Y Combinator Partner Explains How To Ask For Millions Of Dollars From A Stranger In 30 Seconds
REUTERS/Jo Yong-Hak
He's the cofounder of Justin.tv, the online broadcasting site that changed its name to Twitch and sold to Amazon for $970 million this year. He was also the cofounder and CEO of Socialcam, a video-sharing app that was acquired by Autodesk for $60 million in 2012.
Seibel gave a presentation at Stanford last week as part of Y Combinator President Sam Altman's class, "How to Start a Startup." He went over a few things on how to pitch investors, but what really stood out was his approach to the 30-second pitch.
"You need to be armed with this constantly ... It's magic," Seibel says.
Seibel says every entrepreneur should have a strong 30-second pitch ready in three simple sentences:
- What your company does: You have to explain what your company does in one simple sentence. Assume the investors know absolutely "nothing about anything." Apply the "Mom test," where you have to tell your mom what you do in one, super simple sentence. "Everyone I meet for the first time screws this up … use simple language, it's very important." Seibel says.
- How big is your market: Do some research and pick the industry your product is in - and come up with a dollar figure amount for the size of the market. "Investors like to hear that you're in a multi-billion dollar market … these are simple numbers to look up on Google. Don't skip this step," he says.
- How much traction do you have: Come up with a sentence that explains your monthly growth rate in terms of sales and number of users. If you haven't launched your product and don't have those figures, at least show how quickly you're planning to move from your beta to official product. "Convince the investor that you guys are moving fast and that this isn't some long slog…you're thinking about it like a startup where you can move fast and make mistakes," he says.
YouTube
With these three sentences, Seibel says every entrepreneur should be able to quickly explain what the company does, and start a conversation with investors. Once you're done with this step, you then move on to the 2-minute pitch, which requires more insight like competitive advantage, business model, team experience, and fundraising terms.
But what's next after the 2-minute pitch? Nothing. Seibel says 10- and 30-minute pitches or hour pitches are "all garbage," because you can get everything nailed down in just 2 minutes.
"One thing I like to tell founders is the more you talk, the more you have an opportunity to say something that people don't like. Talk less and it will probably be better," he says.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- FSSAI in process of collecting pan-India samples of Nestle's Cerelac baby cereals: CEO
- 7 Nutritious and flavourful tiffin ideas to pack for school
- India's e-commerce market set to skyrocket as the country's digital economy surges to USD 1 Trillion by 2030
- Top 5 places to visit near Rishikesh
- Indian economy remains in bright spot: Ministry of Finance
- A surprise visit: Tesla CEO Elon Musk heads to China after deferring India visit
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market