The Art of Following Up (Without Being Annoying)


I once sent a pitch to a former client. I hadn't worked for this client in several months, but she paid well and I was eager to get another piece of business. I was certain I had a proposal she would be interested in. But my contact didn't respond to my first email. Or my second one, a couple of weeks later, or my third, a couple of weeks after that.

We had a strong history together and I really wanted to work with her again. And so, instead of my usual practice of giving up after a couple of tries, I kept at it. After yet another email went unanswered, I called her office and left a message. A week later, I left a message again. (I was feeling more and more like a stalker, but I really wanted the job.) A week after that, I called one more time--and she happened to pick up the phone.

She hadn't read or didn't remember my emails or phone messages, so I explained once more what I had in mind.

"That's interesting to me," she said. And gave me the job.

As soon as I got off the phone and got done whooping for joy, I pulled out a little yellow sticky note. "Persistence pays!" I wrote with a red felt tip, and stuck it to the side of my computer. For years--until I changed computers a couple of times and the stickum wore off--that little note stayed in place as an important reminder that what can feel like obnoxious pushiness might actually be the appropriate behavior needed to get a customer's attention in this busy world. It's a lesson I've often forgotten, but when I've remembered and made the effort to follow up and then follow up again, I've rarely been sorry. More than once, it has led to an unexpected sale.

On the other hand, as someone who receives a lot of pitches, and more than my share of follow-up emails and phone calls, I know that there are effective ways of doing it and ways that will only annoy.

How do you do follow-up right? Here's what works for me:

1. If you haven't followed up, you haven't really pitched.

This seems like it should go without saying. But too many people will send one email or leave one phone message and never get in touch again if they don't get an answer. If something's worth going after, it's worth trying more than once.

2. Follow up at least two times more than you think you should.

In another case, I sent a pitch, then one follow-up, and then gave up. Four months later the customer got back to me--very apologetically--to ask if I was still interested. I was, and that company has since become one of my best clients. It was sheer dumb luck that this particular customer remembered my pitch or else found it again in her inbox. If she hadn't, I would have missed a really good thing by giving up too soon.

3. Assume your customer has forgotten your pitch.

You'll have the best chance of success if you figure on starting over from scratch every time you get in touch. If your original proposal was an email, include that email in your follow-up. If you have a prospect on the phone, or are leaving a message, remind him or her in as few words as you can what you proposed.

4. Don't act like you're owed anything.

It can be tempting to get peevish the third or fourth time you've followed up and gotten no response. Keep in mind that no matter how many times you've gotten in touch or how perfect your offer is for that client, no one there is obligated to respond to you in any way. Your fifth follow-up should be as polite in tone as your first one was.

 5. Try multiple channels.

Not getting a response to your emails or phone messages? Try an @ message on Twitter, or a message on LinkedIn or Facebook. If you have multiple contacts at a prospective client and one isn't answering you, try someone else. (Make sure to let each contact know who else you've contacted, though, or this can backfire.)

6. Your objective is an answer.

If you've set yourself a "no" quota, you know that an answer, even a turn-down, is much better than getting a non-answer such as "I'll get back to you." (If you don't have a "no" quota, you should.)

But some people are uncomfortable saying no, so they'll try to put off the inevitable. Fight that tendency by giving the person a reason to give you an immediate answer, such as a limited-time discount. And if your contact says something like "I'll get back to you," set a time when you'll get back to him or her instead.

7. Have a plan.

What happens if and when you get that "no"? Have an immediate plan. What other customer can you pitch to next? What other product can you pitch to this client? Getting turned down should just take you to the next step along your planned path. By the way, you should also know what your next step is if the answer turns out to be yes.

8. Say thank you.

Whatever answer you get, someone took the time to read your proposal, or speak with you on the phone. They gave you some of their time and attention, which is a scarce commodity for every professional these days. They may have given you information that can help you make your product better, or some ideas about how to sell it elsewhere. And if you thank them, they're likely to remember how gracious you were--and want to do business with you in the future.

U.S. Private Equity and Venture Capital Funds Earned Positive Returns for Q3 2013 and Improved on Their Q2 Results,

U.S. Private Equity and Venture Capital Funds Earned Positive Returnsfor Q3 2013 and Improved on Their Q2 Results, According to CambridgeAssociates

Returns for Venture Capital Investments Moved Ahead of Private Equity Year-to-Date

BOSTON, MA, Mar 05, 2014 (Menafn - Marketwired via COMTEX) --In the midst of a strong period for public equities and a healthyIPO market, U.S. private equity and venture capital funds generatedpositive returns for the third quarter of 2013, with venture capitaloutperforming private equity for the period. Over short and mediumterms ending on September 30, 2013, both alternative asset classescontinued to struggle against the public markets. Over the long termthe opposite remained true, as both private equity and venturecapital funds delivered returns that easily bested those delivered bypublicly traded equities, according to Cambridge Associates.

