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Raj Kapoor Founder & Managing Director, cofounder.co
Venture Partner, Mayfield Fund
#FounderHacks
Investing in Relationships
#TrendingTopics
Lessons from Snapfish What Investors Look For
Silicon Valley or Not? cofounder.co
The Snapfish story
Role models are critical
0
5
10
15
20
1998 1999 2000 2001 2002
The Aha Moment
CableADSLTotal Broadband
Household Internet Connections (M)
Build people networks
Know when to cut the cord; timing matters
Cofounders recommended–fill the gaps
Product/Ops
BD/Schmoozing Tech w/ Business
Leadership/Product
Early it’s 100% funding, product & recruiting
Raise money whenever you can...
...either before launch or way after
640
1280
1920
2560
3200
4/3/2000 4/30/2000 5/7/2000 5/21/2000 5/28/2000
The Snapfish Solution: Free Processing
The harsh reality of the marketplace
Customers
640
1280
1920
2560
3200
4/3/2000 4/30/2000 5/7/2000 5/21/2000 5/28/2000
The Snapfish Solution: Free Processing
The harsh reality of the marketplace
Customers
0
75
150
225
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iVillageThe Street.ComThe GlobeMarketwatchPricelineEtoysDrugstoreEggheadAshford
Dealing with failure
Hunker down, pivot & hope to catch a wave
Present Future
0
12,500,000
25,000,000
37,500,000
50,000,000
2Q00
1Q01
4Q01
3Q02
2Q03
1Q04
4Q04
When it’s working, step on it
Another tough but fortunate choice
Investing in Relationships
Capitalize on luck & timing
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
6. Hire people better than you
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
6. Hire people better than you
7. You’re always raising money
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
6. Hire people better than you
7. You’re always raising money
8. Hypothesize, get to market quickly, iterate often
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
6. Hire people better than you
7. You’re always raising money
8. Hypothesize, get to market quickly, iterate often
9. Plan, but be open to change
Top 10 takeaways from Snapfish
1. Don’t wait for inspiration – grab it
2. Data only goes so far; invest in your gut
3. Passion is infectious
4. Be crisp and confident
5. Sell what THEY want, not what YOU want
6. Hire people better than you
7. You’re always raising money
8. Hypothesize, get to market quickly, iterate often
9. Plan, but be open to change
10. Balance IS possible (well, sometimes)
Top 10 takeaways from Snapfish
What investors are looking for
Search
UGC
Social
Video
Mobile
Tectonic shifts create opportunity
Other big trends
Connected TVs(Similar to mobile with the iPhone)
New Relationship Graphs
Professionals Platforms
(Individuals become the brand)
Services Marketplace
Ecommerce is mainstream in BRIC
Education Disrupted
Disruptive New Media
• Youthful founders
• Product driven
• Network effects
• Viral loops
• Broad based adoption –
100M+ user scale
• Momentum vs black swan
Two Consumer Founder Types
Destinations
• Experienced founders
• Execution-driven
• Marketplace model
• Organic traffic
advantage
• Highly monetizable
vertical
B2B/Infrastructure criteria
• Experienced internet-focused team
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
• Provides immediate benefit or cost reduction
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
• Provides immediate benefit or cost reduction
• Leverages new features of internet
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
• Provides immediate benefit or cost reduction
• Leverages new features of internet
• Data targeting, social, video, RTB, mobile
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
• Provides immediate benefit or cost reduction
• Leverages new features of internet
• Data targeting, social, video, RTB, mobile
• Future platform opportunity vs “Feature”
B2B/Infrastructure criteria
• Experienced internet-focused team
• Pain killer vs vitamin
• Frictionless deployment
• Grass roots sales model
• Open source, social media, sell to employees
• Avoid the CIO
• Provides immediate benefit or cost reduction
• Leverages new features of internet
• Data targeting, social, video, RTB, mobile
• Future platform opportunity vs “Feature”
• Recurring revenue business
B2B/Infrastructure criteria
Looking for great founders
Looking for great founders• They know or know of them WELL via network
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
• Deep understanding of business, metrics and product
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
• Deep understanding of business, metrics and product
• Big vision AND solid execution
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
