TSP045 | Annette Lavoie – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John:

Hi and welcome to The Successful Pitch podcast. Today’s guest is Annette Lavoie. Annette has a great story of starting a medical device company, working with Judy Robinett to get in the right room so she could get the right investor to invest in something that required millions of dollars before it got to market, and her exit strategy was so successful that it actually worked that she got her company bought before it even got to market and was able to make millions from doing it.

She shares the insights that she learned on the importance of a team working together, not only being experienced, but the ability to work together is really what investors are looking for. She talks about the crazy confidence that an entrepreneur needs to have and really understanding, are you investable? What are the kinds of things that investors look for that are basic things that you have to know about your numbers before you go into a pitch meeting? Finally, she talks about all the ways that people can value their company so that you get the maximum investment and maximize your potential to get funded. Enjoy the episode.

Are you a founder struggling with your investor pitch? Do you need warm introductions to the right investors to get your startup funded? Do you need a funding roadmap to get you there fast? All of this and more can be found in Crack The Funding Code. Judy Robinett, bestselling author of How to be a Power Connector, and on the board of Illuminate Ventures invite you to our free Crack the Funding Code webinar. Simply go to JudyRobinett.com and click on the webinar tab to see how to tap into our network of investors around the world. There’s a link in the show notes as well. You’re only one click away from getting funded fast!

Hi and welcome to The Successful Pitch podcast. Today’s guest is Annette Lavoie. Annette has an incredible story about being a medical device entrepreneur, and she now mentors startup companies. At her first startup, Annette was responsible for the funding, device development, and ultimately the acquisition of the Daisyclip contraceptive device by Hologic. Now she applies her experience to develop business, financing, and product strategy with startup companies in the critical early funding stages. Annette, welcome to the show.

Annette:

Thank you, John. Thank you for inviting me.

John:

Sure. I want to find out about how you’re helping entrepreneurs with their early round of funding, but before we get into that, I always like to know what someone’s background is. Obviously you have 2 patents and you have a degree, a PhD, in neuroscience. From an early age, it seems like you’ve been very interested in that area.

Annette:

I actually was interested in academics from an early age. I was surprised to find out that I had alternative interests in the entrepreneurship. I was quite happy doing my academic research at the University of Utah until I was exposed to a series of entrepreneurs who looked like they were having a lot more fun than I was and having a bigger impact in the world.

John:

Ah, yes, impact and fun. Those are 2 attractive things, aren’t they?

Annette:

Makes the world go round.

John:

It does. Tell us about how you made that first leap, because so many people sometimes… Some of our listeners still haven’t made that leap but they really want to, or they’re a little nervous. What was your first dipping your toe in the water from leaving your comfortable job in research to go become an entrepreneur?

Annette:

It was different. My transition from academics to the startup world coincided with my transition from being a wife to being a mother. The opportunity that I saw was to fully explore both aspects of my life. I was able to start a company around a medical device product that I was passionate about, and had some preliminary funding and some crazy confidence that I could transfer my ability to learn in the academic environment to my ability to learn about business. It was not something that I … It’s probably not something

I prepared for appropriately, but if I had prepared for it and known all that was ahead, I probably wouldn’t have had the courage to leave.

John:

So helpful. I love how you said crazy confidence. I love that. What does crazy confidence look like? I know what confidence looks like, but crazy confidence is you’re going to do this no matter what?

Annette:

Yes.

John:

Mm-hmm (affirmative).

Annette:

Unfounded confidence I think might also be appropriate. I was confident in my abilities, and so I thought that I could apply them in any area that I chose.

John:

That’s right. The skills are transferable. Tell us about when you worked at this company that you were involved with, that you were the founder and CEO for 8 years, and tell us that whole journey, if you would, about starting it, getting funding, and then selling it in 2012. What a great story.

Annette:

It’s a saga.

John:

Yes.

