Articulation, not Gesticulation

By David Cremin

Lots of hand waving and pay no attention to what’s behind the curtain. 

That’s what I mean by gesticulation.  Sometimes, when entrepreneurs are presenting to us, we hear all sorts of buzz words and see lots of slides, but most of the time the number of words and slides is inversely proportional to the opportunity or the health of the business. 

I advise a lot of startups not only through my work as a VC, but also through my role as a Venture Partner with the awesome Techstars accelerator organization.  I try and help every one of these startups understand that most VCs want simply to cut to the chase on the business opportunity.  In my experience, what VCs are always seeking to understand is, in a nutshell:

• What do you do?

• Why is it interesting as a business, meaning, how big can this get?

• Why will you win, meaning what advantage do you have, so that you can be the #1 winner in the category?

• Why are you raising money, meaning what business milestones will you achieve if you raise money, and in what timeframe?

• Why is the team uniquely capable to go do this?

From this informational launchpad, if we VCs need to learn more, we can choose to dig in around areas of interest or concern (or simply choose to decline). 

I recently saw a company presentation that pitched it’s opportunity to disrupt the healthcare industry from billing to patient care and physician motivation, using SaaS, electronic medical records, practice management, wellness blockchain records, IoT devices, acquisition management, managed services, real estate facilities management, remote patient monitoring, telemedicine, predictive analytics, machine learning, augmented reality and artificial intelligence.  Oh, and the company diversified its risk.  

Boy, this is a lot of hand waving.  BTW, most of my VC colleagues glaze over regarding companies that pitch like this, using every buzz word known to the industry.  I wish I even knew what this company does?   Bottom line, without feeling any disrespect, because I’m sure the company has merit, and it’s hard to be an entrepreneur, I redirected the pitch to the pass file.  If they can’t tell me what the business does, how can they tell a customer?

Why not tell us what simple business you’re in?  Why not explain how big a market it is, and why you have a unique opportunity to grab the market?  Why not tell us how you’ll use a little bit of capital to achieve some very important business milestones?  Why not tell us why you are the best team to go do this?  Why instead would you obfuscate, and beat around the bush and use a lot of jargon?  Are you trying to baffle them with bullshit?  No, you should be trying to help an investor understand why putting capital to work will create extraordinary value in a compressed timeframe. 

VCs make a lot of bad bets.  At Frontier, we have our fair share.  That’s the business we’re in.  But if you asked us in the wake of a company failure, in retrospect would we make the bet again, we are able to go back to our investment thesis at the time and tell you why we made the bet, and why, based on what we knew at the time, we would make the bet again – I’m guessing 99% of the time.  It’s because in partnership with the entrepreneurs, we could articulate answers to the key questions asked above.  

So instead of gesticulating, hand waving, buzz wording, and jargon dropping, why not resort to articulating? 

Articulation, not gesticulation. 

Equal pay? But of course!!!

I have three daughters.  They are all forging professional careers.  When I found out that Syndio aspires to eradicate compensation disparities in the workplace for women, minorities, etc., Frontier was sold on the concept.  Why?  Because we have seen our daughters and friends struggle with this very problem in their respective jobs.  Frontier therefore seeded the company to build this “pay equity” solution and test it out in the enterprise market.  In a time when focus on fairness, pay equity, and women’s rights are, thankfully, is at an all-time high, Syndio has been able to gain the trust and commitment of many high profile enterprises like Nordstrom, Slack, Adobe, Vimeo, and others.  Syndio’s solution not only supports a legal compliance, but frankly an ethical requirement.  

So today, when the company announced (click here) its first institutional round co-led by venture capital firm Voyager Capital and Emerson Collective, the organization that does a mix of nonprofit and for-profit work on behalf of Laurene Powell Jobs, we at Frontier couldn’t have been more excited and committed to seeing Syndio drive its mission and expand its footprint, in the U.S. and around the globe. 

