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Slide 1: The Virtual Handshake: How to Raise Capital with Social Media David Teten Teten Advisors, LLC Teten.com info @ teten.com New York, NY © Teten Advisors, LLC 2008. All Rights Reserved - Privileged and Confidential http://www.flickr.com/photos/roblee/133498854/
Slide 2: Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 3: Intro Tradition Social Media Tells Network Next Steps David Teten Biography • Currently: independent investment banker (Teten.com), specializing in advising private equity and venture capital funds on: accelerating deal flow, portfolio company executive optimization, corporate training, and due diligence • Managing Director, Evalueserve, through September 2008. 2,500-person research firm. • Founder and CEO, Circle of Experts (investment research firm), sold to Evalueserve • Founder and CEO, Teten Executive Recruiting, sold to Accolo, #42 on 2007 Inc. 500 • Founder and CEO, GoldNames, domain name investment bank, based in Israel • Technology M&A, Bear Stearns. Largest group by revenues. • Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online (TheVirtualHandshake.com) • Harvard MBA, Yale BA, both with honors • Contact: info @ teten.com © Teten.com
Slide 4: Intro Tradition Social Media Tells Network Next Steps Why should I care about social media? •Because 3 out of 4 Americans use social technology. (Forrester, The Growth Of Social Technology Adoption, 2008) •2/3 of global internet population visit social networks (Nielsen, Global Faces & Networked Places, 2009) •Visiting social sites is now the 4th most popular online activity—ahead of personal email. (Nielsen, Global Faces & Networked Places, 2009) •Visitors spend 5 million minutes per day on Facebook. (Facebook) © Teten.com http://www.slideshare.net/mzkagan/what-is-social-media-2005829 . http://www.flickr.com/photos/sreejithk2000/2385193167/sizes/l/
Slide 5: Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 6: Intro Tradition Social Media Tells Network Next Steps Capital Raising – Traditional Methods Warm Introductions Warm Introductions Personal networks • Increasing trend towards funds adding dedicated Raising of principals Capital professionals Placement Agents • Expensive Limited Partners • Always easier to tap old investors than new Conferences/ • Legal ways to broadly market your fund industry associations Communications • PR with investors • Newsletters • White papers Business • Technology transfer offices at major universities relationships with • Approaching pension fund of large companies in whom potential investors you are an investor © Teten.com
Slide 7: Intro Tradition Social Media Tells Network Next Steps Network Valuation Formula Ch Co R S I N D = = = = = = = Character Your Firm’s Competence Relevance of the contact Strength of your relationship Information Number of people Diversity = D * ∑ (Chn*Con *Rn* Sn*In) n=1 © Teten.com David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com) N
Slide 8: Intro Tradition Social Media Tells Network Next Steps Balance of Strength and Numbers Average Strength = Minutes Available / Person Number = # People therefore… Average Strength * Number = Total Minutes Available vs. © Teten.com
Slide 9: Intro Tradition Social Media Tells Network Next Steps Firms Fail to Capitalize on Their Internal and External Networks • Knowledge is not readily searchable • Knowledge is not retained when employees leave • Relationships are not visible • Relationships are primarily tied to colocated people • Millennials expect and embrace social technologies © Teten.com Forrester Research/David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online. http://www.flickr.com/photos/pagedooley/2494191157/sizes/l/
Slide 10: Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 11: Intro Tradition Social Media Tells Network Next Steps “Web 2.0 is the business revolution … caused by the move to the Internet as platform, and an attempt to understand the rules for success on that new platform. ” - Tim O’Reilly © Teten.com http://en.wikipedia.org/wiki/Web_2.0, http://flickr.com/photos/oliversteiner/326174717/sizes/o/
Slide 12: Intro Tradition Social Media Tells Network Next Steps Social Media © Teten.com http://www.flickr.com/photos/briansolis/2735401175/sizes/l/
Slide 13: Intro Tradition Social Media Tells Network Next Steps Benefits of Online Networks • Searchable • Crosses boundaries of time and space • Passive presence • Ease of forming groups • Reduced time and expense • Greater visibility © Teten.com http://www.flickr.com/photos/uaeincredible/3333223048/sizes/o/
