Provides a great outline in short order. Also see Part I of this series: Elevator Pitch
This is a thorough, yet brief post on how to raise money from Angels and other seed investors. It gives very tangible advice. If you’re in this stage of your startup (which we are at Pocket Tales), you can start using this information immediately.
ExactTarget continues to be Indianapolis’ premier darling. Even the location of their offices on Monument Circle, the heart of downtown, is the perfect analogy for the position they hold in the Indianapolis tech community.
As much as I look up to and try to emulate ExactTarget, I think too often their success is used as proof that the Indianapolis startup community is thriving.
As this Indianapolis Business Journal article jokes, the Indianapolis tech community didn’t get ExactTarget back in 2000: “They couldn’t even raise $1 million,” recalled Kidd, now a senior vice president at Indianapolis-based Walker Research, who admits to scratching his head at just what the entrepreneurs were proposing to do back then.”
What I wonder is, has this mentality really changed? If ExactTarget started today, and email marketing was just as much a new concept as it was back in 2000, would it have an easier time getting funded?
There are a lot of reasons to be optimistic about Indianapolis, but the vitality of a startup community is proven by the accomplishments of…well, startups. ExactTarget hasn’t been a startup for 9 years.
Free Model Legal Documents for Startups
In startup hotbeds like Silicon Valley, Boston, and even New York it’s common for law firms to work out special arrangements with startups who generally have little cash (usually that’s why they need a law firm in the first place, to raise cash). These law firms are willing to defer payment until the cash is raised or even accept equity as payment.
Law firms in Indianapolis are also familiar with special arrangements for startups.
At Pocket Tales, we’ve looked to Nick Mathioudakis from Baker & Daniels for help, but I’ve also seen Barnes & Thornburg, Alerding Castor, and to a lesser extent Ice Miller (although right now they have a case study for a startup on their homepage), hanging around the Indianapolis startup scene.
This is great for the startup but obviously there’s something in it for the law firm too. Assuming they continue to survive, startups generally require a lot of legal work and a successful startup can be a big revenue source for law firms. Mint Founder Aaron Patzer estimated legal costs of $10,000 - $50,000/ month not including special events like incorporation and additional rounds of fundraising.
What if you’re not quite ready to seek professional legal advice?
You can help yourself.
My Thoughts on Bloomington-based SproutBox
SproutBox is a new type of investment firm. It’s in the same vein as Y Combinator, TechStars, DreamIt Ventures, etc. but it has its own twist. Like the others, SproutBox asks you to relocate to their headquarters (in this instance in Bloomington, IN) and then gives you just enough money to live for 3 - 6 months. The difference is, SproutBox uses its team of 10 coders, designers, and marketers to build or extend your product. For this, they take a bigger percentage of the company than the other new wave investment firms, but if you’re an idea stage company without a technical lead (like Pocket Tales was) it’s worth it. The alternative is putting together your own team of great coders and that’s just hard, risky, and costly in terms of equity (if you don’t have cash, what else are you going to pay them with?)
Pocket Tales was invited to finalist day to present to roughly 15 people on SproutBox’s advisory board which included investors and community leaders. We weren’t selected but we came away with a ton of confidence, a great new network, and some great memories, so I thought I’d share my thoughts on the whole process.
Mint CEO Aaron Patzer - Presentation on Budgeting, Hiring, and Raising Capital
The following video and presentation contain actual numbers from Mint.com’s startup story. It shows how Patzer and team budgeted expenses, hired developers, and raised multiple rounds of capital from “Garage” round to exit.
And it’s all wrapped up into a succinct 20 minute presentation.
This is extremely useful information; especially, for early-stage Indiana tech startups who see few if any examples of this type locally.
Patzer’s revenue model slide is particularly ingenious.
About this Blog
The primary purpose of this blog is to record for prosperity the experience of starting my first company. I’m a forgetful and nostalgic person. I expect to search this blog constantly for my own advice, for quotes of inspiration, and for links to useful resources. Also, many years from now, I expect to read these posts and laugh at how much and how little has changed.
The secondary purpose of this blog is to inform and connect other early stage entrepreneurs in Indianapolis, IN. There are no shortage of people telling me that Indiana is not the place to start an emerging technology/ low-cost internet company. There is little to no capital here for pre-revenue companies and similarly, its harder to find developers and other professionals desiring to work for a startup.
