What Investors look for in a Seed Stage Startup

With only two weeks to go to the Final Selection Day of the Class of 2016, the Collider coaches and mentors began helping the top 20 prepare for an intense room filled with the investors and partners for the Class of 2016 programme. This can be an intimidating experience for any early-stage founder - walking into a room filled with strangers who will be making a huge decision on their futures. So Collider invited the founders to attend a workshop designed to prepare them for the presentations and questions, and provide some initial feedback. It was three hours of introductions, pitching, coaching, and learning to think like investors. The startups were hands-on with the 'Investment game' - a setup where each person invested £100K of pretend cash into each other's businesses. Practical and interactive, the founders walked away with food for thought to prepare for coming weeks.

Every selection day is slightly different, and depending on the investment thesis of the accelerator, the management teams will be looking for different things in startups. We've summarised the core content every seed stage startup needs to cover in their presentation to our investors;

Size of the market:

How big is the market you’re going to be tackling? Investors here are looking for big , but also reasonable numbers. For example, if you’re going to state that the mobile market in North America is $XBn, that’s probably not the size of your market. Investors here are looking for you total addressable market (TAM). Take a look at the differences between TAM, SAM and SOM to understand what you should be using.

Scale:

This is all about how big the problem is. Tied to the size of the market, it’s all about how quickly you can tackle what chunk of your target market. ‘Scale-ups’ as a term for companies getting out of startup phase has been floating around for a year now, identifying any startup entering a high growth phase. Going from a startup to a ‘scale-up’ means a restructuring of the company to keep up with the demand. Here’s a great article from First Round Capital with some advice and case studies on just this.

Traction:

Founders, don’t forget, we don’t want 'yes' to always be the answer. We need the answer to be truthful. If you’re in beta, tell us how about your acquisition strategy for clients and customers. How are you measuring your traction? This can be more telling than the numbers you provide, as your understanding of the market will be identified by what you measure.

Team:

This is the MOST important, and is the thesis to your entire presentation. The question is, and at early stage funding will almost always be, Why are you the team to nail this?

Everything else should be supporting information to answer this burning question.

We also want to know about your background. Where did you come from? What is your relationship to the industry you are trying to disrupt? What standing relationships do you have in the industry? How love have you worked together as a team?

Tech (IP):

We want to know if you’ve built it in-house, who is responsible for it on your team, and what stage of development it is at. The role of CTO changes drastically over time, going from being the coder at the front lines to manager of people and product. We want to know you're thinking about these things already.

Who will you be hiring to build out your tech team and why? How will you be managing the tech team in relation to the rest of your company?

Locomizer provides the right data for DOOH

As digital out of home (DOOH) advertising revenue jumps %30 in the UK, Jameson, working with Havas Media, Posterscope and Collider alumnus Locomizer, launched a 7 month campaign targeting the British 'Lads'; a target market where Jameson currently has little clout. Posterscope developed a unique OOH campaign to engage with the target customers. Locomizer's technology enabled them to know more about where the Lads were travelling to before and after going to the pub. They were then able to provide completely anonymous, hyper local data highlighting where the target consumers are spending their time during the week.

This data will make the DOOH advertising more effective, as it targets the audience during their 'down-time' while waiting for public transport after work, or on their lunch breaks - outside of traditional locations and times. This is the first campaign of this type in the UK, with Locomizer's technology providing hyper-local analytics, and was launched in conjunction with the World Rugby League in the UK.

Ryan Hedditch, Business Director at Posterscope said: “This is a fantastic evolution of targeted advertising and we, in partnership with Havas Media, are excited to be putting it into action for Jameson. We have analysed modelled and historic data on all of those customers we want to be able to reach. Understanding location behaviour of consumers allows us to identify geographical hotspots where our audiences are likely to congregate at, when they are not at the interest affinity locations.”

This is a completely new approach to DOOH advertising, where data analytics previously only applied to online advertising, are now available in offline settings. But Locomizer is taking it one step further - they're able to aggregate and disseminate data in a meaningful and actionable manner. Digiday duly noted that this is a turning point in DOOH as advertisers begin to use the data available in social and mobile to effectively target people based on what they think, feel, and do. And we're excited to see the results.

