His early experience at Solidcore, which was later acquired by McAfee, set the stage for his management approach. He learned how a large company determines their ideal customer profile and launches new products. So, when he took on a leadership role at Demisto, he was clear about the importance of defining a product and matching it with customer needs to convert leads. 

However, Bhargava says he encountered a challenge familiar to startups – how to align the product management and marketing/sales teams. “In many companies, product teams are building a product that is for one type of audience, while the sales and marketing messages aim at a completely different one. The teams usually meet once a week, or once in two weeks, and there is little alignment,” Bhargava says. 

“The positive with transparency is that even if people do not agree with the decision, they understand the reasoning behind it.” - @rishi_bhargava
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Creating a culture of collaboration

To avoid this, Bhargava took a fresh approach at Demisto. As the marketing leader, he took part in every product decision and acted as a ‘bridge’ between the two teams. “I was able to understand the direction of the product and implement the right things on the go-to-market side. I could also convey customer feedback to the product team, to make quick, accurate product decisions,” he explains. 

The teams, not just their managers, were also encouraged to communicate openly. “ If anyone had a question about the marketing theme or the direction of the product, they could just ask. So, it was a very, very collaborative culture that way,” he says. 

This led to what Bhargava calls a culture of course-correcting, an ongoing process of reassessment that prevented the need for any major company pivots. “We had the sales guys write a field report back to the product teams on a regular basis, saying what the customer liked and how the product failed. We never curbed any opinions. We welcomed them and even shut down some features based on that feedback.” 

“Scaling is about discipline without slowing down. Sometimes, when you put in too much structure, you slow down.” - @rishi_bhargava
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Confronting the challenges of scaling

Transparency came with its own challenges, especially as the company grew and moved from open discussion to practical decisions. Bhargava says that Demisto handled the problem by creating a culture of never looking backward. Everyone was free to share their opinion, but relevant leads carried the day. 

“We debated very vigorously; but at the same time, once we committed, there was no more looking back. The positive with transparency is that even if people do not agree with the decision, they understand the reasoning behind it,” he explains. 

Scaling required further planning. He explains: When you hire five new sales engineers, you need to make sure they’re doing the same thing. And if one of them isn’t, how can you bring them back to task?

“Scaling is about discipline without slowing down. Sometimes, when ou put in too much structure, you slow down. I think you need to strike the right balance between planning and still keeping the agility.”

“If two people have never done kayaking before, they usually go in circles because they’re not aligned. If you align them, they start to go in a straight line and at a fast pace.” - @rishi_bhargava
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Alignment: From kayaks to companies

Ultimately, Bhargava was able to lead his team to success by keeping them focused on serving customers. At every stage he would ask: What would the customer want? How do we engage with our customers? What value can we give to customers without trying to sell them anything? He shared those questions with his teams, and encouraged them to work on answers together. 

He likens his management philosophy to navigating a kayak with another person. “If two people have never done kayaking before, they usually go in circles because they’re not aligned. If you align them, they start to go in a straight line and at a fast pace.”

fnSummit, taking place from October 13-15, 2021, is an annual event where founders, investors and partners come together to explore the theme of growth. Located in a beautiful resort in California’s Carmel Valley, the event will offer participants a chance to network, share ideas and enjoy a variety of recreational and team-building activities. 

“In my experience, most startup founders that learn from their mistakes end up succeeding. It may not be a multi-billion-dollar success, but they end up building something of real value and in that sense succeeding,” he says. 

Breakstone presented a keynote speech at fnSummit 2021, in which he’ll detail seven lessons for founders. He’ll tell personal stories and offer advice on topics such as the importance of choosing the right co-founders, knowing market size, building your team and pushing for speed to market.

“As a founder, you’re selling the future. You're selling a vision.” - @MichaBreakstone
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Create perceived momentum

According to Breakstone, being the fastest at getting a product to market is critical, but that’s just the start. A company must also create the sense that they’re moving even quicker than they are, a concept he calls “perceived momentum.”

