Startups ahoy
I think that startups can all do with a peek into how we each practice so that we can actually exchange best practices.
Let’s give it a go.
From today, I’m going to start sharing different emails, pitchdecks and other materials to engage my fellow founders in being better together.
Let’s become a forest of mighty oaks rather than a lonely willow perched on a precipice.
Passo update I sent out recently:
Subject: [Passo] New CEO, update, thoughts on ICO, and Impulse Ventures terms sheet
I like to keep people in the loop about Passo. This is how I did it recently.
Hi <Insert name>
Happy Sunday! Hope that you’re enjoying the return of Summer.
It’s been a while since I last updated you, and reaching out to update you on what’s happening at Passo.
Most importantly, I’m humbled and proud to announce that I’ve taken up the mantle as CEO at Passo.
I’m lucky enough to be working with some of my closest and talented friends on solving a meaningful problem. Below is a bit of an update on where we are at and opportunities for you, friends and portfolio companies to collaborate.
Below are updates on:
- Recap
- Team
- Product update aka: hotness under the hood
- ICO discussion
- Funding round led by Impulse Ventures
1. Recap on what Passo is all about:
Passo gives shoppers the ability to manage and share their web-wide purchase history and verified shopping preferences with any retailer, resulting in more relevant product recommendations, which has proven to significantly increase transaction conversion up to 22%.
By being the only solutions that has a full view of the shopper based on their purchases at all retailers across the web, we can provide the most personal shopping experience on each retail site and eliminate the pain of search. You don’t find the products… the products find you.
It’s a single shopper profile that allows retailers to get the full view of the consumer across all retailers, whilst giving shoppers control of their data and Amazon-like benefits across the web such as accurate recommendations, centralized shipping tracking and order management.
A video of what our MVP looks like on a retailer site: https://youtu.be/qqo7IMs-oHA
Consumers finally get:
- to see who has access to their data and control it (think blockchain integration, more on the ICO below)
- the best recommendations on every site they visit based on a total view of their purchases across the web. When they remove a recommendation on any site, their profile gets smarter
- Amazon-like benefits: one place for their wishlisted items; 1-click checkout on all Passo-enabled sites; all their orders, invoices, ability to track shipments and do returns from their Passo profile; One profile to sign into retailers with so you never fill out another custom form again from signup to shipping.
- Share your profile with friends and family so that they can see sites with your eyes and get you gifts you want to keep that fit your style and size.
Business model:
Enterprise customers like JCrew pay us between $15k-$50k per month on 18 month contracts based on API calls to our system. At a later stage we will include percentage of lift and other data-based revenue models.
Link to Investor Deck: https://knightgames.docsend.com/view/7ffe3tw
How it works: https://knightgames.docsend.com/view/9rkmmgd
Investor FAQ: https://docs.google.com/a/passoprivacy.com/document/d/1ict3GMmsSewzS3sxSIlpKEOV8BlFxhR1JkrlECVPMcY/edit?usp=sharing
2. Team:
Our team is stronger than ever:
- Our technology team has worked together for 15 years at Priceline.com (architect, the VP Engineering, their lead back-end engineer). They remained there heading up Priceline’s technology efforts, leading to the $98Bn market cap company it is today.
- Divakar Rayapaty, Passo’s CTO and original & principal engineer that architected and managed Priceline.com, has recruited his dream team, including his right hand man from Priceline.com, Mike Rizzo. With these hires, Passo has an extremely strong dev team that can compete with any large company. These hires were instrumental in building Priceline.com and have several years experience working with Divakar.
- Divakar Rayapaty, CTO — Formerly Priceline.com (14 years), investor and founder at FlowHealth and Makers Brand
- Mike Rizzo, VP of Engineering — Formerly VP of Engineering at Priceline.com (15 years)
- Abhishek Yeramalla, Senior Software Engineer — Formerly Priceline.com (9 years), Advalent
- Vlad Ustinov, Dev Ops Engineer — Formerly FlowHealth, Makers Brand
- Alexey Kulyukin, Backend Engineer — Formerly FlowHealth, Makers Brand
- Mike DelGuidice, UX/UI Design — Formerly Match Marketing Group
- Michael Herman, Sales — Global President of Sales at Ellie Tahari (Joining after seed round, has +50 clients identified where he knows the key decision maker)
3. Product update:
- Passo’s ingestion engine can process over 25MM SKUs in realtime on production-grade hardware. Ingestion means: break into our proprietary key identifiers which work across every retailer, and make applicable to a shopper profile based on their historical purchases at all retailers connected to Passo
- Results are filterable and searchable in realtime
- Our system is elastic and serverless
- Our AI product recommendation engine is built out and waiting to be trained with live customer data
- Magento integration is built
- We’ve been approved for a Demandware/ CommerceCloud Premiere Partnership (next thing we will build is that integration)
- We’re supplementing the historical purchase data with a user onboarding “game” similar to Stitchfix. Design phase ends on Sunday, to be delivered for coding. The “shopper IQ” game will now happen within the retailer site
- New static site being launched this week
- I’ve attached a 6 month product roadmap
4. ICO:
It’s become obvious that Passo profiles are a great application of the blockchain. Almost every investor is asking us about it.