Quarterly returns for both indices were more than two percent greaterthan in the prior period. In the third quarter, the CambridgeAssociates LLC U.S. Private Equity Index rose 5.1%, bringing itsyear-to-date return to 13.3%. For comparison, the S&P 500 gained 5.2%and 19.8% over the same periods. The Cambridge Associates LLC U.S.Venture Capital Index returned 6.5% and 14.0%, respectively, for thequarter and year-to-date. Its closest public market counterpart, theRussell 2000, gained 10.2% and 27.7% for the same periods.

The table below details the performance of the Cambridge Associatesbenchmarks against several key public market indices. Returns forperiods of one year and longer are annualized.

Fundraising Mistakes Founders Make

There’s a lot written about what you should do when you raise money, but there hasn’t been as much written about the common mistakes founders make. Here is a list of mistakes I often see: 

• Over-optimizing the process
A lot of founders try to get way too fancy with tricks that they think will help them raise money.  It’s actually quite simple; if you have a good company, you will probably be able to raise money.  You’re better off working to make you company better than working on fundraising jiu jitsu.
 
The process is simple:
  1. Get intros to investors you want to talk to and reach out to them, in parallel, not in series - this is important, see (3).
  2. Explain to them why your company is likely to make them a lot of money. This usually includes the company’s mission, the product, current traction, future vision, the market, the competition, why you’re going to win, what the long-term competitive advantage will be, how you’re going to make money, and the team.
  3. Set up a competitive environment. You'll (unsurprisingly) get the best terms when multiple investors compete with one another for space in your round.  This is the one rule of "the game" that is really important--I'll talk about it more later on.
Some founders try things like carefully timing news articles, casually mentioning to one investor that they'll be having dinner with another investor, claiming their schedule is really packed except for one specific hour, and other tricks - but if you just build a good company, you generally won’t need to.
 
Many little things simply don't matter very much--for example, the "signal" sent when an early investor chooses not to participate in a later round. If the company is doing well stuff like this is easily overlooked, and if the company's not doing it will struggle to raise money anyway.
 
Unless you do it perfectly, game-playing will hurt you with most good investors. And you should be trustworthy and honest no matter what. Investors won't back you if they can't trust you.
 
• Over-optimizing the terms
Startups are usually a pass-fail course -- either you succeed or you don't.  If you fail, maybe you get acqui-hired, but that's happening less frequently and is usually little better than just getting a job at the acquiring company instead.
 
The important thing is to get good investors, clean terms, and not spend too much time fundraising. The biggest problem comes from chasing high valuations. Contrary to what many people think, at YC we encourage companies to seek out reasonable valuations. Valuations are something quantitative for founders to measure themselves on, and there are lots of investors willing to pay high prices, so they don’t always listen. But I’ll say it again: trying to get really high valuations is a mistake.

If you’re clearly in a position of leverage, it’s fine to push for a high valuation, but don’t jerk investors around. Just say what you want and don’t get into a lot of back and forth or term complexity. Also remember that very high valuations often push out good investors.
 
And don’t forget the prime directive of fundraising strategy: set things up so that you never do a down round. The badness of a down round is difficult to overstate; in fact, the threat of that is the best reason not to take a super high price when you’re offered one.  If you raise at such a price, everything has to go perfectly in order for your next round to be an up one.
 
• Failing to create a competitive environment
Ok, here is the one part of the game I really believe is critical.  You generally need to set up a competitive environment to get a good outcome in fundraising (or, for that matter, any big deal).
 
The hard part is getting the first offer. Once you have this, you have the leverage -- if other investors don’t act fast, you have an offer you can take, and they risk missing a potentially great opportunity (and maybe looking stupid to their partners, etc etc.) Until then, they can procrastinate and wait as long as they want. It’s remarkable how long it can take the first offer to come in, and how quickly the next ten can materialize.
 
So sometimes you have the hack the process a little bit to get this first offer. The best way is to find someone who loves what you’re doing and is willing to act. Although it’s ok to use that offer to get others, you should be nice to anyone willing to act first by prioritizing their offer, finding a way to get them into the round even if someone else leads it, etc.
 
