014 launch  Obtain critical ‘intelligence’ to guide marketing efforts Convert into paying customers Verifeed Platform:  Identify and qualify targeted ‘WOM’ influencers & customers  Capture key insights into pet owners’ motivations, desires, behaviors to guide launch marketing strategy in the US Q1/14  Enable direct interaction with targeted users & custom publishing to engage, reward and convert into customers
  14. 14. Pet Influencers on Twitter
  15. 15. Verifeed: Recruitment MTM Careers Goal:  Connect the right people to the right jobs via Twitter  Improve service to both job-seekers and employers to increase revenue Verifeed Platform:  Identify all relevant job ads on Twitter  Identify all people Tweeting about specific jobs/sectors  Match specific job ads to relevant job seekers by industry and job title  Capture key insights into job seekers and employer in the clean tech and ethical investing industries  Enable direct interaction with targeted users & custom publishing to engage, reward and convert into customers
  16. 16. How Verifeed IP is differentiated Verifeed’s algorithms and automated processes uniquely replicate what investigative and analytical journalists do to: — Identify patterns — Put developments in context — Qualify source reputation and expertise
  17. 17. Uncovers credibility of influencers Eliminates redundant, off-topic, search results Allows instant custom publication Enables real-time engagement/recruitment of users 100% Twitter fire hose, complex filters Soon automates discovery/contextual search Competitive Differentiation Twitter API Limited to 5% fire-hose & single-term searches by hashtag or handle, no engagement tools, analytics Social media management Twitter search engines Influencer assessment Broad social data search/analytics Social management dashboards, mediocre Twitter search, no source reputation/accuracy filters Focused on Twitter brand monitoring only, not content Focused on user influence (not credibility or expertise); not intended for search Complex search filters, analytics, dashboards; no veracity / reputation emphasis; price point too high Historic Twitter search Early warning for market moving news/trends
  18. 18. How Verifeed forces global growth Beach-heads first US verticals Up-sell with more social sources / data & features Increase market penetration Grow globally Sports Brands Add verticals Hiring Publishing Politics Financial
  19. 19. Timeline to Stage Execution ― Debuted 2013 SXSW ― Grew pipeline to 260+ in 2 weeks ― 62% wanted next steps post SXSW Market Validation ― Prove metrics ― Test use cases ― Find early adopters ― Incorporate customer feedback ― Average of 9 demo requests per day Product Paying Partners ― Convert pilots to charter revenue ― New use cases ― Up-sell new features ― Automated contextual alerts/discovery ― Add social sources ― Mobile SDK ― Enhance algorithms Platform Growth ― Expand sales, biz dev, product team ― Expand into next verticals ― Full price point ― Expand reach & revenue within each company ― Enhance ‘fact check’ algorithms ― Ongoing UX/UI improvements ― Reputation scoring MARCH 2013 PRESENT – 3Q-4Q 2013 1Q 2014 ―-Enhance UX/UI ― Expert scoring ― Automated @mention recruitment ― Automated pre-filled search Pilot Programs Product Product
  20. 20. Hire ‘Growth Hacker’/Deal Closer Engineers/Product Manager Support Data Scientist(s) Support Q4/13-Q1/14 Tech Roadmap Data /Hosting Costs Marketing/Sales Investment Sought $30K Monthly Revenue Jan 14 $5mm Run Rate Q1/15 $92mm Annual 2017 Q4/13 Q1/14 Enhance Reputation scoring, pattern recognition & other algorithms; UX/design; automated adaptive discovery Mobile X-Platform/SDK Social sources Expand / Scale BD, Sales, Engineers $500K+ Bridge $3.5mm+ Series A
  21. 21. Financials: Five-Year Projected 2012 2013 2014 2015 2016 2017 # Enterprise Deals Recurring Fees Ad Revenue Share TOTAL REVENUE Cogs Operating / Sales Gross Margin EBITDA Margin EBITDA $166k $163k ($329k) 9 $42.5K $42.5K $377k $389k ($711k) 47 $1.8mm $153K $1.9mm $2.3mm $2.6mm (21%) ($2.9mm) 175 $9.3mm $1.1mm $10.5mm $4.4mm $6.1mm 56% (1%) ($52k) 456 $28mm $6.2mm $34mm $10.3mm $12.5mm 70% 33% $11.8mm 776 $75mm $20mm $92mm $18.4mm $19.9mm 78% 54% $44.8mm Cash positive Q2/15
  22. 22. Thank you Melinda Wittstock | CEO & Founder 202 274 1479 Melinda @ Verifeed.com Twitter @Veriate Demo at Verifeed.com Trusted social intelligence for the enterprise
  23. 23. Brands WHAT NOT TO DO: MY TOP 10 DON’TS
  24. 24. $30K monthly revenue Customer Trials Proving Use Cases & Metrics Yahoo!’s Marissa Mayer: “Revolutionizing social media with a differentiated solution” Our evolution… $100K Founder & Family Nov/13-Feb/14Mar/12 Sept-Oct/12 Mar/13 First Revenue Jul/13 Sept/13 $3.5mm+ Series A Platform Enhancement & Sales $500K Equity Round ($3mm pre) 2,0 iPhone B2B platform debuts at SXSW Pipeline 260+ rebranding $316K Angel Convertible
  25. 25. Don’t Avoid mistakes 10. (DO learn from them!)
  26. 26. Don’t Assume the goal posts won’t shift 9. (What you need to prove)
  27. 27. Don’t Assume you can raise money when you need it 8. Ask for it when you have plenty …
  28. 28. Don’t Assume you can control everything 7. Timing matters & a lot is beyond your control
  29. 29. Don’t Hire employees 6. You want ‘believers’ with skin in the game (who will sweat it out with you when cash is running out)
  30. 30. Don’t Put fundraising ahead of sales 5. Investors want to know someone somewhere will pay you for something
  31. 31. Don’t Assume investors will believe your numbers 4. They won’t and you shouldn’t either
  32. 32. Don’t Spend anything you don’t absolutely need 3. Be frugal and conserve cash
  33. 33. Don’t Talk only about how cool your product is 2. Investors only care about how much money it will make them and when
  34. 34. Don’t Know it all. 1. Why ‘teachable’ matters
  35. 35. Don’t Don’t assume VC is your path. OK, there’s one more... Will you have $200m revenue in 5 years?
  36. 36. Don’t Do it just to get rich. OK,and one last thought... Most entrepreneurs don’t. (If you want to live on a beach, do it now!)
  37. 37. Thank you Melinda Wittstock | CEO & Founder 202 274 1479 Melinda @ Verifeed.com Twitter @Veriate @NewsiTnews Demo at Verifeed.com

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