Archive for March 1st, 2012

Microsoft has confirmed that Wednesday’s Windows Azure outage that left some customers in the dark for more than 12 hours was the result of a software bug triggered by the Feb. 29 leap-year date that prevented systems from calculating the correct time.




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Follow Yahoo!’s The Daily Ticker on Facebook here! After being cited in a Bloomberg article about the impact of falling Wall Street bonuses, Andrew Schiff is feeling the heat from Americans outraged that someone (anyone) who makes $350,000 a year could complain about their lot in life. The story has gone viral, sparked a boatload [...]

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There are a lot of reasons why consumers aren’t spending. High unemployment. Rising gasoline prices. Uncertainty about the economy. Yet consumers shopped last month and bought a lot of stuff. Same-stores sales for the majority of the nation’s biggest retailers blew past expectations in February. The Gap (GPS) reported same-stores sales rose 4 percent - [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! Less than five months after Bank of America (BAC) backtracked on its $5 monthly debit card fee, the country’s second largest U.S. bank is considering charging its millions of customers another fee. This time the fee would be for the use of a bank checking account, or [...]

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Follow Yahoo!’s The Daily Ticker on Facebook here! As the price of gasoline continues to rise — yesterday, I paid a painful $4.25 per gallon — concerns are rising over the potential impact of expensive fuel on the overall economy. But, as Aaron Task and I discuss in the accompanying video, the U.S. economy is [...]

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Forty second in a series of weekly posts by myself and Nicholas Lovell of Gamesbrief which answer the fifty questions you should ask before raising venture capital. We expect the series to run for a year after which we will collate the posts into a book. You can find the rationale behind the series here, and the list of questions here. We welcome your comments on any and every aspect of what we are doing.

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A common answer to the question “what should I be looking to get out a first meeting with a VC?” is “the next meeting”. I think that is all wrong. The point of pitch meeting with VCs is to try and get money, not to spin wheels discussing your business. A much better answer to the question is “a quick no, or a tentative yes”. Note the use of the adjective ‘pitch’ to describe the meeting. It is advisable to get to know VCs before you pitch them, so hopefully your first meeting won’t be a pitch meeting. This post is about the objectives for the first pitch meeting, i.e. the first meeting when you are explicitly asking for money.

This will be counter-intuitive to many, but a quick no is helpful because it allows you to focus your time on more productive things, either talking with investors who will eventually say yes, or maybe even on building the business rather than raising money. Good sales people know the value of an early ‘no’, and many of the very best aggressively qualify out opportunities that don’t have a high chance of closure. Entrepreneurs who try and find out quickly if prospective investors are likely to invest are bringing this best practice to raising money, which can also be thought of as selling equity in their business.

Beyond the obvious, a tentative yes is helpful because the conversation can then move onto “and what do we need to do to get to a firm decision?” which will surface any objections and help move the process forward to a quick close.

Pushing VCs to either a tentative yes or a quick no is analogous to another behaviour that comes naturally to good sales people, and that is asking for the order. It takes a lot of courage at first, not least because it might result in a ‘no’, and whilst that is helpful in the long term it is painful when it happens.

A word of caution is appropriate at this point. Pushing investors to a tentative yes or a quick no needs to be done sensitively. It won’t always be possible in a first meeting, but by having it as an objective then you will be in a good position to get there in the second meeting. I would avoid pushing too hard if you feel you might not have conveyed enough understanding of your business for the person to be able to make an informed decision, if the investor wriggles when you put them on the spot (although this raises concerns of its own), or if you are pitching to a junior VC they might not have the authority to make decisions (in which case your objective should be to get a meeting with someone who has). If a VC defers to his partners then feel free to ask them what they will be recommending.

Finally, a word on what constitutes a ‘tentative yes’. A ‘firm yes’ has two parts, a ‘yes I want to invest in your business’ and a set of terms to go with it. You aren’t going to get to terms in a first meeting, but a tentative ‘I want to invest in your business assuming the terms are reasonable’ is achievable. A yes at this point will always be subject to further meetings, standard due diligence, and agreement from the partnership and might also have explicit concerns or qualifications attached to it – e.g. subject to verification of the market size. These qualifications are fine. In essence you are seeking confirmation that your company has enough positives that they would like to invest, and that at this point they can’t see any insurmountable obstacles.

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Follow Yahoo!’s The Daily Ticker on Facebook here! Gold tumbled more than 4% and sliver slid over 6% Wednesday, a selloff some attributed to Ben Bernanke’s Congressional testimony. The selling did begin in earnest with the release of Bernanke’s prepared testimony, which didn’t specifically address prospects for another round of quantitative easing. Still, it was [...]

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