You don’t need “Pedigree” to Succeed in the Silicon Valley
Notes from a non-traditional founder
Reuters recently wrote an article about the startup community and the importance of pedigree in the financing process. The article stops short of saying you need to attend Stanford, Harvard or MIT if you want to raise Series A financing. . It leaves you with a feeling of hopelessness — as if the only alternative to attending one of the aforementioned institutions is working for, Apple, Facebook, eBay, or LinkedIn. For those of you who want to start a technology company in the Silicon Valley and are discouraged by this article, and others like it, I wanted to provide you with some food for thought from a founder with a non-traditional background.
My Background
I always wanted to start a company, but didn’t find an idea that “stuck” until I was 27. I attended Claremont McKenna College, a small liberal-arts school just inside the bounds of LA County, where I majored in Economics.
After graduating, I was effectively a lost soul — in the first year, I worked for a recruiting firm in Seattle. After that, I worked in corporate finance for Lockheed Martin (post 9/11, the only industry that would hire a 21 year old was defense). I wanted to get out of Northern California so I got a job at a tier-2 management-consulting firm called Navigant in Los Angeles. This is where I met my co-founder, Ryan Buckley. After two years, I decided I hated consulting and needed a way out, so I applied to business school. I applied to three schools — Stanford, Harvard and UCLA–and only got into UCLA. I had no idea what I wanted to do, and business school felt like the only option to buy myself the time I needed to figure things out.
My Company
You can read a longer version of the story here, but it wasn’t until I got to business school that I decided to start a company with my co-founder (who is still with me at Scripted). We tried our hand at screenwriting software, and crowdsourcing screenplays, but failed. Ironically, we had zero connections in the entertainment industry, just like we had zero connections in the investment community.
I had to work a full time job at Applied Materials in M&A to keep the company afloat since we couldn’t raise outside financing. We pitched over 100 VCs and angels on the idea, and were headed nowhere fast. My co-founder, Ryan worked full time for Rapleaf for several months to keep our burn low. Ryan’s only work experience was Navigant, and a few odd jobs working on political campaigns and environmental consulting firms. Ryan could code, but did not major in CS while he was at Berkeley.
We pivoted to a freelance writer marketplace, which was when we drew interest from the investment community. One of our advisors, Vik Gupta, introduced us to Crosslink Capital who seed-funded our deal. We met one of our angel investors, Doug Feirstein, through Angel List (I cold emailed him). Once we had Crosslink and Doug onboard, the rest of the round came together thanks to introductions that they made.
We subsequently raised a Series A from Redpoint and Crosslink, due largely to how the company was performing. It was a struggle to get over the line on a Series A. At the end of the day, it was the performance of the company that got us there.
My Advice to People Like Me
I’m not going to lie — raising money and starting a company is an uphill battle if you don’t have what’s considered to be a “traditional” background. It is much easier to raise money if you are a Google product manager than if you worked for Applied Materials and Lockheed Martin. It’s also easier to raise money if you’re a Stanford CS major than if you’re a Claremont McKenna Economics major.
Entrepreneurs often forget that the job of a Venture Capitalist is as difficult as the job of an entrepreneur — VCs receive thousands of pitches every year and need filters in place to reduce the top of the funnel as much as possible. Aside from receiving referrals, filtering by school and background of the founder are both reasonable things to do.
Here are some very easy, actionable things you can do as a non-traditional founder to increase your chances of succeeding:
Put Great People Around You. Adding advisors for a small amount of equity can go a long way toward helping you succeed. Email people you admire in your industry and get them affiliated with your company — incent them to see you succeed. For us, adding DJ Patil, James Currier and Stan Chudnovsky as advisors made a huge difference in our fundraising process. Because of our advisors, we were able to bring great folks like Rick Marini, Chris Michel, Michael Birch, and others in as investors.
Always maintain relationships with investors, even if they say no. One of the investors that turned us down for an “A” round introduced us to James and Stan. Another investor that turned us down introduced us to one of our largest customers. VCs want to help entrepreneurs and will make intros if you are respectful, and follow up quickly.
Immerse Yourself in Your Market. You have to know your market inside out. The only way you can do that is by meeting other companies in your space, including your competitors. Learn about your market and gain as much intelligence as you can — that information is currency you can use for thought-leadership pieces, and investor pitches. You need to become a thought-leader in your space if you want to get financed and don’t have pedigree.
While it is an uphill battle to raise financing if you don’t have the typical Silicon Valley pedigree, it can be done. Don’t use the fact you don’t have a traditional background as an excuse for your inability to raise financing and succeed. Myself, and others like me, are happy to help you along the way.