“As a founder, you’re selling the future. You’re selling a vision. Your company is getting a valuation of $50 million before you have earned a cent because people believe that you understand something about the future that they don’t yet, and that you can get them there,” he explains. Perceived momentum can be generated by hiring people or appointing board members who are stars in their field. “If you have 10 people on your development team and four are out of Google, you’re already looking bigger than you are,” he says. Breakstone also suggests that founders publish thought pieces that position themselves as leaders and that they invest in a compelling design language. 

“Another trick to build momentum is to space out your company announcements. If you have made five advancements quickly, announce them over a few weeks, so that you create the sense that you are continuously moving forward,” he suggests.

However, Breakstone cautions not to create a false sense of reality. Honesty and authenticity are key. “You don’t have to have all the answers. You just have to convey the confidence that you are moving quickly to find the right answers,” he says.

“You're selling a dream, so it better be a dream that is worthwhile. I think it's important to be motivated from a deep place. If it's only for money, it's going to be hard to maintain over time.” - @MichaBreakstone
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Believe in your mission

Creating a buzz only works if you believe in what you are creating. He explains: “You’re selling a dream, so it better be a dream that is worthwhile. I think it’s important to be motivated from a deep place. If it’s only for money, it’s going to be hard to maintain over time.”

Breakstone will share some of his own experiences with finding a sense of mission, detailing how the objectives of a company may change over time, but the mission and vision can be maintained, anchoring decisions in deeply considered company values.

”At the end of the day, getting employees, investors, and customers to follow you is so much easier if (a) you have a deep and compelling vision of the world, and (b) you actually believe in it.”

“You can scare people into working hard. You can try to ‘buy’ people into working hard, but one thing you can’t do is buy their hearts and souls.” - @MichaBreakstone
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Put people before product

Of all the lessons he presents, Breakstone is most passionate about the need to treat people – the team, clients and co-founders — with respect. Aside from it being the right thing to do, he also adds that he believes it is a predictor of success. 

“I’ve worked with over 200 companies in the last three years, and I can tell you that people who take care of others succeed more than those who don’t.” 

He cites a Google study that found that “psychological safety,” a state in which people feel comfortable being vulnerable and empowering others, was the number one predictor of a successful team. 

“You can scare people into working hard. You can try to ‘buy’ people into working hard, but one thing you can’t do is buy their hearts and souls. The only way to truly motivate them is by treating them well, treating them as partners in your journey.” 

Check out our video from the event and see if you qualify for membership to attend upcoming Founders Network events.

fnSummit, taking place from October 13-15, 2021, is an annual event where founders, investors and partners come together to explore the theme of growth. Located in a beautiful resort in California’s Carmel Valley, the event offer participants a chance to network, share ideas and enjoy a variety of recreational and team-building activities.

Your goals as an entrepreneur are not always clear. They may be centered on making a profit, which means a lot of decisions need to be made on prioritization. But your goals as an entrepreneur should also be centered on building a brand that can deviate from a script, and consider alternatives. 

“Real estate is a relationship business and at a time when most of our relationships exist through screens, it is more important than ever to have a tool that can enhance those interactions.” - @foundersnetwork
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Julie Leonhardt, co-founder and CEO of Vuse, believes that her understanding of the real estate industry, combined with her listening to the pain points of the agents with whom she speaks on a daily basis, has allowed her to create the perfect tool for the agents’ toolkit. Vuse is a mobile platform that enables real estate professionals to create and share captivating, pro-quality videos on the go. Her former life as the COO of Sotheby’s International Realty Affiliates, Inc. and the SVP of Affiliate Services and Head of Operations, EMERIA region, for Christie’s International Real Estate, and her partnership with award-winning filmmaker, Leanna Creel, creates the perfect team to build a product that the real estate market really needs right now.  

