from Wanda.com 13 Oct 13 enhanced by Peter/CXO Wiz4biz
$10 million. As part of Greylock Partners’s mandate to “always help entrepreneurs,” Reid Hoffman has published LinkedIn’s slide deckfrom its Series B pitch to Greylock in 2004, which led to the company securing $10 million.
LinkedIn, today is one of the steadiest of the Silicon Valley giants, valued at around $24 billion, with stock trading at over 5 times its 2011 IPO price of $45.
Tactics & Mistakes are revealed by Hoffman. In 2004’s Silicon Valley, which was still reeling from the dot-com bust of 2000, investors were especially risk-averse and wary of companies without solid upfront revenue streams. Sound familiar?
Focusing on building up a huge User-base without an immediate path to revenue is a tactic that might fly today in Silicon Valley for the right idea. In a fragmented, early market with a huge gap in Series A & B funding, startups betting on multiple rounds of funding before monetizing will have a tough time convincing investors to come on board.
LinkedIn was compelling bet in 2004, which are valuable to any startup, and especially valuable today. Below are 10 key pieces of advice that Hoffman gives:
1. FOCUS on REVENUE.
This is critical for startups in Silicon Valley. In its Series B deck, LinkedIn sets forth three revenue streams (1. targeted ads, 2. job listings, & 3. subscription fees) that gave rise to its three current stream: 1) Marketing Solutions (targeted advertising, which now involves native ads embedded in its content stream, 2) Talent Solutions (LinkedIn’s most lucrative service, by which corporations & recruiters pay for premium access to candidates), & 3) Premium Subscriptions.
One Revenue Stream is enough. While its triple revenue stream is today seen as one of the company’s strengths, Hoffman cautions against presenting three streams at the outset, pointing out that, as a rule, one revenue stream will drive the business.
[ 2. Compare to Winners, 3. Lead with a simple Investment thesis, 4. Address investors’ Concerns upfront, 5. Pitch by Analogy, 6. Distinguish yourself. in Premium Content ]