Slide 14: Intro Tradition Social Media Tells Network Next Steps The Virtual You • Corporate • Personal • Your digital trail © Teten.com
Slide 15: Intro Tradition Social Media Tells Network Next Steps The Future of Online Networks • Online business relationships mainstream • Technology available now • Early adopters reap maximum benefits • Technology required to overcome some barriers, but education is solution • Systems that address privacy and time concerns will be leaders © Teten.com http://www.flickr.com/photos/extraketchup/748452643/sizes/o/
Slide 16: Intro Tradition Social Media Tells Network Next Steps Transition: Web 1.0 Parameters Governance Communication Channels Information Discovery Information Retrieval Information Aggregation Marketing, Selling Content Control Content Structure Applications Technology © Teten.com Web 2.0 Web 1.0 (Read) Top-down People to Machine Search and Browse Transactional Portal, Commercial Aggregators Push, Contextual Publishers, Aggregators Documents, Pages Closed, Proprietary HTML, Solaris, Oracle Web 2.0 (Read-Write) Bottom-up Machine to Machine and People to People Publish and Subscribe Relationships Micro-Aggregation Conversational, Personal Content Authors Tagged Objects Open, Standard-based XML, AJAX, RSS, PHP, MySQL, XQuery Partially sourced from: “Web 2.0 the Living Web and Putting “We” in the Web”, Bebo White, University of San Francisco (http://www.rthk.org.hk/mediadigest/20060915_76_121128.html)
Slide 17: Intro Tradition Social Media Tells Network Next Steps Powerful Emails • Direct E-mail • E-mail Signature © Teten.com http://www.flickr.com/photos/misbehave/2352753067/sizes/l/
Slide 18: Intro Tradition Social Media Tells Network Next Steps Toolkit • Email groups file • Profiles file • Standard emails © Teten.com http://flickr.com/photos/neilt/2517652/sizes/o/
Slide 19: Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 20: Intro Tradition Social Media Tells Network Next Steps Tells of Potential Investors • Investors with particular industry expertise • Investors with experience investing in certain geographies © Teten.com
Slide 21: Intro Tradition Social Media Tells Network Next Steps Databases © Teten.com
Slide 22: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 23: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Biography Analysis Software © Teten.com
Slide 24: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Biography Analysis Software © Teten.com
Slide 25: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Case study: Daniel Zumino •Prominent French angel investor •November 1999: Sent mail to Stanford GSB alumni list seeking capital for startup •March 2000: Raised $8m through referral from alum © Teten.com David Teten and Scott Allen, The Virtual Handshake: Opening Doors and Closing Deals Online (www.TheVirtualHandshake.com)
Slide 26: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Website © Teten.com
Slide 27: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Relationship Capital Management Software Relationships ranked by Strength Email traffic patterns, address books, billing systems, employment history, etc. See which colleagues have best relationships to target Privacy Access Layer configured for firm’s culture Leverage Software, Contact Network Corp., others…. © Teten.com Contact Network Corporation (ThomsonReuters)
Slide 28: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Multiple Media • Phone • Email • Instant messaging • Internet telephony (Skype) • Web conferencing • SMS • Twitter http://flickr.com/photos/re-ality/41676755/sizes/o/ © Teten.com
Slide 29: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from Business Cards © Teten.com
Slide 30: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from Email and Files © Teten.com
Slide 31: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Data from the Cloud © Teten.com
Slide 32: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Targeting • Directly-relevant funds • Fast growth funds © Teten.com
Slide 33: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity From Cold Calling to Warm Cold Calling Source of Lead business directories, company listings, company websites All of the methods above, plus virtual communities, blogs, job networks, email lists, biography analysis, etc. © Teten.com Result Ice Cold Call Success Rate Low response rate Warm Cold Call Higher response rate
Slide 34: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Socialtext Wiki Case Study: Dresdner Kleinwort Investment Banking problem solution benefits • Heavy dependence on email communication & meetings for decision-making • 5,000 wiki users • Reduced meeting times by 50% • Reduced email traffic by up to 75% • Adoption outpaced corporate intranet usage within six months • Wiki today: 6,000 pages & 100,000 hits per month Socialtext © Teten.com
