
June 18, 2020
The Secret Art Of Fundraising | Peter Pham on The Pomp Podcast
Check out The Pomp Podcast Podcast Page
Key Takeaways
- If you have an idea or a brand, ask: How is it different? Why will people talk about it, and how does it scale?
- Understand what will be culturally relevant in 12-18 months
- Think about what people love to hate (E.g. Taxis, Razor blades, Plastic waste)
- Slow rejections are the worst when looking for investors, get a quick NO and move on
- A pitch should tell a story and capture investor’s attention
- Startups that do too many things always fail; focus on scaling the first idea
- Focus on 3 things that will drive exponential change
- A founder has to understand why things are happening
- Else, whatever a company does can be copied
Intro
- Peter Pham (@peterpham) is the co-founder of start-up studio Science, which is behind many of the world’s best consumer internet companies like Dollar Shave Club and Liquid Death
- Host – Anthony “Pomp” Pompliano (@APompliano)
Finding the Ideal Team/Idea
- If you have an idea or a brand, ask: How is it different? Why will people talk about it, and how does it scale?
- Understand will be culturally relevant in 12-18 months
- For instance, what products and services will people use post-pandemic
- Find an idea and founder that resonates with you; this is different for different people
- Think about what people love to hate – A few examples:
- Dollar Shave Club: Everyone hated razor blades because they felt ripped off
- “Uber works because everyone loves to hate taxis”
- Liquid Death: plastic water bottles and straws kill fish and whales
Leverage Social Media
- Social media facilitates word of mouth
- 100 people could be heard by thousands or millions
- Create content and give people something to talk about – For instance:
- Liquid Death turned hate comments into a death metal album
- Jeff Bezos recently shared hate email on Instagram with the comment “Dave, you’re the kind of customer I’m happy to lose”
Raising Money is a Numbers Game
- Peter talks to 70-100 people during every fundraising round
- The key is to find the person where time and space align
- Someone who is thinking about the space and has the dollars to commit now
- The key is to find the person where time and space align
- If an investor doesn’t contact you within 24 hours, it’s a no
- Slow rejections are the worst, get a quick NO and move on
Tell a Story
- The story hierarchy of every startup:
- How was the world before? (e.g. before iPhone, Google Maps, etc.)
- What changed that allows the new reality?
- Examples: Cheap shipping, mailing, easily reaching people on social media
- What are you doing to take advantage of that?
- What special secret do you know that the rest of the world doesn’t know?
- Practice telling the story (Peter practiced pitching Liquid Death over 500 times)
- Your story should resonate with an ordinary Gen Z person, not just investors
- You have 15 minutes of attention with an investor, capture them or lose them
Pitching to Investors
- Pitch with confidence, not arrogance
- Keep in mind: desperation never works
- You don’t need to tell potential investors everything
- Your shares in the company are valuable, treat them this way
- Additionally, it’s a privilege to invest in a company that will be worth more in the future
- Make investors sell you
Move the Needle
- Startups that do too many things always fail; focus on scaling the first idea
- Case in point: Uber took a long time before starting UberEats
- As a founder, focus on 3 things that will have the biggest percentage change
- E.g. Recurring customers, customers converting to paid service, people sharing, etc…
- Think about the cohorts of customers and follow their journey
- “For the customers that came in last month vs this month, everything is much better”
- “Linear is flat”, linear change isn’t interesting
- Exponential growth attracts potential investors who feel like they are being left out
- Investors love to feel they are taking advantage of previous investments
- So, show how your business improved since the last fundraise
Understand the Why
- A founder has to understand why things are happening
- Else, whatever a company does can be copied
- “Every startup, you want to be either number 1 or number 2 in the market, there is never number 3” – Peter Pham
- Typically, one pulls completely away from the other
- Example: HomeAway was first but Airbnb understood the customer better and pulled away
- Typically, one pulls completely away from the other
Projects Peter is Currently Working On
- Arrive Outdoors – rent camping gear
- The pandemic came along and shut everything down
- Luckily, everyone wants to go out and camp post-pandemic lockdown
- Lambs – for protective clothing against phone radiation
Miscellaneous
- “It’s not work when you love what you do” – Peter Pham
- We will see the digitization of everything and the globalization of digital assets
- Example: buying Tesla stock from any country without having an account with some bank
- Good ideas allow people to customize, personalize, and make it their own
- “Do good things, celebrate your wins, and ignore the haters” – Peter Pham
- Peter is always the first on the dance floor