Annette:

Like any startup, it has … It’s a roller coaster throughout the entire process. My enthusiasm for the device was because of the simplicity. I was excited about the ability to take something that was a really simple idea, and that was to close off the Fallopian tube, and develop that. As a non-engineer, that was exciting for me to be able to have that ability to develop something that was simple but had a huge opportunity and would have a huge impact in the world. The device development piece of it was actually quite simple. The business model piece was the bigger challenge. Like I said, I came from science. I had the confidence that I knew how to develop this.

What I didn’t realize was how important the business model was to getting the funding. I really thought that when I had a device that was so obviously needed and obviously effective that the VCs would take one look at it and roll up their sleeves and say, “How can we help? We’ll provide the business acumen. You provide the science. Together we’re going to win and take this to market.” That was obviously completely naïve. I had no idea what I was up against and what the expectations were. Taking this product, this … really a science project that I had on my desk, and figuring out how I was going to learn what I needed to learn and prove what I needed to prove in terms of the business viability, was a lot bigger hurdle than I anticipated.

It’s a product that requires FDA approval, and not only that but requires a large number of clinical trials, which makes it expensive. When you’re raising an early round of funding and it’s apparent from the very beginning that you’ve got $10-30 million ahead of you before you can get this to market, raising the first million is incredibly difficult. They see that the path and the dilution that’s going to be upstream is daunting.

John:

How did you do it?

Annette:

Sorry?

John:

How did you do that? How did you convince someone like, “I need a million dollars but I’m eventually going to need 10, before I can even get this to market to prove that it’s going to sell”?

Annette:

Right. That was being in the right room.

John:

Ah.

Annette:

I did many, many, many, too many VC meetings. I went up and down Sand Hill Road. I talked to a lot of groups that were encouraging and enthusiastic. They liked what I was doing. They said, “We like your market. Come back to us for your Series B.” I didn’t realize that that was code for good luck, because I … I suppose they didn’t want to say no and I didn’t realize that. I was encouraged. All I had to do was get the Series A and my Series B is covered, because all of these groups are so excited about it. All the resources that I spent, all the time that I spent flying back and forth, and putting time into a business model that really wasn’t viable was discouraging and took a long time. I was finally introduced to Judy Robinett, and she understood that I had a great product, I had a compelling story, but I was in the wrong room. She was an incredible mentor. She joined my board and spent a lot with me teaching the business side and the business speak and helping me understand what was going on below the surface that I was not privy to and unaware of.

She took me to the right groups, and it wasn’t very long before I was talking to the right investor that was willing to make the right sized investment in this really early stage. It was a good fit in terms of market segment. We launched with that first early boutique venture capital round and got to the next point in terms of credibility for the product and the market, the business strategy, and we were acquired before we got to do any of the clinical testing from a large company that is … It was a great fit for them, so it added to their platform of women’s health care technologies.

John:

What a great story. How wonderful for the early investors that you got bought even before you got to market. That’s quite an exit strategy there.

Annette:

It is. It’s always a toss-up because when you’re talking to your board of directors and you’ve got a strategy, if you can stay in longer and you can take the product farther down the road, it has a greater value. If you can do that without dilution, then that’s a win, but there’s that trade-off about, how far can I take it and what is the return on the investment? The more money I put in, the more it’s worth, but are the ratios beneficial to hold on to it longer or to get an early exit? In this case, for a lot of reasons, we had political, a lot of political turmoil in the women’s health and contraception arena. It was when Planned Parenthood was on the chopping block and not funded. They were obviously a strategic that were talking to and interested in working with because the product we were developing was ideal for low resource environments. It was a good fit for Planned Parenthood but they were politically in survival mode. There’s a lot of things that go into your investability that have nothing to do with you or your product.

John:

Yes. There’s things outside of your control obviously and things change. Let’s talk about what you have learned from that, and how you’re able to consult and help other people with this now, which is this whole concept that you said of understanding your investability, are you investable, and what the key things that are needed. You mentioned earlier business model and structure and an exit strategy. Can you talk about some of the key things that founders should really know, the language they need to know, and what strategies they need to have before they even meet with VCs or angels?