There are a lot of other tactics for this that I should write a separate post on at some point.
 
Beware, though, that saying things like “our round is closing really fast” when you have no offers usually backfires. Investors talk and will call your bluff.
 
When you have a good competitive environment the leverage shifts to you - you will be astonished at how much things change. Firms that previously couldn’t meet you for three weeks will suddenly be able to schedule full partner meetings on a Sunday. And when multiple bidders really want to invest, a lot of the "non-negotiable" terms like 20% ownership and board seats go away.
 
• Coming across as arrogant, antagonistic, disrespectful, etc.
Somehow, a myth got started that investors like this and nerdy founders sometimes put on an affectation.  Don’t do it.  Be respectful (which includes things like not asking investors to make a decision after a first meeting unless you really are about to close your round).
 
Remember that investors are people too. They want to feel loved. The first time I raised money, I was hesitant to tell the investors I really liked that I really liked them because I thought I was giving up leverage. But it turns out telling the investors you really like that you especially want to work with them makes them more positively inclined to you, not less.
 
• Not hearing no
Investors don’t want to kill option value; founders are optimistic people.  This leads to investors saying a very nice version of "no" and founders hearing "with just a few more conversations, I may get to a yes."  Anything other than a term sheet is a "no", and all the reasons don’t matter.  Move on and talk to other investors.
 
• Not having a lead investor
A lot of founders put together party rounds comprised of dozens of investors and congratulate themselves that no single investor has much power over them.  But in practice investors have little power over companies that are doing well anyway, and what they actually have is no investor that is super invested in their success.
 
It turns out it’s really valuable to have one investor that you meet with every month and report progress to. This forcing function creates an operational cadence in the company that is a big net positive. It’s remarkable to me how much more frequently the party round companies go off into the weeds.
 
• Pitching poorly
A lot of founders get caught up in trying to follow a perfect template, and drone on and on about their competitors, the market evolution, etc.  They’re bored and it shows.
 
The way to pitch well is to focus on the parts of the business that truly excite you. That will shine through, and it will get the investors excited. Conveying your passion for the business is almost as important as what you say, and it’s almost impossible to fake.
 
Even if you’re an introvert, it will usually come through to a sophisticated investor. So start with the parts you’re really excited about.
 
Investors want to hear a good story, and that includes things like how you decided to work on this idea, why it matters, how you met your co-founders, etc. So don’t leave those parts out of the pitch.
 
Also, remember that smart investors are looking for the really big hits. So don’t do obviously dumb things like talk about potential acquirers in a seed round pitch - that will suggest you’re not trying to build a really big company.

• Not reference-checking major investors
Great investors can add a huge amount of value; bad investors can make your life miserable.  Before signing up to work with someone for the better part of a decade, spend an hour calling founders they have worked with to get a sense of what's in store for you.
 
• Lacking a clear vision
If you don’t seem to have any strong feelings or conviction, and you agree with every suggestion the investor makes about your business, you'll risk coming across as lacking a clear vision.  You should always listen to what someone smart has to say, but you should be firm on the things you really believe.
 
Founders with a clear vision can usually explain what they’re doing and why it matters in just a handful of words. Clear vision also usually entails at least one big new idea. Even if it’s a familiar problem, there should be something important the investor hasn’t heard before.
 
It’s ok to have some big unknowns, of course. You’re not expected to have all the answers, but you should have clear theses to start with.
 
• Not knowing key metrics
There are two questions I really look at in early stage investments:
  1. Does the team know what to do?
  2. Can the team do it?
The first question is addressed by the bullet point above.  The second is addressed by showing that the team cares about operational quality.  I’ve found that teams that execute well always know their numbers (or current status if in R+D mode) cold, and that it’s one of the best predictors of execution quality.  It’s surprising how many companies pitch investors without knowing this information.

JurisClerks

This is a great idea.

---------- Forwarded message ----------
From: John Tarantino, Esq. <svpsales@jurisclerks.com>
Date: Wed, Mar 5, 2014 at 11:01 AM
Subject: Request to Meet RE: JurisClerks' Fractional General Counsel and In-house Counsel Solutions
To: jay@growthink.com


Jay,

 

I am writing to ask if we can schedule a phone or in-person meeting on March 11th, 12th or 13th to discuss our Fractional General Counsel and In-House Counsel services. If these dates don’t work, please feel free to propose others.

 

Many companies are large enough to have complex legal needs, but do not have the budget or need for a full-time General Counsel, and thus are completely reliant on outside law firms. JurisClerks fills this void. Now corporations can take advantage of the tremendous cost-savings and many benefits of having their own General Counsel, when needed and as needed.

