[graycat]

As I've explained in overwhelming detail in this thread, I sent about 800 e-mail messages to VCs and got back essentially nothing. What I sent was never like what I posted here for the technical HN audience.

For nearly all the 800 or so, I started with something very short, e.g., an executive summary or an elevator pitch. I gave a sample below at

https://news.ycombinator.com/item?id=15283099

and will repeat it for you here:

--- 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.

That pitch or anything like it, just that, or with more below, as text in e-mail or in a nicely done PDF foil deck, revised dozens of times, polished, etc. is a non-starter. No VC in the country will touch it with a pole 5 miles long.

My other posts to this tread today have some guesses just why.

When I first considered VC funding, I had some projects that needed some equity funding. No VC wanted to fund those projects.

So, I cooked up my present project with planning that I could take the project to live on the Web, good revenue, plenty of revenue for rapid growth, with that growth plenty of revenue for much more rapid growth, ..., all the way to a very successful company and, maybe exit and lots of financial security for myself and my family, all as 100% owner with no equity funding at all. Well, I'm nicely on track for just that, with the software in alpha test and essentially ready to go live.

I just didn't want to depend on VCs or report to a BoD.

I still have some interest in VCs as, say, backup in case of some financial emergency or just as sources of feedback.

But I've found that VCs essentially, it's easy to conclude, just really hate everything about my work! Everything! Really hate!

I wasted a LOT of time contacting VCs, for all the projects I've tried including the present one. My view is that VCs have Web sites that mislead entrepreneurs, get the entrepreneurs to contact, often strain to contact, VCs, and then the VCs, finally apparently with perverse pleasure, just ignore the entrepreneurs. The claims on the VC Web sites are 90+% total BS.

So, I didn't get pissed -- I got way beyond pissed.

But I've mostly gotten over being pissed -- I just accept that VCs are a bunch of losers that, on average, actually are not making much money.

So, here on HN, in response to the OP, I am responding to warn other HN entrepreneurs that mostly VCs are just a waste of time. Even if you get their check, you have to put up with them on your BoD, and that's not going be a picnic either.

[zimpenfish]

I know nothing about your idea and please don't consider this a comment on that but ...

> 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.

VCs almost certainly hear this kind of claim multiple times a week and are thoroughly experienced in how frequently this turns out to be true (practically zero) - hence without some kind of demonstration or hook they can anchor themselves to, it's going to go straight in the bin.

[graycat]

Nonsense. If VCs can do simple arithmetic, they can verify that claim for themselves. The issue is just the 1 billion users, and that's easy enough to believe with the explanation of the problem I'm solving because it is obvious that the problem is pressing to nearly every Internet user in the world.

Then the question is how the heck to solve the problem, and why I have a solution and no one else does. The answer there is my original applied math. Sorry 'bout that, but I'm fully capable of doing such math, have done good original math back to high school, and have a Ph.D. from a world class research university and peer-reviewed publications as evidence. For the e-mail I sent SUSA, I included a PDF of one of my papers that clearly shows good math ability; I included the PDF and also the reference to the paper on the shelves of the research libraries. The journal for the paper? Information Sciences, an Elsevier journal. Fully serious stuff.

Exceptionally good projects are what the VCs need, e.g., "another Google", and that's what I write them about.

To take my claims seriously, sure, the VCs and I would have to communicate further. E.g., one poster here says that my pitch should be about five words on one, line, short enough to be just the subject line of an e-mail. I've done that, too, e.g.,

$1 T Quickly

or some such with the e-mail body with an elevator pitch of just 2-3 sentences. That gets ignored, too.

IMHO, a lesson for HN people if they want is what I did or didn't write is just irrelevant. Instead, nearly no VC will ever read an unsolicited e-mail. They all go "straight to the bin".