Annette:

Absolutely. When you’re going out for your first round of funding, that’s the key is understanding your investability. Your investability is based on your opportunity, not just your product. It’s the idea that understanding that the investor’s putting in money, going to stay with you for a period of time, and then needs an exit, needs to get that money back. Otherwise, there’s no reason to get involved if there’s not a way to get out. What I find with some of the greatest technologists that I’m looking at and working with, they have a widget that they are so excited about. It’s the coolest thing ever invented, and it’s going to change gaming, or it’s going to change medical device. It’s going to change the world in some way or another. What they don’t understand is that they’re the only one right now that’s in love with that baby. They show up to a pitch. I’m sure you’ve seen this with really new, enthusiastic entrepreneurs. They have 57 slides and 54 of them are pictures of their baby and all the things their baby can do. That’s not relevant.

What’s really, I find, investors struggle with the most is separating the baby from the opportunity.

John:

I love that. We’re going to tweet that out. Separate your baby from the opportunity. Great.

Annette:

If you can take the idea of your widget, whatever it is that you’ve just invented, and summarize it, you need to summarize it in 1 or 2 slides. The rest of your slides need to be talking about the opportunity, because that’s what they’re excited about. That’s what the investor cares about. The product, you can insert widget, you can insert the next pitch device they’re going to put in there, and that’s not going to matter to them as much as, do I want to work with this team and what am I going to make from this opportunity? When you’re again talking with a technologist in particular, the way that your product works, the specs, all of the things about it, are less relevant than, how can I sell it? How am I going to get this into the market? How much are people going to pay? Are they going to buy it? How do I know they’re going to buy it? All of those aspects that have to do with the business model itself. How am I going to generate revenues? Then how am I going to use those revenues to generate or churn for the investor? Does that look like, is it an IPO, which is really … It sounds like it happens a lot in the media, but it really is a rare occurrence for your IPO to be your exit. Is it going to be an acquisition? In the medical device space that I’ve lived in, a strategic acquisition for an early medical device technology is much more common, and that’s something that the investors can anticipate within a certain period of time based on the milestones.

John:

If I’m hearing you correctly, Annette, it’s really important when you’re putting your pitch together to investors, that you not only have an exit strategy of, “Oh, someone’s going to buy us,” but do some homework and come up with, I don’t know, 3 to 5 potential people that could buy you down the road, because you’ve done the research to know this would fit into their platform and how it would help their company.

Annette:

Absolutely. It’s like selling a house. You do comps when you’re selling your house. It’s the same thing. You would look at other companies in this space, in the similar space to you that have been acquired, who they’ve been acquired by, what their phase was at acquisition, and how much they were acquired for, so that you can compare. If you plot that out, you could see where you compare to these other technologies and anticipate who might be interested and how much they might be willing to pay.

John:

I love that.

Annette:

That’s going to be really key to having the investor interested, having them comfortable with the credibility you bring to the table, that you know what you’re talking about. It’ll tie directly into your valuation.

John:

Great. Oh, there’s 2 things you brought up I want to talk about. One is the investor’s question in their head is, do I want to work with this team? Then we definitely want to dive right into what you just said about selling the investor. Founders have questions about, how do I value my company? Do I ask for 20% for a million dollars or 30 or 10 or 5? Let’s dive first into, do I want to work with this team? What do you think people can do to be perceived as coachable and likable when they’re talking to potential investors so that they do want to work with them?

Annette:

That’s a great question, because at the end of the day, the team is much more important than the product. I’ve heard over and over again from different investors in different segments, angel investors, VCs, that they would rather invest in an A team and a C opportunity, I’m sorry, an A team and a C product, than an A product with a C team.

John:

That’s great.