Slide 35: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Gated Communities for Executives • IERGOnline.com • INMobile.org • Sermo.com © Teten.com
Slide 36: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Gated Communities for Investors Private Equity Focus • ACG.org • Angelsoft.net • Finemrespice.com/subrosa • Village.Albourne.com Public Markets Focus • FTAlphaville.FT.com/longroom • SumZero.com • ValueInvestorsClub.com • Village.Albourne.com © Teten.com
Slide 37: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Mailing Lists and Discussion Forums • Customize standard intro • Lurk before you leap • Dive in, but don’t splash © Teten.com http://flickr.com/photos/kaibara/1231278142/sizes/o/
Slide 38: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Virtual Community Platforms / Social Network Sites • Groups.Yahoo.com • Groups.Google.com • Grouply • LinkedIn • Xing © Teten.com
Slide 39: Intro Tradition Social Media Tells Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity Take One Step • By industry • By geography • By personal characteristics © Teten.com http://flickr.com/photos/extranoise/169187125/sizes/l/
Slide 40: Intro Tradition Social Media Tells Network Next Steps • Introduction • Traditional Methods of Raising Capital • Social Media • Tells of People and Funds You Want to Know • Capital Network • Next Steps © Teten.com
Slide 41: Intro Tradition Social Media Tells Network Next Steps Social Media is a better platform Parameters Character Competence Relevance Strength Information Number Diversity © Teten.com Face-to-Face Judge by a handshake Personal resources Semi-random Limited channels Poor visibility Small Restricted by time, space Social Media SEC filings Enterprise resources Focused, searchable Multi-media Detailed, current data Large Crosses time & space
Slide 42: Intro Tradition Social Media Tells Network Next Steps Continuous Learning Free copy of the book available at TheVirtualHandshake.com © Teten.com
Slide 43: Intro Tradition Social Media Tells Network Next Steps Maximize Value of Company Contact Database © Teten.com http://flickr.com/photos/misterdna/49841409/sizes/l/
Slide 44: Intro Tradition Social Media Tells Network Next Steps Maximize Value of Company Contact Database • Goal: Increase benefit Company receives from its global contact database, and identify new investment opportunities in doing so. • Process: – Gather data from individual executives’ contact databases (e.g., Blackberry, Microsoft Outlook) into Company central contact database. • Request from members of Company’s outside advisor network information about their highvalue contacts, e.g., CEOs of companies with over $200m in revenue. – Run contact database against multiple Internet database providers (e.g., InfoUSA, Jigsaw, Spoke, etc.), in order to update and verify accuracy. – Call individuals on an as-needed basis to verify database accuracy. – Produce “Change Reports” indicating which contacts have changed jobs, since their change in status may correlate with a new investment opportunity. E.g., an investment banker at Bear Stearns may have moved to Citadel. The past Controller of a client company may now be CFO of another media company, which could become a client. • Deliverable: Accurate database of past and current relationships. Company team can reach out again to touch base with old clients/colleagues. • Estimated # person-minutes per updated contact: 20-40 minutes © Teten.com
Slide 45: Intro Tradition Social Media Tells Network Next Steps Conference Attendance Optimization © Teten.com http://flickr.com/photos/oxfam/2087484701/sizes/l/
Slide 46: Intro Tradition Social Media Tells Network Next Steps Conference Attendance Optimization • Goal: Maximize ROI on conference attendance. • Process: – Company team member identifies conference which he/she plans to attend. – Team member obtains list of attendees that meet given criteria, e.g., CEOs of companies with over $200m in revenues. – Cold caller solicits all attendees’ secretaries, and asks, “Do you have 15 minutes to meet with ----- from Company, who will be attending the ----- conference with you?” • Deliverable: Company investing team member has packed schedule of meetings. • Estimated # person-minutes per conference attendee: 30 © Teten.com
Slide 47: Intro Tradition Social Media Tells Network Next Steps Any questions? Slides available at www.Teten.com © Teten.com