For the really solid evidence of "demonstration or hook," that would be when I have $2 million a month in revenue, right? Then they can give me a call, and I will look up when I wrote them and told them what I was doing that they ignored. So, I'm at $2 million a month, and they want to buy 30% of my company for a seed round of $1 million? And I should be thrilled by that?

> VCs almost certainly hear this kind of claim multiple times a week and are thoroughly experienced in how frequently this turns out to be true (practically zero)

Right. So, they'd be a lot happier if I projected only 1 million good users instead of 1 billion, a company worth $1 B instead of $1 T? I'd be just the same: Again, once again, the VCs ignore unsolicited e-mail messages, no matter how short, long, rough, polished, etc. The VCs believe that any entrepreneur who sends anything to [e-mail] is a fool. Maybe so. But, who is the fool, the entrepreneur or the VC who invites entrepreneurs to send to a black hole?

E.g., as elsewhere in this thread, SUSA claims to "seek out" good startups. Well, they don't "seek" very far if they ignore their e-mail.

The US is awash in people and institutions that can do really accurate evaluations of projects described just on paper. In fact, they insist on descriptions on paper, and projects that pass such evaluations are high payoff and low risk. Examples include GPS, Keyhole, the H-bomb, stealth, and much more. High end engineering projects are done that way -- on paper. There is hardly a single VC in the country qualified to evaluate such papers. For the organizations, e.g., NSF, DARPA, ONR, Army Durham, Air Force Cambridge, CIA, NSA, etc. hardly a single VC in the country is qualified for such a job. The core technology comes from the best US research universities, and hardly a single VC in the country is qualified for a faculty slot at such a place. For commercial work, the IBM Watson lab is comparable, and I've been a research scientist there on an AI project, wrote and gave a paper at an AAAI IAAI conference at Stanford, etc. There's hardly a single VC in the country qualified to do that.

There are not very many projects good enough to be "another Google", and the ones that are the VCs can't evaluate.

So, I have a lesson for HN readers: The VCs are not good partners in a technology project and won't read their e-mail. For warm introductions, they don't know the right people.

[zimpenfish]

> If VCs can do simple arithmetic, they can verify that claim for themselves.

How? You haven't given them anything to -verify-! All you've done is say "It'll be worth $1T because lots of people will give me lots of money. Trust me."

> it is obvious that the problem is pressing to nearly every Internet user in the world

I should imagine the VCs hear that every week too.

> $1 T Quickly

Apple is the world's most valuable company (worth ~$830bn). No-one seeing your claim that your company will be worth more than Apple "quickly" will take it seriously. There just isn't any path for that to happen in reality. Sorry.

[graycat]

> There just isn't any path for that to happen in reality.

Sure there is. I can give a good argument, with solid, original applied math in PDF from Knuth's TeX (not LaTeX) and with running code.

Even if I'm wrong, or get run over by a truck tomorrow, for you to be correct means that forever no company will achieve my claim. Forever is a long time!

As I give a good explaination, soon it gets totally obvious. I wouldn't be doing this project or saying this otherwise.

Do lots of people see the opportunity? Nope. With a little explanation, everyone on HN will see the problem right away. In a sense, they see the problem now. But they ignore or reject the problem because, like death and taxes, they see no solution. Like you, you see no possibility. Even if I blurt out the problem here on HN, essentially no one will see the possibility of a solution. So, now, when they see the problem, since they see no possibility of a solution, they ignore the problem.

But the solution is not trivial. I don't see a solution without my applied math. The core of the math is some solid, significant theorems and proofs. The main prerequisites are some advanced pure math topics. The prerequisites are totally, fully, beautifully written up and on the shelves of the research libraries, but the material is not popular in the US. Fewer than 10% of US math profs know this material. Some of what that material says is amazing, and nearly no one would think of it on their own -- apparently no one ever has. I got the material from a prof a star student of a prof at Princeton, and I got it from some books by some star students of a prof at Berkeley. It's solid stuff.