Annette:

The execution of that, taking that product to market, is key to the team. What we found is that it’s not just the experience of the team, because you can have very experienced entrepreneurs that have taken products to market. More often, there are … The team revolves around brand new entrepreneurs, but even if you have a fully experienced, serial entrepreneurial team, if they haven’t worked together, they’re going to have challenges. Those challenges can be … They can be fatal. It’s important to understand the coachability, because if you’re looking at that aspect of a team, it’s how coachable are they from the investor’s perspective. The investor wants to get involved because they know the space.

Typically it’s an industry sector or it’s a product type that they have worked with before, and they feel like they can add expertise. They can add more than just capital to create value in this company. That’s a good rule of thumb. If that’s the case, then they are going to be involved with the running of the company and the execution of the product to some degree. Now most of them won’t be at the office every day, but they want to be there. They want to be a valued resource, and they want to know that you can have a communication, open lines of communication, transparency, that they trust you, that they can work with you, and if there’s a problem, that they can roll up their sleeves and show up at the office, and you can work together to overcome whatever hurdle’s in the way. There are always hurdles in startup companies.

John:

Of course. I want to just summarize what you said for the listeners. To me, the ideal investor is someone who has capital but also expertise in your field. The ideal founder has a strong team that not only ideally has experience, but also has a track record of working well together that shows they can overcome problems.

Annette:

I think that’s exactly right. I think that I would qualify this as particularly true when you’re looking at early stage and angel investment. Sometimes when you get into the larger venture capital investments, your companies get larger. It’s easier to overcome some of the aspects of team because it’s possible to replace your team. When you’re looking at these early stage, that’s absolutely true that you’re going to be working together, and that collaborative effort is going to go a long way in making the success of this company.

John:

Let’s dive into your expertise around valuation. When it is pre-revenue in a lot of cases, and they’ve made up some numbers that they think they can make a product for X and sell it for Y, and they anticipate with the funding they’ll be having marketing, how do you recommend people decide what’s a reasonable percentage to ask for in early stage?

Annette:

That’s a really great question. What I wanted to clarify right off the bat was I’m not sure I’d call anyone an expert in …

John:

Fair enough.

Annette:

… pre-revenue valuation, because it really is more of an art. It really is it’s worth what they’ll pay for it. Some of that, there are a lot of algorithms and estimations that can be made around a revenue company, but in a pre-revenue company, there are indications that tie into valuation. It’s more of an art. What I like to start with as a rule of thumb is to know what I need to raise to make the first real value inflection point. What’s that first milestone that’s going to increase the valuation of my company, in just general terms, increase that valuation to a certain extent? If I know what it’s going to take to get there in terms of time and money, that should be my first raise. If you’re going to anticipate that I need $5 million upfront to get this to market, then the valuation that you’re going to be able to get on something that’s that early on is going to be so dilutive that that money is harmful rather than helpful. Does that make sense?

John:

It does.

Annette:

If I find out what’s the smallest increment of capital that I can make or that I can take, I should say, that’ll help me make that first value inflection point, and then I use that as my marker, put a contingency in there because something always happens, but if, say, that first … If it’s $250,000 that I need to get to the point where I have a prototype that I can prove it works, it’s a great milestone. If I can prove my prototype with $250,000, then what I want to raise should be about a third of the company. Ideally what you would say is the pre-money value on that company is $500,000 so that the post-money value is $750k and the incoming money is worth 33% of the company. Those are good targets to hit.

John:

That’s so helpful, Annette. I can’t tell you how clear and specific that is. I’ve never heard anybody say it quite like that. It’s really great information. Thank you so much. That’s going to be a huge takeaway for our listeners.

Annette:

Good. To me, it works. It’s practical. It allows for a win-win situation. The investor, I think there’s a stereotype or a misconception that the investor always wants the smallest valuation they can get, a largest piece of the puzzle, or a largest piece of the pie, excuse me. At the end of the day, they want that investor … The investor wants that entrepreneur to be motivated. If they don’t have much equity in it, they’re not going to be motivated enough to take the risks and make the sacrifices it’s going to take to take that company all the way.

