[graycat]

What I wrote above is for the HN audience and is not what I ever sent to a VC. But for concise:

--- Executive Summary, Elevator Pitch ---

There are about 3 billion Internet users in the world. There is a problem (I can explain very quickly but won't explain in public yet but have explained to lots of VCs) that is pressing for essentially all those users but so far solved at best poorly. I have developed an excellent, and the first good, solution, now in software about ready to go live. Ballpark, good users will visit my Web site solution a few times a week, and from simple arithmetic the company should relatively soon be worth ballpark $1 T.

Short enough?

Ballpark, there's not a single VC in the US who will touch that with a pole five miles long.

"Innovative, leading edge, disruptive, high value, low risk, low cost to start, good barriers to entry" -- has all those but no VC in the country will take even 10 seconds to look at it.

Why not? Educated guesses: (1) Most important, the VCs want traction, significant and growing rapidly. (2) The VCs hate the idea of a solo founder. (3) The key to such astounding value is some crucial, core, original applied math, and VCs have never seen a successful startup based on math, know that they don't know the math, and really hate that some math might be relevant to an information technology startup. Instead, the VCs' idea of technology is some routine C++ software or some such. (4) No one has yet built a company worth $1 T, so the VCs just reject that possibility. (5) The VCs have total contempt for anything they receive via unsolicited e-mail. For a good startup, the VCs want to hear about the company from some solid source other than the company. The VCs are totally convinced that that source of information will be plenty soon enough for their investing. (6) The VCs believe, solidly, that if my startup starts to be successful, then I will come crawling back to them, desperate for equity funding for "the big build out," the "big staff up," the "big go to market push," "the explosively rapid growth," for the necessary high rate of growth to capture the market before others do (the VCs assume that anything one startup could do other startups could easily duplicate or equal, i.e., the VCs have never yet seen anything like crucial, core, proprietary technology genuinely ahead and difficult to duplicate or equal; the VCs believe that what is crucial is just the market and any relevant technology will be routine -- false!) for their help with marketing, staffing, business acumen, more funding rounds, exit strategy, etc. Nope.

The idea that my work can get me to $10,000 a month in revenue, maybe $200,000+ a month, then that revenue could let me scale to $2 million a month, then that revenue should let me scale to $20 million a month, then that revenue should let me get a lot of office space and hire a lot of people and grow to $100 million a month, ..., to a company worth $1 T is just to be laughed at, ignored, scorned, junked, etc.

VCs are necessarily chasing things that are really exceptional, but when they hear about such a thing they reject it without even a glance because it is not what they are used to!

Maybe the VCs are jealous, already making money enough, want desperate, subordinate entrepreneurs, etc.

But they don't want me, and my startup has such low burn rate and my checkbook is still thick enough that I don't need the VCs and should be able to get to revenue of $10,000 a month at which time "no VC need call".

My Point: I wasted a LOT of time pitching to VCs, and I want to warn HN readers that VCs can be really tough to communicate with. E.g., some VCs claim that they "seek out" some really good stuff, but when send them e-mail outlining just such stuff they just ignore the e-mail.

Warning: It's a big secret in information technology VC that they take great pride in ignoring unsolicited e-mail. So, don't waste time writing them.

If you really want them, then get some traction and publicity and let them call you. Of course, if you are a solo founder with tiny opex, you may not want to talk with them!

[CalRobert]

"Short enough?"

Not even close. WTF do you do???

Slack: makes team chat and IM easy

Tesla: Makes electric cars that don't suck

Dropbox: Makes it easy to share and sync files with colleagues

You: I have no damn idea.

It's crucial to remember that any VC (really, any person) you're talking to is listening to BS 90% of the time. You MUST convince them QUICKLY that you're not bullshitting them. Your intro, which I worry you think is engaging, sounds like scammy BS ("I can solve this problem and make a trillion dollars but I won't tell you what the problem is unless you read my rambling wall of text below!!").

Related: https://en.wikipedia.org/wiki/Show,_don%27t_tell

[perl4ever]

If the invention involves "original applied math", yet is useful to ordinary people then I'm not clear on why there is harm is saying what it is, briefly. If I invent a flying car that runs on a couple of AA batteries, then saying so is not going to give away my secrets and allow competitors to beat me. It seems inconsistent to be complaining that VCs think, falsely, that your solution can be duplicated easily, while treating it as so secret you can't give a summary of what (not how) you have done.

[graycat]

> If I invent a flying car that runs on a couple of AA batteries, then saying so is not going to give away my secrets and allow competitors to beat me.

Your point is well taken, and I thought of that. But my concern is that if I explain the market opportunity, then some big companies or big VCs will rush to do something that looks like that. If my project is a flying car on two AA batteries, then they will come out with a flying car with a small engine that charges a 200 pound battery pack and can fly maybe two miles, publicize the heck out of it, and make my effort just ignored, no matter how much better it is.