For the $1 T, see some of my other posts to this thread. How to do that? First, start with the idea that essentially everyone on the Internet has the problem and currently it is solved at best poorly. That there could be such a problem is not surprising -- the Internet doesn't yet do everything people want! You will see this problem and how people have ignored it as I announce my beta test on HN. The alpha test is in progress now.

For a little more, so, as you know, there are ballpark 3 billion people on the Internet, if we include smartphones, which for my solution we should. But for good ad rates, I intend to count only users in the more developed countries. There my gross, ballpark figure of number of users is, in round numbers, 1 billion. If you have a better number, then let me know.

Okay, when you see the problem and my solution, you will maybe willing to swallow that, early on users will come to my Web site once a month, then, after some weeks, once a week, then as they start to really like the results, see how to use them in their life, in their family, with friends, for work, etc., they may come to my site, rough, guess, ballpark, average 3 times a week.

Really, that's about enough for $1 T: If can get 1 billion people to come to a Web site 3 times a week for nearly anything, should be able to monetize that to biggie numbers. Add in some more ballpark details, and get to $1 T.

For some more details and the actual arithmetic, see

https://news.ycombinator.com/item?id=15287990

> > it is obvious that the problem is pressing to nearly every Internet user in the world

> I should imagine the VCs hear that every week too.

"Hearing" it is not the point. A claim, like essentially all significant claims, is worthless. In math terms, that's just the statement of the theorem. To be taken seriously, there must follow a proof. Same in law, finance, engineering, etc. -- need evidence.

Lots of people here at HN have advised me to get my descriptions of my project much shorter, including down to just a few words on just one line. In that case, the description is just, say,

$1 T Quickly

So, that omits all the evidence. Some people want evidence; some people want just the bottom line. IMHO, VCs mostly want a product they can play with or better, still, traction, in particular revenue, better still, earnings, and for all of those, significantly high and growing rapidly.

An entrepreneur who starts has none of those. So, there should be ways to know long before earnings significantly high and growing rapidly. And, in nearly all of applied science and engineering, there is. For just one example, there is GPS: It was funded long before the satellites were on the rockets and on their way into orbit. It was funded off paper, just paper. And, given the paper, the project was, really, low risk.

I've explained my project to VCs. They don't want to read. I can explain on paper in lots of detail, but they won't read it. Indeed, they won't read anything from a guy like me because they won't read unsolicited e-mail.

The bottom line of this situation is that by the time I have what the VCs want to write a check, I will no longer need, want, or accept their check. I can do this because I'm a sole, solo founder with tiny burn rate, opex, and capex so that any revenue of $10,000 a month or more gives me and my project all I should need to go for the $1 T.

My main point here was to respond to the OP and warn HN readers.

[CalRobert]

Brevity is the soul of wit.

-Shakespeare

[rpedela]

Here is some constructive criticism for your pitch.

* It needs to be specific on what you are building. The Stripe blog post talks about that and gives good examples.

* Avoid flowery prose like your first sentence, and "BTW speak" such as inside the parentheses.

* Avoid talking about or implying the need for an NDA such as inside the parentheses. That is the fastest way to get ignored.

* Avoid unrealistic claims like the company being worth $1T. In fact, avoid talk about company worth all together however saying my market is X and the market is worth Y is good as long as the numbers are based on research.

[graycat]

I've done all that. It doesn't make any difference. I explained more, and more carefully here, but that was just for the HN audience.

Why not make any difference? (1) They will nearly never pay any attention at all to unsolicited e-mail. (2) If they do read anything, they will essentially always look for something about traction and not seeing that will junk the e-mail.

The reactions about traction are so uniform that I have to conclude that they all have a common source, and that would be VCs agreeing (required to agree) with their LPs, and the LPs coming together to agree on traction, etc.

I don't write such involved prose to VCs with, e.g., lots of details in parentheses. I accept that VCs want to zip through text at about the fourth grade reading level.