John:

That’s so great. This whole concept of knowing your numbers, I’d love for you to speak to the importance of that. Once you’ve got the coachability and you’re someone that people want to work with, and you’ve got the experience and the camaraderie and the collaboration coming across, and you’ve got the good product, you can really stumble, and people will lose faith in your ability to run the company, if you don’t know your numbers, right?

Annette:

Absolutely. I’ve seen more than once where you’re talking to an entrepreneur, and they punt the numbers to the CFO. If the CFO isn’t in the room, that’s an excuse for them to not know the numbers or come back with them at a later date. Now I would always advocate to be upfront, if you don’t know the answer, to admit that. The worst thing you could do is make it up, because then invariably you lose long-term credibility with that investor. They want to know, and they’re going to find a lot out about you and your integrity in that short pitch. If you don’t know the numbers, and you are going to make them up in order to create an appearance of success or an appearance of credibility or an appearance of expertise, then they can anticipate that when they’re working with you, if they made an investment in your company, downstream something happens that’s not necessarily positive, that you would be expected at that point to put on a face and have the appearance of success and maybe cover up what’s not going well or what you don’t know. That’s always a bad combination for an investment. If you don’t know, be upfront.

John:

Be upfront. I love it.

Annette:

That said, you need to know the numbers in broad strokes. It doesn’t help anyone if you know it to the dollar amount. As you have these 5 year, they’re going to change. What I like to use as a rule of thumb for pitching and for numbers is keep in mind that the investor that you’re pitching now has to turn around and pitch to their partners. They have to take your pitch and explain to their partners, whether it’s a wife or a business partner, that they like this deal and this is why they want to invest in it. Your numbers need to make sense. What I like to, particularly in that first early pitch, is to be able to give them multipliers. Give them numbers that they can remember.

Start off with a metaphor if you can so that they can understand the framework for your technology. For example, I was working with a company called Latch. It was a great product, but I couldn’t understand exactly what the technology was designed to … what problem it was designed to solve. The entrepreneur said to me, he said, “It’s like Carfax for houses.” Suddenly I understood it. Everything from then on out fit into a framework that made perfect sense, and it shortcut that discussion. Then when I went back to my partners, I could say, “It’s Carfax for houses,” and we could summarize the pitch very simply. Then the opportunity is this. They need this for an investment. It’s going to take this long to hit this milestone. Sell to this company, and this is the exit. It’s something that they can remember and articulate very easily and not get confused.

John:

I love it. It’s such a great framework. We need this amount of money to hit this milestone and get this kind of return, and then the exit strategy is this. How do we get in? What happens in between, as you said, and then what’s the exit? Structuring it like a story, beginning, middle, and end, with a metaphor is a great line. Are there a short checklist that you recommend that founders have or CEOs at a minimum that you should know? How much does it cost to get a customer? What’s your markup? What your competitor is charging versus you? Is there any kind of .. like be sure you at least know these 5 things, because these are the kinds of questions that you’re going to get asked?

Annette:

I think it’s very industry-specific. For example, customer acquisition is not a conversation we have in medical devices. If you know your industry and you’re in software, that’s certainly something that comes up, so you should be aware of that. I would say in broad strokes the minimum numbers you need to know are how much money I need to meet my first value inflection point, how much money I need to take this product to market, what’s the total amount of investment that I anticipate, and what are the basic industry metrics in terms of the average selling price or the anticipated selling price for that product, what the overall market is for that, and then what the anticipated exit numbers would be, and so that you can look at a return on investment.

John:

My last question for you is, are there any suggestions you have for founders to make sure that they stay the founder? That, as they grow, that the VCs don’t want to replace them?

Annette:

That’s a great question, because it’s a concern I hear a lot. I know that at one point, and I’ve heard venture capital investors say that their job is to replace the founder as soon as possible. I don’t think that that’s necessarily across the board, but I have heard that. What I think is that we know that there are different skill sets that are required to grow a company from nothing to a prototype and a first product, and then growing to the first million is a skill set that is very unique to startup companies. Growing the company from the first million to scalability at 5 million or 10 million is another skill set, and then growing it beyond there is another skill set all together.