• Deep understanding of business, metrics and product
• Big vision AND solid execution
• Well connected
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
• Deep understanding of business, metrics and product
• Big vision AND solid execution
• Well connected
• Know what an A+ player looks like
Looking for great founders• They know or know of them WELL via network
• Product/user obsession
• Founders who can code and move quickly
• Deep understanding of business, metrics and product
• Big vision AND solid execution
• Well connected
• Know what an A+ player looks like
• Don’t need a perfect CEO, but need to be “self aware”
General tips pitching VCs
General tips pitching VCs✓ Know your TAM – bottoms up
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
✓ Map out serial risk reduction
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
✓ Map out serial risk reduction
✓ Raise at least 18 months of capital if it’s early stage
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
✓ Map out serial risk reduction
✓ Raise at least 18 months of capital if it’s early stage
✓ Control the process and timing
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
✓ Map out serial risk reduction
✓ Raise at least 18 months of capital if it’s early stage
✓ Control the process and timing
✓ Create relationships with VCs well in advance of fundraise
General tips pitching VCs✓ Know your TAM – bottoms up
✓ Is $100M revenue realistic?
✓ Is VC or angel funding better?
✓ Proof team is business & product savvy
✓ Is there a true competitive advantage vs execution?
✓ Show network effect or why model is disruptive vs incremental to incumbents
✓ Map out serial risk reduction
✓ Raise at least 18 months of capital if it’s early stage
✓ Control the process and timing
✓ Create relationships with VCs well in advance of fundraise
✓ Try to get everyone on the same timetable
Silicon Valley..... or not?
(Only 12% went to the second place)
of VC dollars in Q2 went to Silicon Valley46%
75% of ALL venture returns are in Silicon Valley75%
The good
The good• Change the world vs make a buck
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
• People-driven transactions
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
• People-driven transactions
• Talent has DNA to go big and scale
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
• People-driven transactions
• Talent has DNA to go big and scale
• Competition to push you hardest
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
• People-driven transactions
• Talent has DNA to go big and scale
• Competition to push you hardest
• Product rules
The good• Change the world vs make a buck
• Pay it forward vs look out for yourself
• Massive information advantage
• People-driven transactions
• Talent has DNA to go big and scale
• Competition to push you hardest
• Product rules
• Not just a location; it’s a mindset
The ugly
• Cost of living
The ugly
• Cost of living
• Talent war
The ugly
• Cost of living
• Talent war
• Relationship driven*
The ugly
• Cost of living
• Talent war
• Relationship driven*
• *unless you have amazing momentum
The ugly
• Cost of living
• Talent war
• Relationship driven*
• *unless you have amazing momentum
• Weather...... NOT!
The ugly
The bottom line
The bottom line• Silicon Valley if:
The bottom line• Silicon Valley if:
• You are thinking BIG
The bottom line• Silicon Valley if:
• You are thinking BIG
• You like swimming with SHARKS
The bottom line• Silicon Valley if:
• You are thinking BIG
• You like swimming with SHARKS
• Product/service EXCELLENCE matters
The bottom line• Silicon Valley if:
• You are thinking BIG
• You like swimming with SHARKS
• Product/service EXCELLENCE matters
• You have the RELATIONSHIPS or momentum
The bottom line• Silicon Valley if:
• You are thinking BIG
• You like swimming with SHARKS
• Product/service EXCELLENCE matters
• You have the RELATIONSHIPS or momentum
• You like GOOD weather and wine
What is Cofounder.co?
What’s missing?
• Entrepreneurs looking for help, not just money
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
• Where do they get time, experience and deep help?
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
• Where do they get time, experience and deep help?
• 100+ key decisions every year
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
• Where do they get time, experience and deep help?
• 100+ key decisions every year
• Provide help longer than 3 months
What’s missing?
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
• Where do they get time, experience and deep help?
• 100+ key decisions every year
• Provide help longer than 3 months
• Expertise to avoid mistakes
What’s missing?