We are busy investigating to create our whitepaper and ICO. An interesting case study is Civic, run by my longtime friend Vinny Lingham (also Passo advisor), which recently raised $33MM in their ICO and has some parallels to Passo. Please feel free to contact me and discuss. We would love your feedback, advice or collaboration.
We are speaking with the founders of some of the best known crypto currencies about this ICO and our product, which they are excited about as it has immediate real-world application and can open crypto and blockchain to the major retailers without the pain of wrapping their heads around how to apply it.
No decisions made yet — we’re at the data gathering stage and speaking to as many folks as we know to get a read on the path forward.
5. Impulse Ventures:
We’re raising a round (before an ICO):
Lead investor: Impulse Ventures (Terms sheet attached)
Raising: $2.2MM at $8MM pre-money valuation
Hard Committed: $350k
Soft Committed: $750k
Stage: Pre-launch, committed clients, MVP validated
Closing Date: 15 August 2017
Shopper profiles created: 700,000 users
Thank you for taking the time to read this update and staying interested in a really tough problem our team is working on solving.
I’m excited to lead our team to our next step in bringing consumers closer to their data and for both them and retailers to realize unprecedented value from the experience.
Looking forward to reconnecting.
Eran
Open Kimono: The art of the subject [line]
Recently I started sharing documentation that many folks would consider “confidential” (such as updates to interested investors at my startup Passo).
I call BS on that sense of guardedness that some think I should have surrounding this info.
Honestly, if someone really wanted to know something regarding an investor update, I would send it over… or one of your investor homies would share it with you.
It’s such a critical challenge to get all aspects of these updates right, so my thought is: why not be OPEN? Share to improve via wisdom.
Today I’m going to think about the art of getting the investor email subject line right, so as to lead to more opens and responses.
This is the subject line of the email I sent (72% open rate):
[Passo] New CEO, update, thoughts on ICO, and Impulse Ventures terms sheet
Dissecting this subject line, here’s how I think about it:
The use of [bracket]
Firstly, I put the name of the company that I am reaching out to discuss with the reader, right in the front of the email subject line. I also place it in square brackets. This seem to have pros and a con:
Pros: Easy to notice by the reader; stands out compared to other emails in one’s inbox, makan Mg it easy to find and differentiated from other senders.
Con: It seems that if you send enough emails in this format, they could be flagged as spam by bots. (any thoughts?)
Shock value and the power of enigma
Whilst it would be effective to put something like: revenue spike/ new clients/ seed round etc… starting with “New CEO” creates a sense of shock value, curiosity at what is the heart of the company. It’s a great focus to show a very substantial event and one that is personally relatable if the readers know you well (or if you pitched them before).
A shift in founder structure or a critical CxO role, especially at an early-stage company will create curiosity, raise eyebrows or rally cheers of support.
All of these immediately carve out mindshare and empower the conversation with enigma. That’s a powerful ally in establishing interest and narrative.
Introduction of a new concept and speaking to hot market topics
We never mentioned the concept of an ICO before in any former marketing, pitch nor narrative. ICOs are such a hot topic right now and also present a challenge to traditional funding sources like VCs.
What was my goal? To see who is actually interested in Passo as a business concept, and to engage interested investors in revealing their position with regards to cryto-funding.
I stayed non-committal in order to enlist feedback, advice and potentially support. (I was also genuinely assessing the right path and the feedback I was seeking would prove invaluable.)
Very quickly, feedback rolled in:
- Intrigued, let’s discuss
- Cannot support your path, but want to stay in touch
- How can we help?
- Have you considered the recent SEC ruling?
- When is the ICO?
- I think you need to do a seed round first
All of these responses helped me to categorize my distribution list into separate excel sheets so that I could follow up with in the manner that responders requested.
Money doesn’t like to be alone or first
Mentioning the terms sheet we had secured, the backer and the outline of the terms let investors know the following:
- There was a real round in place
- It was an equity-based/ priced round
- A researchable institutional VC had done due diligence on Passo
- There was a lead in the round and first money committed
The lead is always the hardest to close. Once you have a lead, as long as the investor community respects the lead and their terms, it should be much easier to close funding.
Also, the lead normaworks hard t0 close the round in tandem with you. They become your best source of vetting and and powerful ally to reach out into their own network and pull out their friends to follow.
In Summary
This subject line had a great open and response rate. Every couple of days a straggler reaches out and responds with well wishes or request for more information.
Things to consider in your subject lines:
- Clear differentiation in format, without being too playful
- Clearly establish who it’s from and what it’s about
- Entice a sense of enquiry
- Position yourself contextually in a market topic
- Indicating clear progress and forward momentum
- Speaking to the reader’s FOMO and mandate (in this case not to lose out on vetted good dealflow)
- Establishing authority/ authentication from a name readers recognize
What are your thoughts and advice? Do you have any feedback to share on email subject lines that you found effective in capital raising? Share them below, and as always: thanks for reading and engaging.
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