I understand the concern of entrepreneurs not to be replaced. What I’ve always found is that if you are a team player and you add value, then there’s no reason to replace you. You may be replaced in that position as CEO, but that’s often for the betterment of the whole company. If you are adding value, and you’re easy to work with, and you’re making contributions to the technology, then having your history and your expertise within the company stay within the company is a benefit to all. You may find yourself in a chief technical officer position or you may end up as VP of R&D as the business grows. Your role will change, but if you continue to add value and be a great team player, then I think that the concern that you’ll be booted out is less. That said, there could be performance clauses or protections that lawyers put in place when you bring in the capital, so that they’re not motivated to eliminate your large equity stake for other reasons if you can be replaced technically.

John:

Got it. Nice. Is there any book that you recommend founders read about life or business?

Annette:

Life or business? My startup companies, I typically recommend 3 books to start with. One is Dead on Arrival, because I think that has some great vision into some partnership issues that enthusiastic friends and entrepreneurs are often not aware of. I think it’s a really short book, but it gives you some ways to anticipate potential problems down the road legally which may not be what you’re anticipating or good at. That’s Dead on Arrival. Pitch Anything is a great book.

John:

Mm-hmm (affirmative). Yes.

Annette:

Even though it is focused on venture capital and some of the power positions and the power struggles that he talks about are not necessarily as relevant to angel investing, I still think that there’s great information in there about the emotional aspect of pitching. Then of course How to Be a Power Connector is critical to understanding how to meet the right investors and be in the right room so that you’re not wasting time and resources pitching to someone that is never going to be a viable investor for you.

John: Fantastic.

Yes. That’s Judy Robinett’s book. You’re working with her on her new program, Crack the Funding Code, right?

Annette:

I am. It’s very exciting to see the mentoring that I received put into play in a webinar and a format that can be shared across the board. It changed my life to be able to work with her and to get in the right room and really see the product that I believed in go where it needed to go. It’s great that she’s able to share that across the board.

John:

Yes. It’s a fantastic program. I highly recommend it, because I’m going to be working with her on that as well. It’s exciting that I get to work with both of you. Annette, how can people follow you on social media? What is your Twitter and all that good stuff?

Annette:

My website, annettelavoie.com, and my Twitter is Annette.Lavoie.US, or Annette.Lavoie.US if you’re French Canadian.

John:

Lavoie. I love it. All right. Thank you so much. It’s been great having you on the show., You’ve given us so much valuable information from the importance of how to structure your valuation to the importance of being coachable and the team and that crazy confidence that you had, and getting in the right room of course is paramount to being successful and what investors are looking for. I can’t thank you enough, that it’s really all about the opportunity, not just your product.

Annette:

Thank you very much for having me. I enjoyed speaking with you.

John:

Great. Thanks for listening to The Successful Pitch podcast. If you like the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out. People say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest, but when it comes time to write the check, they don’t do it. How do you get people to say yes and then follow through? Visualize yourself on the left side of a river bank, and you have to cross the river. On the other side of the river is where the funding happens.

First, you make up your idea. Then you make it real. Then you make it reoccur. Once you start dipping your toe into the water to get to funding, that’s where I can help. I get you across that river faster than you would on your own with a lot less frustration than you will get when you hear a bunch of nos and you don’t know why. If you want some help getting funded faster with less frustration, go to my free funding webinar, sellingsecretsforfunding.com/webinar. Sign up and get in-depth information on how you can get funded fast. Thanks.

TSP044 | Denise Brosseau – Transcription

Posted by John Livesay in Uncategorized | 0 comments

John :

Welcome to the Successful Pitch podcast. Today’s guest is Denise Brosseau. She wrote a book, Ready to be a Thought Leader? She certainly is that. She describes the difference between being a leader and being a thought leader. Denise was named the 2012 Champion of Change at the White House and then went on, in 2014, to be named one of the Top 100 women of influence in Silicon Valley. You can imagine I am happy to have her on the show today.

