Peter Pham Pomp Podcast

The Secret Art Of Fundraising | Peter Pham on The Pomp Podcast

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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:
    • 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
  • 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

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

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Notes By Mostafa Khaled

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