Besides, as I've explained here, I've explained to lots of VCs the problem I'm solving. They don't care. They won't pay attention to any explanations. That's why here I focus on traction -- VCs won't touch my work with a pole 5 miles long, and about the only thing I don't have now is traction. So, we know the truth: What they really care about, about all they care about, is traction.

Maybe in the past that was good for their businesses, but now it's so cheap to start a company that by the time there is that old traction, a solo founder (they hate solo founders) with meager opex won't want, need, or accept a term sheet and BoD.

I admit that there are not yet very many such startups, but the door is now wide open to a golden road of just such successes. E.g., can get a 64 bit, x86 processor with 8 cores and a 4.0 GHz clock for less than $150. Can put it on a $100 motherboard in a $50 case. Can get main memory for about $9 a GB. Can get nearly all the Microsoft server side software for free in their BizSpark program.

But my point here is to do a big favor for HN readers, to push back against the OP, to explain that VCs just don't read their e-mail messages, want warm introductions but don't know the best people, etc. I've given up on VCs, e.g., have insulted them here. So, I'm pushing back against the OP as a favor to the HN audience.

Guys, save your time. Write VCs anything you want as in the OP, and the VCs will just ignore it, usually not even open the e-mail. I've just done you a big favor.

[icedchai]

What problem are you solving? If you won't explain it in public, it is suspect.

(And why do you need VC at all if you can get this going that cheaply?)

[graycat]

I don't want to explain the problem yet in public, but I've explained it beautifully clearly to essentially every VC anyone could name without a list.

My work is not "suspect"; instead, my e-mail messages are nearly all just totally ignored, short, long, technical or not, etc. Clearly, bluntly VCs just don't read unsolicited e-mail.

VCs are so consistent on this point that I have to suspect that mostly their LPs insist on it. The LPs want to think a lot like commercial bankers, want something fairly tangible as an asset. To them, paper plans, running software, analysis, explanations, etc. don't count. The LPs don't want to trust their VCs and, instead, want to trust the market, e.g., via traction. The LPs are convinced that a startup that has traction significant and growing rapidly will soon come crawling to some VCs looking for equity funding for the big, explosive growth, go to market, scale up, build out, put 100 people on it right away, etc. Maybe that idea used to be fairly solid; it's not now.

You are correct: I don't need equity funding. In the past, $100,000 after BoD, legal, accounting, etc. expenses would have helped, but it hasn't been essential. Now a check could be good to have just as an umbrella for a rainy day. Also I've wanted to get some VC feedback, but they won't do that.

But I gave up on VCs. Here I'm pushing back against the OP -- my experience is really strong, write VCs anything you want from the OP, and it will just be ignored if only because VCs refuse to read unsolicited e-mail. For a warm introduction, if you have some of the best, then VCs won't know them. If you are a solo founder and have the traction the VCs want, then likely you don't need the VCs or their check and very much don't want their vesting schedule or to report to a BoD with them controlling it.

Uh, lots of main street businesses, e.g., pizza carryouts, never get equity funding. Well, my startup is much cheaper to start in capex than a pizza carryout, auto repair, auto body repair, dentist's office, lumber yard, McDonald's, grass mowing service, well drilling company, etc. So a Web startup can be one heck of an advantage and good business opportunity.

VCs are just waiting for traction and, really, hearing about the company from just common sources but other than the company. That filter may have worked for them in the past, but it's not in the OP!

But now, it can be so cheap to start a company, e.g., with a sole founder who does all the work, that the traction filter fails: By the time a solo founder gets such traction, they won't want, need, or accept a term sheet, vesting schedule (to get back over four years some of the stock in the company they own 100% of now), and BoD (a big sink for time, money, and effort -- uh, guess who pays the travel expenses for the BoD members?).

My point here is just to push back against the OP: That description tells entrepreneurs lots of stuff that won't work simply because (A) VCs won't read unsolicited e-mail, no matter what it says and (B) want traction, so much that a solo founder with a good project and that much traction won't take the check.

I'm doing the HN audience a big favor: Don't waste your time.

[icedchai]

So why don't you find an individual partner or angel investor with a few 100K to spare?

If your idea is as good as you say, it should be simple. There's plenty of people reading this that could help you.

And I do think it is suspect you won't tell people here what you are doing. (We are not asking how. We don't want the magic / secret sauce.)

[graycat]

For partners or investors, especially angels, I'm afraid, terrified of the legal issues, time, money, and effort overhead, and disputes.

I intend to announce my beta test on HN. Then HN people will be able to see the problem I'm solving.