I've never mentioned an NDA to a VC, and I doubt that a VC would want to look at my core math or have it reviewed outside -- my guess is that VCs just don't do that. I mention the math because without it there's no way known to accomplish what my work does.

For the $1 T, that's easy enough to justify at the back of the envelope level: Assume 1 billion people connect for a few sessions a week with each session from a few minutes to 30 minutes or so. On average, each session shows them about 5 ads per page for about 20 pages, 100 ads. Assume the Mary Meeker $2 per 1000 ads displayed. Assume a reasonable P/E. Multiply it out for yourself. If assume more, especially better ad targeting, which my data and math permits, then can get several times $1 T. For a back of the envelope estimate, the $1 T is fine. Look, it's simple: My work is an excellent, the first good, solution, so far with the best solutions poor, for a pressing problem for essentially every user of the Internet in the world. We're not talking niche here, or just teenagers, or just dog lovers, cooks, restaurant fans, etc. For the more advanced countries, get maybe as a standard Internet application 1 billion people. Then multiply that out. There's nothing outrageous about the $1 T.

Okay, I'll do the back of the envelope arithmetic for you:

Assume 1 billion users from the more developed countries. On average each connects to the site 3 times a week. Each connection lasts on average 30 minutes where they see an average of 5 standard sized ads per Web page and see 20 Web pages. The revenue is KPCB Mary Meeker's $2 per 1000 ads displayed. So revenue is

     12 * 1 * 10**9 * 5 * 20* 3 * 4 * 2  /
     1000 = 28,800,000,000

a year. That's nearly all pre-tax earnings; the opex and capex are in the round off numbers.

Assume have 40:1 P/E (I'm ignoring tax details here) for a market capitalization of

     40 * 12 * 1 * 10**9 * 5 * 20* 3 * 4 * 2
     / 1000 = 1,152,000,000,000

So, in round numbers that's $1.2 T.

With the good data from the users and some more math of mine, I should be able to do better ad targeting and get, maybe, $6 per 1000 ads displayed for market capitalization of

     40 * 12 * 1 * 10**9 * 5 * 20* 3 * 4 * 6
     / 1000 = 3,456,000,000,000

or $3.5 T.

There are some options for some virality that should raise the 3 visits a week to 6 for

     40 * 12 * 1 * 10**9 * 5 * 20 * 6 * 4 * 6
     / 1000 = 6,912,000,000,000

or $7 T.

Gee, it's just simple arithmetic.

With some resulting changes in culture, such as we've seen often enough in information technology in the last 10-20 years, the numbers could go several times higher, but I'll omit that.

Okay, I only get 500 million users and only $3.5 T.

Lots of people see the problem; they don't say anything about it because they see it as like death and taxes, something that can't be fixed. They assume the problem can't be solved because they don't have even as much as a weak little hollow hint of a tiny clue about how to solve the problem. That's common, standard: E.g., Henry Ford said "If I'd asked people what they wanted, they would have said a faster horse." Well, they didn't believe in a faster horse and had no clue about a car. So, they didn't say anything. It's that way on the Internet now; people don't see a solution so don't say anything. Same for the Internet itself before the Internet.

Uh, some original applied math processing some good data can be some good stuff. The US DoD has known that for a long time; so has the NSF; VCs have yet to learn this lesson.

At one time a VC could have had 20% of my company for $500,000. Not now!

That would have been

     0.20 * 3.5 * 10**12 / 500,000 =
     1,400,000

ROI. The VCs ignored me. Hundreds of them.

Lesson to HN readers: VCs are low quality people, losers; don't waste time with them.

I'm no longer looking for VC funding; it's hopeless. I don't really need VC funding. So, my point here is to do a big favor for HN readers and push back against a lot in the OP.