The time is right for a new model...
• Entrepreneurs looking for help, not just money
• Accelerators, incubators, angels, mentors/advisors, VCs
• 95% of entrepreneurs want a cofounder
• Time is more precious than capital for the best
• Where do they get time, experience and deep help?
• 100+ key decisions every year
• Provide help longer than 3 months
• Expertise to avoid mistakes
What’s missing?
The solution
• Standardize part-time cofounder role
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
• Capital, talent, partnerships & exits
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
• Capital, talent, partnerships & exits
• Curated service provider to help right away
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
• Capital, talent, partnerships & exits
• Curated service provider to help right away
• Alignment as cofounder vs investor
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
• Capital, talent, partnerships & exits
• Curated service provider to help right away
• Alignment as cofounder vs investor
• Minority vesting equity – skin in the game
The solution
• Standardize part-time cofounder role
• Time & experience for critical decisions
• Day a week cadence – 4-5 companies max
• Experienced founder/CEO/investors only
• Deep relationships
• Capital, talent, partnerships & exits
• Curated service provider to help right away
• Alignment as cofounder vs investor
• Minority vesting equity – skin in the game
• Join at point of cofounder decision
The solution
If you joined a hands-on model, what involvement would you expect?
Factor Avg. Rank (out of 12) Top 3 Ranking
Finding talent 3.90 52%
Getting to product/market fit 4.38 45%
Product and Business Strategy 4.50 45%
Financing 5.48 25%
User Acquisition and marketing 5.57 12%
Introductions and network building 6.21 10%
Sales and business development 6.62 32%
CEO/mgmt team mentorship 6.98 24%
Hiring process 7.29 10%
Prioritizing objectives 7.95 3%
Being an active board member 9.36 32%
Helping make an Exit Happen 9.76 10%
Which factors are the most important when looking for a cofounder?
FactorOverall Rating
Very Important
(4)
Important
(3)
Somewhat Important
(2)
Not Important
(1)
Commitment to startup 3.90 93% 5% 2% 0%
Complimentary skill set 3.78 83% 12% 5% 0%
Align with my vision 3.59 64% 32% 5% 0%
They think strategically 3.25 37% 50% 13% 0%
The network they bring 3.12 31% 50% 19% 0%
Technical abilities 3.05 29% 50% 19% 2%
Amount of relevant experience 2.98 25% 47% 28% 10%
Their credibility/reputation 2.71 22% 29% 46% 3%
Willing to invest their own money 2.48 17% 29% 41% 14%
I am or can be friends with them 2.46 12% 34% 41% 12%
Worked together in the past 2.41 19% 27% 29% 24%
Long term vision
Long term vision• Build network of top notch operators/investors
Long term vision• Build network of top notch operators/investors
• Some full time, some part-time
Long term vision• Build network of top notch operators/investors
• Some full time, some part-time
• Pool equity to give fund economics
Long term vision• Build network of top notch operators/investors
• Some full time, some part-time
• Pool equity to give fund economics
• Take it global
Long term vision• Build network of top notch operators/investors
• Some full time, some part-time
• Pool equity to give fund economics
• Take it global
Embed an unfair advantage alongside the best entrepreneurs
Founders I’m looking for
• Awesome in all ways except experience/network
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
• Strong desire to be CEO but self-aware
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
• Strong desire to be CEO but self-aware
• Product obsessed builders fit best
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
• Strong desire to be CEO but self-aware
• Product obsessed builders fit best
• Passion for a sector, not wed to a solution
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
• Strong desire to be CEO but self-aware
• Product obsessed builders fit best
• Passion for a sector, not wed to a solution
• Started anywhere but move to build company in SV
Founders I’m looking for
• Awesome in all ways except experience/network
• Evidence of excellence in your life
• Ambition to create a massive disruptive company
• Strong desire to be CEO but self-aware
• Product obsessed builders fit best
• Passion for a sector, not wed to a solution
• Started anywhere but move to build company in SV
• Open to spending quality time together first
Founders I’m looking for