 

For companies with no General Counsel, JurisClerks can provide an experienced attorney to take on the role of General Counsel on a fractional, as-needed basis. For companies with an in-house law department, JurisClerks can provide seasoned attorneys with diverse experience to handle strategic projects and specific practice areas.

 

Benefits of JurisClerks’ Fractional General Counsel & In-House Counsel Solutions

 

  • A key advisor to the management team who understands your business, objectives, and risk
  • A leader who oversees all legal matters from inside the company including:
    • Governance, compliance and regulatory matters
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    • Litigation Management
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  • Attorneys with the background and experience to match your business and needs specifically
  • Engagements and fees custom-tailored to your specific needs, and at a fraction of the cost of outside law firms

 

Founded and managed by attorneys, for 10 years JurisClerks has provided custom-tailored legal staffing solutions to corporations across the US. Visit www.jurisclerks.com for additional information.

 

We encourage you to contact us to schedule an initial phone or in-person meeting, and thank you for your consideration.

 

Sincerely,

 

John

 

John M. Tarantino, Esq.

VP, Sales & Marketing

JurisClerks®

In-house Attorney Staffing Solutions 

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February IPO Activity Highest Since 2007

From Needham & Company:

U.S. equity markets staged an impressive turnaround in February. Despite a prolonged slump at the start of the year on concerns related to prospects for growth in China and the U.S., along with uncertainty in the emerging markets, domestic equity markets rallied to new highs at the end of the month on the back of Janet Yellen's testimony which voiced a potential decrease in tapering as response to recent disappointing domestic data points. On the final Thursday of February, the S&P 500 index rose 9 points to 1,854, surpassing its previous record high of 1,848, eventually closing out the month at 1,859. Furthermore, the Dow finished at 16,322, just short of its 16,576 record, and the NASDAQ added 1.0% on the week to finish at 4,308, short of its record close of 5,049.

In total, there have been 42 IPOs raising $8.2bn so far in 2014, the highest YTD activity since 2007 (also 42 IPOs). February activity saw 24 deals raise $2.3bn, the most active February since 2007 (27 IPOs). Of the 24 deals which priced in February, Varonis Systems (VRNS) was the only technology related deal. The VC backed company, which priced on February 27th, opened up 77% and eventually closed up 100% from its offer price on its first day of trading.

The technology IPO backlog remains very robust, however, with eleven companies filing their initial S-1 statements in February: GrubHub (GRUB), a developer and operator of an online food-ordering website, seeks to raise $100M; Everyday Health (EVDY), a provider of online consumer health solutions, seeks to raise $115M; 2U (TWOU), a provider of higher education degree programs online, seeks to raise $100M; A10 Networks (ATEN), a network equipment manufacturer, seeks to raise $100M; King Digital Entertainment (KING), an interactive mobile entertainment & gaming company, seeks to raise $500M; Borderfree (BRDR), a provider of international ecommerce solutions and cross-border expertise, seeks to raise $86M; Aerohive Networks (HIVE), a manufacturer of a cloud-managed mobile networking platform, seeks to raise $75M; Q2 Holdings (QTWO), a provider of cloud-based virtual banking solutions, seeks to raise $138M; Castlight Health (CSLT), a provider of software designed to make health care pricing options transparent, seeks to raise $100M; Amber Road (AMBR), a provider of global trade management products and solutions, seeks to raise $75M; and Rubicon Project (RUBI), an internet advertiser which automates the buying and selling of ads, seeks to raise $100M.

Also of note are two companies who filed their S-1 on March 3rd: Five9 (FIVN), a provider of cloud software for contact centers, seeks to raise $115M; and Opower (OPWR), a software company that helps utilities meet their efficiency goals through effective customer engagement, seeks to raise $100M.

The closely-watched, CBOE Volatility Index (VIX) fell to 14 by the end of February. Despite the index's stint in the high teens and twenties, we have not seen the spike meaningfully halt activity in the equity markets and have enjoyed healthy market activity throughout 2014. That said, as the calendar turns to March, investors will remain focused on the developments in the Soviet bloc given the mounting geopolitical concerns over the sovereignty of Ukraine.