She has great insights on the importance of having a one-page plan that includes being visible, being credible, and increasing your reputation. She says the keys to being successful and selling yourself is having a vision that you can execute with the right relationships. If you don’t have all three, you need to get them. She says the importance of storytelling is that we see ourselves in the story. You need to use metaphors, and most importantly, she has great example of being vulnerable to be memorable. Enjoy the episode.

Are you a found struggling with your investor pitch? Do you need warm introductions to the right investors to get your startup funded? Do you need a funding roadmap to get you there fast? All of this and more can be found in Crack the Funding Code. Judy Robinett, bestselling author of How to be a Power Connector, and on the board of Illuminate Ventures, invite you to our free Crack the Funding Code webinar. Simply go to Judy Robinett, JUDYROBINETT.com and click on the webinar tab to see how to tap into our network of investors around the world. There’s a link in the show notes as well. You’re only one click away from getting funded fast.

Hi and welcome to the Successful Pitch Podcast. Today’s guest is Denise Rosseau who is the CEO of Thought Leadership Lab, she’s the author of Ready to be a Thought Leader, she was the 2012 Champion of Change at the White House, and in 2014 was named one of the Top 100 women of influence in Silicon Valley. Denise, welcome to the show.

Denise:

Happy to be here.

John :

You have so many great accomplishments and awards, but I always love to hear of what inspired you to become involved in Silicon Valley and entrepreneurships and helping other women get involved in this. Take us back to your first thoughts of, “You know what? I’m going to make a difference.”

Denise:

It’s always such a good thing to start back at that. What’s the why? What is it that drives us to keep going? There is a lot of that thinking that I try to do with people who come to me who think about this idea of taking the stage, is to start with that why. For me, it really began, actually, in business school. I took this wonderful course on creativity in business. The leader of that course was really a guru in that arena and he had us do a lot of very deep thinking about our vision for our future and what we’ve stood for in the world. I came away from a several month exercise with a mission statement. That mission statement was really around more women leaders at the top of every organization.

It came from a deep place that … I look around me and I say, “The world is not really working the way I want it to. If we had more women’s voices, more diverse voices at those tables, I believe that some of the issues that I really, deeply care about are going to come out differently.” My work for the last 20 years has been really around all the different ways I can help move that agenda forward.

John :

I love it. The research certainly backs you up that women CEO’s perform extremely well. I’m curious, was this creativity in business class at Wesley, or was it at our Stanford graduate?

Denise:

It was actually Stanford business school.

John :

Interesting. How nice that they have a class like that.

Denise:

I know! It was definitely my favorite course, along with the entrepreneurship course I actually had the chance to take with Jim Collins. You have some unique opportunities in your life that just coalesce around the future that unfolds for you. Those were two of them.

John :

Right. Anytime a guest, and there’s not many, you’re in a very select few, that have been involved in any way, shape, or form with the White House, I’m always curious to hear about that. Can you tell us about this Champion of Change award?

Denise:

Absolutely. You go along in your life and you work hard and you try to make a difference and it’s, occasionally, true that somebody reaches out from a place like the White House where it’s one of those astonishing moments. You get those emails that say, “You’ve been recognized as a Champion of Change.” You’re like, “Wow! Okay!” First, you look at the return address to make sure it’s real.

John :

Not a prank (laughter)?

Denise:

Let’s be honest, you don’t always believe it. For me, it was such a wonderful culmination of deep amount of work I’ve done in women’s entrepreneurship. I was actually nominated by Springboard, the group that I helped start years and years ago. I still serve on the national advisory council, and the Champion of Change award was really around people in the country, men and women, who had been doing work around encouraging entrepreneurship in a lot of different communities around the country.