[icedchai]

Looking forward to the beta! I'm excited to see it.

As for the partner / angel problems, can you elaborate about what worries you? Would VCs have the same issues?

[graycat]

Experienced VCs would have fewer issues, e.g., over the years on lots of Boards have learned a lot about being a BoD member while avoiding really big Board fights.

Some of what worries me is what I've experienced with VCs so far -- we're not even on the same planet.

E.g., if the business goes well, then soon I will come to the Board with a project for some ad targeting that makes crucial use of the data only we have. The targeting has a shot at being better than what is in the industry now, primarily because the data is different (unique) and we can have better applied math for processing it (uh, my applied math might not apply well to the data, say, our ad networks have).

Why better data? Uh, as above, the data is from those on average 20 Web pages each user sees and the data they enter in response. For more, that data is from the moment and focused, actually usually uniquely well focused. E.g., I may not know what the heck the user had for lunch, but I've discovered that that he's just dreaming of breakfast with apple-cinnamon oatmeal tomorrow, just tomorrow. Presto, bingo, slam, bam, thank you Ma'am, the user gets an ad from General Mills. But it only works just then, and is useless in 24 hours.

So, I come before the BoD with this new project. For the quarterly budget, the BoD will have to approve the project. I'll direct the project but only loosely since I'm still busy being CEO. So, I'll have to hire, basically some good applied mathematicians. There will be some math, maybe some new math, but also a lot of data handling, e.g., digging into the many terabytes of the Web site log files. Might have to write some one-shot code.

The project will likely go for several quarters. The project in total can blow $1 million, more than once. Like most Ph.D. dissertations, it won't be clear just how well it will go or just when it will be done.

But, since the BoD has to approve the budget, they will have to approve the $1 million, some number of times, for some number of quarters. I have in mind roughly how to do it now, but I won't be able to stop my CEO work and will have to hire for 99% of the work.

So, I try to explain to the BoD how the project will go.

Tilt. Halt. Alarms go off. The BoD doesn't like it. They have a fiduciary responsibility to the stockholders, including themselves. No way do they want to spend $1 million at a time, at a pop.

I saw such BoD resistance at FedEx. It was about to kill FedEx. I was the guy who did some computing with a little math that turned the BoD around. Founder, COB, CEO F. Smith said at a senior staff meeting that my work "solved the most important problem facing" the company. Yup, I saved the company from going out of business, literally.

But to me, the FedEx BoD was just bonkers; there was no good reason for their resistance. They were foolish. They couldn't see rationally as far as their hand in front of their face. It was worse than trying to teach the family kitty cat to use the toilet in the garage workshop.

So, on my startup now, as CEO, trying to teach the BoD, I take out full time for half a week, put together a good tutorial dog and pony show, and try to explain what the opportunity is and how the math will go.

There's no way I can explain the math itself directly. Even among Ph.D. math profs, fewer than 10% have the math prerequisites. Among Ph.D. computer science profs, fewer than 1%.

So, since I can't actually use the math, I'll have to work just with analogies and draw some cute pictures to be seen just intuitively.

Maybe I'll get lucky, take a very simple, basically just a first-cut guess, at the math (remember the targeting math is not all done yet!), take some data from the log files, write a little prototype software, get lucky, and show that the targeting works better, say, goes from the Mary Meeker's $2 per 1000 to $4.25 per 1000. Uh, with everything else constant that more than doubles revenue. And, if that works for ads based on actual sales, the result, for those ads, could go to IIRC ballpark $50 per 1000.

That work could take me longer, maybe three weeks away from my CEO duties. I'd have my door closed, and when the COO, head of HR, Chief Counsel, and CFO pounded on the door, I'd have to tell them to work it out on their own.

So, the big day comes, and I pitch to the BoD. Soon they start looking at their smartphones. There is little so painful as listening to an advanced math lecture where don't have even a clue about even the basics, especially when are supposed to understand the stuff, even when I try to make it easy. The first BoD Member gets an urge, soils his chair and the carpet as he rushes to the men's room. Soon I'm the only one in the Board room; all the rest of the BoD has visited the men's room and retired to a bar down the block. There I get a new title, Senior PIA, pain in the ass. The ad targeting project is cancelled. All the BoD Members are pissed.

Later the rest of the BoD Members meet and can't decide what to do, and I've got a big BoD fight on my hands. All the rest of the work stops to settle the BoD fight. The company ship is starting to leak slowly.

So, BoD squabbles.

"Partners"? The famous co-founder disputes, e.g., with the usual, some chance of a nice short term gain but with a risk of a long term loss, say, a big anti-trust issue, a user privacy issue, some accusations of collusion in restraint of trade, pissing off some EU regulator. So, make some extra money for six months and then work off and on for years trying to clean up the mess.