[rpedela]

The problem with going around talking about a startup having the potential to be a $1T business is that no current Fortune 500 business is worth that much including Facebook and Google which have your business model. Therefore you look like a fool for asserting yours will be the most successful business ever in the history of human civilization. If you were someone like Bill Gates who has a proven record of founding $10B businesses, then it wouldn't seem so crazy. But for a first-timer, yeah it sounds crazy. In fact, it sounds beyond crazy.

[graycat]

The first version of GPS sounded crazy.

The H-bomb sounded crazy.

Nearly everything we have in our daily lives now sounded crazy 200 years ago.

But, with clear details on paper, both GPS and the H-bomb projects were high payoff, low risk and not crazy at all.

"Sounds crazy" is, uh, a crazy way to evaluate projects.

[consz]

No currently existing company in the world is worth $1T. You claim your company should be worth a trillion "relatively soon."

Now, imagine what your priors are as a VC. Do you (a) believe this person's claim that he's capable of making a trillion dollar company soon, or (b) think he's a supreme bullshit artist, delete the email, and never think about it again?

[graycat]

The job of a VC is to look for "another Google", or Apple, Amazon, etc.

I know this "prior" stuff, Bayesian stuff, has a lot of respect here on HN, but it never did make much sense.

So, I should send the VCs some information that indicates I'm serious and credible. For a technology project, I do have credentials, far above those of hardly any VC in the country -- especially now that Chris Sacca retired, and I did complete my Ph.D. and Chris didn't complete his.

E.g., for credibility, SUSA says that they like to see some surprising accomplishments, big things done quickly. Well, I posted a list, (A)-(I) or some such here, and included some of those when I wrote VCs.

Here's my point for HN readers who want it: VCs don't read unsolicited e-mail messages. Since they junk such messages, it doesn't matter what is in them. VCs like warm introductions, but we don't know the same people. By the time my project looks good to VCs, since I'm a solo founder (they don't like that, either) with meager opex, I will have plenty of cash for rapid growth. E.g., if my company really is growing, then $1500 in server parts can generate ballpark $200,000 in revenue a month. Just multiply it out assuming 400,000 bits per Web page, 5 ads per page, $2 per 1000 ads displayed (from the Mary Meeker reports), much more with good ad targeting of good demographics, etc.

[CalRobert]

Sorry but you come off as a crank. Nobody reads your emails. They're too long and presume trust on the part of the recipient, which you don't have.

How many long, unsolicited, rambling emails that don't get to the point do you bother reading?

[graycat]

I'm not a "crank" at all in any sense at all. E.g., I've listed some of my accomplishments, and they are real and significant. It's the VCs who are wack-o: Commonly they are not qualified for any significant role in a technical startup. And as at

http://www.kauffman.org/newsroom/2012/07/institutional-limit...

on average the VCs have not been making much money.

My typing here is long enough to provide evidence enough to make my points. Just short assertions with no evidence are not meaningful.

VCs are commonly treated as heroes, the smartest people in the room; maybe you are upset to discover they are not.

[drharby]

Your elevator pitch told me nothing about your product or the problem it solves and is accompanied by a 1T personal growth potential.

I feel that may need to be rectified

[graycat]

Again, over again, and as clear in the "Elevator Pitch" I gave, here on HN now before my public beta, I'm omitting describing the problem.

Uh, my purpose here is to respond to the OP, not to raise funds from VCs.

I gave the elevator pitch just as an example of what, with what you want that is missing in what I gave here, VCs totally ignore.

I also gave my best argument for why they ignore: They refuse to read unsolicited e-mail messages. They insist on traction. Nearly all applied science and engineering are funded just from paper evidence, but VCs don't do this. Why? My guess is that their limited partners (LPs) don't so permit. Or, the LPs want something closer to a tangible asset that has market fit and not just paper. Okay.

The OP did not make this point clear, and to me for information technology VC funding that is the most central point of all.

But for a sole, solo founder with a good project and tiny opex, by the time a VC is ready to write a check, such a founder will no longer need, want, or accept it.

My purpose here is to respond to the OP and warn HN readers.