*         The IPO Thermometer, measuring returns on IPOs in the last 90 days, was +95%, while the NASDAQ saw returns settle at +6% over the same period. Four companies remain in the 90-day look-back: Autohome (ATHM) is trading up 142% from its offer price; Nimble Storage (NMBL) is up 129%; Varonis Systems (VRNS) is up 96%; and Care.com (CRCM) is up 9% from its initial offering price.   (pg. 1 as of 2/28/2014)

*         The IPO Scorecard shows the issuer's first day trading results in comparison with its initial filing range. In February, Varonis Systems (VRNS) priced 22% above the midpoint of its range ($17 - $19) and traded up 100% on its first day. (pg. 2)

*         Page 3 is a linear version of the IPO scorecard. Note that data in September and October of 2011 was limited due to inactivity. (pg. 3)

*         The CBOE Volatility Index (VIX) is the most widely followed gauge of uncertainty in the market. The volatility charts track the CBOE VIX volatility index and its correlation to the rate of new issuers. The VIX closed February at 14. We view a reading below 20 as generally favorable for near-term capital markets activity. (pg. 5 -6)

*         The technology IPO backlog grew in February: one company completed its initial public offering (VRNS); eleven companies filed their initial S-1 (GRUB, EVDY, TWOU, ATEN, KING, BRDR, HIVE, QTWO, CSLT, AMBR, RUBI); and no companies withdrew their registration statements. (pg. 10)


Kickstarter Is About To Crowdfund Its $1 Billionth Dollar

Posted by Tech Crunch/Greg Kumparak (@grg)

How much money would you guess the Internet has collectively thrown at Kickstarter?

Don’t bother whipping out the ol’ graphing calculator — Kickstarter actually shares that number regularly. Sometime quite soon, Kickstarter will surpass $1 billion dollars pledged.

This comes from Kickstarter’s own statistics page, where the company regularly provides a breakdown of where the money is going on the site. As of this morning, Kickstarter has seen $999,209,752 dollars pledged to projects — or roughly $791K shy of the big B. They’ll likely pass the billion mark some time in the next few days.

One thing worth noting: this is dollars pledged across “Successfully Funded” projects, projects in progress, and those that didn’t meet their final goal. On Kickstarter, pledged money is only received if the campaign’s target goal is met. Kickstarter says that, of the billion dollars pledged overall, $858M has been pledged to successfully funded projects.

Other interesting stats that can be gleaned from the page:

  • 135,270 campaigns have launched on Kickstarter
  • Of those, 57,052 (43%) reached their funding goal. Of the larger chunk that does not succeed, 10% of those didn’t receive a single dollar.
  • While the “Games” category is only ranked sixth in terms of number of successfully funded projects (after Music, Film, Art, Publishing, and Theater), it has by far the most campaigns that have raised over $1M, and its campaigns have collectively raised more than any other category.
  • If your campaign can raise 20% of its goal, it’s 80% more likely to succeed.

(For the curious: Kickstarter takes a 5% cut of successful campaigns. I promised you wouldn’t need your calculator, so: on the $858M that has been pledged to successful projects at this point, that’s $42 million or so that went to Kickstarter.)



Fwd: NovoEd News: Put your ideas into action with our new courses!

Some cool courses here, especially the one on Venture Deals and on the Startup CEO...


Monthly Newsletter
January 2014

This Month's Highlights


Featured Upcoming Courses:

Startup CEO

Starts January 27
In this course, Matt Blumberg shares his experience as a startup CEO and covers a number of issues he has faced over the dozen years he has been a CEO. Learn how to manage your company, your employees and yourself, and make connections with other entrepreneurs, CEOs, and investors.

 

Venture Deals

Starts February 24
Get the inside scoop on venture capital from Brad Feld and Jason Mendelson who have been involved in hundreds of venture capital financings. You will learn from experts who wrote the book on venture deals and expand your network of angel investors, venture capitalists and entrepreneurs.


 

   Strategic Decisions Group

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  Stanford University

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   Stanford University

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Novopreneurs Opening Access to Wisdom of the Masses

Inspired by James Surowiecki’s book, “The Wisdom of Crowds” – in which New Yorker business columnist James Surowiecki demonstrates that large groups of people are smarter than an elite few when solving problems - Francisco Ruiz and Oscar Estrella, taking Technology Entrepreneurship, started Ranktab to help individuals gain insights to such questions from their friends and colleagues.

Student Story: Professional improvement one class at a time without the extensive videos

Stephen Lowe is a veteran in post-secondary education and online pedagogy but remains hungry for continuous improvement. Stephen has taken Designing a New Learning Environment and Design Thinking on NovoEd. He runs the designing thinking model regularly with his team and in conjunction with ADDIE pedagogy framework after taking these two courses.

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