Collider completes £1M Investment into Class of 2015 Startups

Collider, the leading MadTech Accelerator in London, completes their Class of 2015 investment with a second round of £550,000 into six of the most promising marketing and adtech (also known as MadTech) startups from the Collider Class of 2015. After Collider’s Class of 2015 Demo Day at the end of April, these startups were hand-picked by the individual investors to receive up to £100,000 follow-on funding as part of the Collider Accelerator programme. They will now participate in a further 8-month long programme. This is geared towards high growth and preparing the founders to raise a late seed to Series A funding round in 2016. This programme will focus on getting the startups initial traction through commercial trials and deals.

Rose Lewis, Co-Founder of Collider says; “We have found a gap in startup funding which exists between seed and Series A. This is where a significant number of startups fail. This second round of funding will give these amazing MadTech startups the runway they need to gain the necessary traction to raise series A more quickly.”

These six companies have founders from around the world including; Israel, Slovenia, the UK, USA, Australia, Hungary who have all chosen the UK as their company headquarters. The startups solve enduring problems big brands and agencies face on the customer journey including; brick-and-mortar retail analytics, short form video, tracking ‘dark social’ sharing and targeted mobile advertising.

The six selected startups:

[one_third] [/one_third] Brandvee is an audience development platform for media brands that finds, tracks and targets the most influential customers who drive conversion.

[one_third][/one_third] Burst makes big data from little videos and have built the world’s first social video analytics platform which helps organisations understand how to spend more effectively on short-form video.

[one_third][/one_third] Pixoneye  uses people’s photos and videos that they have stored on their mobile devices in order to extract very clever data about them, completely anonymously. By understanding the user through their photos we are able to serve the right ad to the right user no matter what app they are using!

[one_third][/one_third] Real Life Analytics enables targeted advertising on any digital screen. Using patented visual recognition technology we can enable every screen to recognise who is in front of it and serve them exactly the right targeted content in milliseconds.

[one_third][/one_third] Storesense interprets customer journeys in traditional brick-and-mortar stores using passive Wi-Fi. Our advanced proprietary algorithms drive actionable retail advice – from low traffic zone warnings and optimal in-store advertising position suggestions to the best locations for resting areas.

[one_third][/one_third] SyncSpot harnesses the power of entertainment to move people by offering exclusive content that can only be accessed once a customer is at a specific location.

Introducing: Pixoneye

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**We will be profiling each company joining Collider’s Class of 2015. Take the time to learn a bit more about them and keep an eye on what’s to come over the next few months!**

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Who are you and what do you do?

We are Pixoneye. We let our customers in on their customers' personal life stories by combining image understanding capabilities with artificial intelligence on any mobile device's photo and video galleries.

Who are your co-founders & give us one line about each of you!

Ofri Ben Porat (CEO) - 7 years' experience in online and digital marketing and advertising, served as the senior advisor to the Minister of Tourism on all marketing matters.

Nadav Tal-Israel (CTO) – over 10 years' experience in computer vision and machine learning, Nadav served as head researcher on the Samsung gesture recognition developments for the galaxy series

Dr. Iris Yuster (partner) – 20 years in the targeted and segmented marketing and advertising business, Dr. Yuster did her Doctorate for Deutche Telekom with regards to ad serving and correct content on TV platforms.She is also responsible for Pixoneye's post-doc research regarding customer profiling based on their photo and video galleries.

Where in the world are your headquarters?

Pixoneye is an international organization and has 3 offices around the world:

Our headquarters are currently in London, where most of the management and marketing happens. Pixoneye's R&D is located in Tel-Aviv, Israel, smack in the middle of the hottest tech scene in the world (at least weather wise), and finally, Pixoneye's Luxembourg office is responsible for all the company's financials and academic research @ University of Luxembourg.

What excites you most about London (one startup point and one non-startup point!)?

On a startup level, London is the capital of Europe with regards to Marketing and Advertising Agencies. If we want to swim with the right sharks we need to dive into the right pool!

On a personal level…Burgers and lobsters.

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What insight (competitive advantage, new perspective etc.) are you bringing to the Madtech industry?

January 2014 marked the inevitable shift to mobile, as consumers time-spent on mobile was higher than time-spent on any other devices. Digital consumption on mobile is now at 65% however, companies are having a hard time adapting to this new device in terms of targeted advertising and relevant push content. Pixoneye offers a Real Time Personalization Solution on mobile that will allow any company to understand the true and personal story of their customers in an automated and simple way.

