MusicIP - The VC Process

For a long time, the VC blogging community has tapped danced around trying to give out useful information yet not give out too much that could impact a portfolio company.  We tend to talk in "this company" or "unnamed" person, etc.

While in Europe, I received a number of request and hopes about seeing the process unfold more real time, more live, and with a real company.  Tricky stuff given the confidential nature of the process and the fact that most of the VC world would not be particularly enamored with letting it all hang out, so to speak.

I spoke with Matthew Dunn, the CEO of MusicIP about this topic.  Matt and I worked at Microsoft together. We worked in two groups, both targeted at developers, so our help em learn desire is still pretty high.  We wondered if there was a way to show people how the process works while MusicIP was out raising some capital balancing the confidentiality issues with actually giving out live information.

So, starting with this post, I'm going to try to give you, the entrepreneur, some documents, a diary of happenings, advice, meeting highlights, etc, with the goal of giving as much insight to the process as possible.

First some disclaimers:

1. I'm already invested in the company. I'm the chair of the board. I love this stuff, totally bias, think it's the next billion dollar company, etc, etc.  Really.  Read everything I say about this (or any) portfolio company with a mondo grain of salt.
2. I will not engage in a debate about the company here.  See item one. I'm happy to talk about process, answer your questions as to why we said/did something, etc.  In fact, I reserve the right to delete comments that go into comparing MusicIP to anybody else's company. Seriously. This is an exercise for somebody raising capital, not a debate on the company.
3. See item one and two.
4. In most cases, I won't name names and might change a detail to avoid identification of somebody.

Okay, with that out of the way (go read item one and two again), let's move on.

One of the first things you want to do is get a VC enough information which will call the all important meeting, first call, etc.  The executive summary document is the product with which you attempt to get that first meeting/call.

I'm providing you with the MusicIP Executive Summary here with the following notes:

I've removed some secret sauce, taken out some of the financial numbers and deleted a couple of strategy paragraphs that would be meaningful information to a competitor. In all cases, I have highlighted the spot in yellow to show you where I deleted the information.

The good news for MusicIP is this document has been very well received and Matthew has booked a ton of meetings to talk about the company.

As you are putting your document together, you should try to hit these key points that, for me anyway, cause the next step to happen:

• What's the big picture? What are you trying to sell/solve/do?
• What are the highlights of the offering?
• What are the high level points of your market?
• What are some of the key milestones of your company's evolution?
• How much do you want and what's it for.

My email address is inside the document and I'm happy to answer questions and take a look at your document, giving you feedback if you ask for it.

I'll be posting some meeting results, slides, etc, as this process evolves.  I hope you find this useful and that is gives back a little to the start up community.

Comments

[Raj Bala]

Rick, I'm looking forward to this series of posts. Thanks for taking the time.

[Peter Guy]

Rick:

Yes, thanks for this insight. I'm curious, though, as to why the exec summary makes not mention of competition whatsoever...

Peter

[Rick Segal]

Peter,

Good question/observation. In the executive summary, we were looking for the meeting and checking interest. The presentation deck which we can sometimes send along does have a slide about it.

Typically, tho, the executive summary gives out enough information to get the investor/vc to ask questions or take the meeting. You can certainly list competition in a section, absolutely, we just chose, in this case, not to do it.

[Lakshan]

good