“Launching in March 2020 was definitely a risk,” Leonhardt explains. “However, once everyone realized that COVID was not going to be a minor blip on our year, my phone and email were blowing up with agents begging for Vuse. Vuse combines my real estate background with my co-founder, Leanna’s, amazing filmmaking acumen to create a product that is uniquely designed for agents. Real estate is a relationship business and at a time when most of our relationships exist through screens, it is more important than ever to have a tool that can enhance those interactions. ”

“Are you able to pivot where the industry is pushing you? That is so key to product nimbleness. You may not be able to find full market fit right away. Some companies may have to do a few degrees shift as the market changes so they…
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Vamshi Gunukula, COO of DirectShifts, didn’t have to search hard to find the opportunity in the global pandemic. His team found itself in the middle of the moment. DirectShifts is a tech-enabled staffing platform that matches clinicians with employers. As the need for qualified medical professionals grew, his team pivoted toward helping hospitals and clinicians source from a variety of locations. They also focused on sourcing more specialties.

“We diversified because we saw the market needed it,” Gunukula said. “We always create our product with a vision to serve certain aspects of the industry. But the industry will push you laterally. Are you able to pivot where the industry is pushing you? That is so key to product nimbleness. You may not be able to find full market fit right away. Some companies may have to do a few degrees shift as the market changes so they find their sweet spot.”

“This was an extension of my passion, but also very much trying to solve a problem. And as it turns out, it was a problem that basically every single traveler in the world has experienced or will experience some time in the future…
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Zephyr Seat is geared toward the air traveler who in this new normal seeks more private space, among other benefits. The Zephyr Seat would allow airlines to provide double-decker. lie-flat seating in a 2-4-2 configuration. CEO Jeffrey O’Neill, a frequent traveler and designer, came up with the idea after seeking a way to get some good sleep on a very long flight from at the economy price point.

“This was an extension of my passion, but also very much trying to solve a problem,” O’Neill shared with allplane.tv. “And as it turns out, it was a problem that basically every single traveler in the world has experienced or will experience some time in the future when they travel again.”

While O’Neill’s idea was born well before the pandemic in 2017, it arrives at the right time,  just travelers would appreciate isolation and social distancing. It’s poised to be a significant disrupter in the travel industry, should airlines adopt it. At this stage, the Zephyr Seat team is still hunting for the first taker. 

Hear more about how these founders are moving their products forward by joining our Product Panel on August 24. Sign up to join us in this FREE event and find out if you qualify for full membership and get insights on:

• How to pivot where the industry is pushing you with product nimbleness
• Why you should sell your meaning, not just your product
• How to extend passion to propose a solution
• Attract the attention of customers through experiences 
• It’s not about products, it’s about unmet needs

Nathan understands the fundraising journey all too well. He founded Foundersuite, a venture-backed company that makes the leading “funding stack” which has helped users raise over $1.2 billion in seed and venture capital. Before starting Foundersuite, Nathan spent ten years working with over 150 startups as an interim CFO, business developer and advisor. Nathan has an MBA in Entrepreneurship, a BBC in finance, and is a Chartered Financial Analyst (CFA). 

Funding Hack #1: How Not to Raise Capital

The most  common mistake that startups make is to just throw a wide net out there.

They say something like, “hey, will you introduce me to investors?” It’s just too broad of a question. If you don’t know what you want, who else is going to know? 

Instead, you have to: 

Funding Hack #2: Treat Fundraising Like a Sales Process

Just like a sales process works on a funnel formula of:

1. Lead generation
2. Qualify
3. Engage and
4. Close

You can apply this process to fundraising as well:

1. Building a large list
2. Screening, filtering and qualifying
3. Finding the right person at the right fund
4. Initiating the warm introduction
5. Move on to pitch meetings, term sheet discussion and due diligence (a deep dive into your business)

Although some parts are different, the overall process is similar. Let’s take a closer look.