What is one challenge you have had to overcome since beginning your journey?

The more personal the device (ie: Mobile phones) the more privacy issues arise when trying to target and learn about the customer. Pixoneye has spent the better part of the past 2 years dealing with this issue which has been the main focus of the technological developments since founding.

Tell us about how Collider can (and hopefully will) help you over the next four months.

Large agencies and brands are slow moving and complex machines. When pitching AdTech ideas to them (especially on mobile), to go from "ooh! That sounds like a great idea" through "let's talk business" all the way to "pleasure doing business with you" can be a death sentence for start-ups. We hope that with the aid of Collider and their understanding of both start-ups and large agencies we can speed up the above mentioned process and rapidly grow and integrate with our clients.

Here's a funny fact you didn't know about us!

When preparing for the web summit in Dublin last year, we sent our intern to make 100 Pixoneye branded hats to give away at our booth, he misheard us and got to Dublin with a suitcase containing 1000 hats. We managed to give away 12 hats at the conference and now have around 988 hats still in our offices. If you wish to receive a free pixoneye hat, please email me @ ofri.benporat@pixoneye.com and I'll make sure to send you one right away!

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6 startup must do's when meeting with brands and agencies

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Rose recently wrote an article for The Drum highlighting 5 tips every brand and agency employee needs to know to have a successful first meeting with a startup. And we’re turning it on its head. So startups, this one’s for you.

Brand and agency meetings can be dubious encounters. You never know if the person you’re talking to is the right person, or if they’ll even understand what you’re doing. So Rose has compiled a list of five things to remember when you’re preparing for that first meeting.

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1. Do your research beforehand

Make sure to research both the company and individuals you will be meeting going in to the meeting. Of course you will do this, but go beyond basic background and company data. Look for common connections or interests you can use the break the ice and get the conversation flowing. Remember, you’re meeting people – and people love to talk about things they’re passionate about.

2. Anticipate the company’s problems by asking questions

And by anticipating the problems they may be facing, you will ask more meaningful questions that can help you articulate how your product will solve these issues in the most concise way later in the meeting. Provide the brand employees with a list of questions probing the problems you can solve beforehand. This allows you to engage in meaningful dialogue from the beginning of the meeting. Some example questions are;

• How are you reaching your digital customers?
• Is it important to know who your retail customers are?
• How are you responding to your competition?
• What solutions are you currently using, if any?

3. Avoid death by PPT

It can kill your meeting by unnecessarily breaking conversation and the opportunity for you to really understand your potential customer by breaking down what their enduring needs are. But we’re not going to the radical anti-ppt stance – use your deck to help explain your product, and to a maximum of 10 slides. However, if you’re ‘presenting’, there’s no longer a dialogue, as you’re doing all of the talking. Communication becomes one-way and you’ve lost the chance to learn anything about your potential customer.

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4. Show them what they’re missing

Create a sense of urgency by highlighting some of the problems they will face by having the sales process dragged on and the problem persist. Be sure to ask;

• How much does it hurt your business to have to wait?
• How much will it cost you in lost revenue per month by not solving this problem immediately?
• If they took on your solution, how would it fit into their sales projections?

By asking these tough questions you’ll be able to work out if they even care to use your solution. If they don’t care, or think the problem they have warrants a solution right now, send your energies elsewhere.

5. Don’t pitch me bro

Just as the 3 Beards event operates, pitching will not provide you with actionable feedback – just an opinion. In an even worse case, they will have an incomplete understanding of your solution because you haven’t fully uncovered their problems – check back in to number 2.

And with useless feedback and false positives, statements such as “Oh, I really like that, it sounds very interesting!” or “I would definitely use that,” happen too often for our liking. It’s your job as a founder and salesperson to ask the harder questions and uncover the truth in these meetings, not to float away on a cloud of joy only to come back to the office and not hear from the brand or agency ever again. You didn't close the sale.

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6. Takes notes and agree on next steps

Even if you do have the memory of a Sea Lion (yes, they’re memories are some of the best in the animal kingdom), you should be taking notes during the meeting. This way you can revisit the details that would have been lost otherwise, and things will be crystal clear. This will also make it easier to determine the necessary next steps at the end of the meeting. And this goes back to the previous point on asking the hard questions – don’t feel intimidated to ask them! By setting out what your next steps are, your chances of having this brand or agency as a client are increased exponentially.

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