At Frontier, we are blessed to be able to collaborate with amazing entrepreneurs, and Syndio’s Maria Colacurcio is a poster child.  In an insane time, she showed remarkable sanity, poise and grace, all while working from home with her SIX children.  

Kudos Maria!!!  And thank you for including Frontier in your journey. 

Maybe the Sky Isn't Falling?

At Frontier, we’ve been thinking a lot about the overall economy lately. We consider it our responsibility to look around the corner to see what challenges might be coming to face the fund or its portfolio companies. For example, in 2007, we advised each of our portfolio CEOs to raise as much capital as they could because we got the feeling that things were going to get tight. It turns out they did! I seem to be surrounded by people who think that the economy is going to tank soon. They say, “it has to happen, it’s part of the cycle.” I agree. And history suggests they are likely correct, at some point. That being said, I can’t seem to find one driver that is going to tank the economy.

Ah, of course events happen, and we can’t always predict. However, as I look at the metrics of many of our portfolio companies, and the metrics of many, many good public companies, I see fantastic businesses, growing, getting customers, driving revenue, increasing value. In 2000, many of the household name internet companies had no supportable business models (OK, that’s happening today too…but less, I think). That’s why the bubble burst. And the banks meltdown in 2008 took everything down with them, even good businesses. I can’t forecast this happening any time soon. Can you? And then you take into account the $144B of VC dry powder being reported by Goldman Sachs in November, and we just think that good companies can still be rewarded, and that the economy feels fairly strong. Several of our portfolio companies are growing well and raising required capital. And our VC colleagues are seeing the same activity in their funds. So, we were interested to read Rey Mashayekhi’s article in Fortune last week: (click here).

Maybe things aren’t quite that bad?

Maybe the sky isn’t falling?

Send in the Drones!

By David Cremin

We all know that drone technology is mature, and the presence of drones is broad, and growing.  The growth comes from both military and consumer usage.  Consumers are increasingly “playing” with drones in all kinds of ways and some of that playing has caused issues.  We all read about drone interference during the firefighting efforts in the Santa Barbara fires a few years ago.  And Gatwick airport.  Obviously, military drone use is sophisticated and growing.  How about recent events at oil fields in Saudi Arabia?  

And then in a 24 hour period I read two eye opening articles:

1.       Time Magazine: America needs a new strategic triad ; and

2.       Los Angeles Times:  FAA certifies UPS for drone deliveries with few limitations

Ever see a brown truck on the road.  Yeah!  The skies are going to be full of brown drones!!!  And our enemies can use drones to access us anywhere, pretty easily. 

We were thinking about the unintended consequence of drone technology a lot after the Santa Barbara fires, and it was one of the drivers for us to provide seed stage capital to Whitefox Defense in 2017, along with Stage Venture Partners, Serra Ventures and Okapi.  We met founder Luke Fox when he was experimenting with his innovation to “mitigate” a drone when and where it wasn’t wanted, or deemed dangerous.  Mitigate means, returning a drone back to its unaware teenage operator, or guiding the drone to a safe place, or dropping it on the spot.  Whitefox makes all this happen instantly, in real-time, enabled by advances in mobile and connectivity.  We believe Whitefox is unique, and a very timely solution; these two articles simply amplified for me the importance of drone airspace management. 

What I Learned Pitching The Richest Man In The World

In August of 2011, I had the fortune to be invited to meet and pitch Carlos Slim, who was the richest man in the world at the time.

The meeting was a favor to Carlos’s friend Eduardo Verastegui, who is best known as a Mexican Telenovela star and is a true gentleman. Eduardo and I had struck up a relationship through our mutual friend, entrepreneur and venture capitalist Dan Peate. Eduardo suggested that one of my portfolio companies might be of interest to the Slim family, so Eduardo, Dan, and I flew to Mexico City to pitch the opportunity.

Dan and I are investors together in the company, but as the lead investor and executive chairman, I was responsible for making the pitch. As we walked into Carlos’s office around 7:30pm, he informed me through his translator that we had 15 minutes.

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