Build the Funnel

Getting started, the first thing you’ll want to do is build your list. That means 150+ names, at a minimum.

It can take 100 pitches to get 3-5 commitments.

You can use sources like AngelList or FounderSuite and simply search by industry and location. Alternatively, you can also use Crunchbase. Make a list of similar (but not competitive) companies and see who funded them at the relevant stage. 

These are by no means the only places to look. Sites like PEHub, InsideVenture, VenturePulse and StrictlyVC are all newsletters. Other options are conference speakers, Quora, Techcrunch and Medium. You can look at Pitchbook or CB Insights (which is paid) as well. 

Filter and Qualify Leads

Now, just like with any good sales process, it’s time to filter and qualify your leads. This means removing them if:

• They’ve invested in your competitors
• They don’t have funds
• They have no recent deals
• They’re in the wrong sector or stage focus
• They’re in the wrong geographic location
• They have a poor reputation

You’ll want to filter down to around 100-150 to directly target. By cutting back now, you’ll get better results later.

Funding Hack #3: Map Contacts with LinkedIn

Next, you’re going to:

Create the “best possible introduction path” to each investor.

The best person to ask is someone who has made them money in the past, or someone they’ve invested with in the past. That could be another angel or VC. 

The third best is someone they have invested in, like a portfolio or a startup. Beyond that, there are professional connectors as well as people that they might have met at a conference. If you have no mutual connections in common, go back to to other portfolios or startups they’ve invested in, and start a cold email conversation. 

Funding Hack #4: Get Organized with a CRM

You can use something as simple as Google Docs or as robust as an actual CRM but either way, you have to refine and organize all of these tasks. You’re pitching 200 different investors. There are a couple of follow-up actions that have to happen directly afterwards. Getting momentum going is job number one.

Make Sure Your Pitch is Amazing

You don’t get a redo with investors. Get your pitch honed and get honest feedback.

If you have a financial model, show how you’re going to spend that money so that the investor feels confident that you know your operating plan. Otherwise, having a one-pager or demo can be helpful.

Funding Hack #5: Start the Conversation

As you’re mapping out your journey, you may find that, in essence, all roads lead to one or two “power connectors”. This is where you can start your conversation by letting this person know where you are in your funding stage, and if they know certain people well enough to make an introduction. From there, you can simply list some of the most promising names.

For every person that your “power connector” says that they know, you can then make an introduction request email. Keep it short, light and a tease — because you want them to call or meet with you. This kind of email is very easy to forward along so that it gets into the hands of the right person. 

After that, it’s time to hustle! 

The key goal is to get momentum or FOMO going. You want investors to feel lucky to be part of your deal.

• The best way to do this is to have lots of meetings. Investors are going to ask how your round is going, and you want to be able to say something like “good! I just started fundraising, I’ve got 12 this week and 14 next week, and we’re aiming to close by March 31st.”
• Split test your pitch. Continue to refine and improve it. Write down every question the investor asks. The pitch should stay short, but the appendix can get longer and longer.
• You can leverage VCs off each other. Just signaling that others are interested really makes them sit up and pay attention. 

What if You Don’t Have a Lead Investor?

If you don’t have an investor to lead the round, what should you do? Keep hustling. Keep adding investors to the funnel. Once you get around two-thirds of them committed, you can start to dictate terms, even if you don’t have a lead. 

Use the “conditional commit” approach. Tell them, “give me an amount that you’re willing to commit and tell me any conditions.” Don’t forget that shorter timeframes ignite that “FOMO”- the Fear of Missing Out. 

Go For The Close

Ask for their interest level, ask for their next steps, and make them chase you for a bit. You should expect 3-6 meetings before the term sheet. Follow up frequently. Finally, don’t let up until the money is in the bank.

Founders Network regularly provides shortcuts and insights on all founder challenges, including fundraising.  To request a nomination, click here.