They selected a group of us to come and be recognized for that work, and also to have a real tribe sharing. It was just such a wonderful event because, in addition to the recognition and the chance to hear of some great stories, which, of course, we all want to hear about how others did it, and be able to tell our own stories, also having these private rooms where everyone at the table is equally committed to the same cause, and to have a chance to talk.

It was co-led by this great group, Startup America, and their work around how can we get communities to coalesce around ecosystems to help everybody collaborate and cooperate to work more effectively. They were sharing what they learned, we were all sharing what worked in our communities, and we all came away more energized and empowered, and also educated on what was working, the best practice sharing that we all seek and we can’t often find. I thought it was a win-win for me and, of course, it’s lovely to put that on your resume. It’s fun to go to the White House and meet all these amazing people.

John :

I love what you said about the tribe sharing. That really is one of the keys to being a successful anything, whether you’re an entrepreneur, a founder, an investor, is finding your tribe and finding those people that you can learn from and that you can, hopefully, contribute something to. Don’t you agree?

Denise:

Absolutely. So much of the way that I’ve learned to think about this is how much more powerful we can be when we find our tribe. This came to roost for me. I’m running this non-profit years ago here in Silicon Valley called the Forum for Women Entrepreneurs. I was the founder of the organization with some other fabulous people, and we were really churning some great programs and great events and really getting women out there and doing great things, and then we started to grow to other offices and other cities. Then, one day in 1999, I get this phone call from the National Women’s Business Council. I’d never heard of them.

“What’s the National Women’s Business Council?” That was my invitation into this entire tribe of people like me who were working hard at the grassroots level to help women who were growing big business. Not a lifestyle business, but a scalable business that is technology, life sciences companies, media companies, who are really thinking big, raising venture capital. Once I realized I wasn’t the only one, it took everything to another level. I’m always encouraging people to think, “Where is your tribe? Can you amplify those other voices? Can you convene those people? Can you create much more rapid change by bringing those people to the table together?”

John :

That’s it, isn’t it? Rapid change when you’re not doing it alone. Not two years later, last year, you were recognized as one of the Top 100 women of influence by the SV Business Times. Is there one thing that they really pointed to and said, “That’s why we’re putting you in the top 100 for?”

Denise:

I think what I’m known for in Silicon Valley is the one who starts everything. The organization I started, what was called the Forum for Women Entrepreneurs, now called Watermark, is very well known here. I also started another group called Invent Your Future, which is also quite well known. Lots of conferences here in the valley. I started Springboard, which has impacted a lot of people. I’m the gal who starts great and conferences and events and tribes for women. I think it was the culmination of all of those things together that led to that award.

John :

Our listeners can certainly relate to that, because if you’ve got the entrepreneur’s spirit you’re inspired by starting new things and you have multiple things that you’ve started which have all been hugely impactful and successful. Tell the listeners who may not know about Springboard. How great it is.

Denise:

Sure. When we first began the journey to create Springboard, it was a time in the United States where there was not a very visible opportunity for women to come to the stage in front of a community of investors to pitch their big business ideas. At the time, there was really only one, VentureOne was the conference, and if you saw two women on the stage it was a really unique year. Mostly, what we realized at that time was that there just wasn’t this preparation that was necessary. Most women were doing big businesses for the first time and they were not serial entrepreneurs like many of their male colleagues.

Venture capital was, for the first time, even slightly available for women. Our thinking was, if we can create a venture conference that was for women that was a three to six month program prior to the event that was actually selecting the best entrepreneurs and then putting them through a boot camp, a series of mentorship opportunities, and a chance to really prep their business before they got on that stage, and then in addition, some introductions to the right people, the lawyers, the bankers, the accountants, the folks who can really help them shore up their business idea and get it ready for prime time, those women were really going to shine.

We started this here in Silicon Valley in January of 2000. Since then, we’ve hosted these programs, not only across the United States and multiple cities, but we’ve also gone internationally and hosted programs in Australia and Israel and down in South America. The work has no brought, I think, we’re close to 600 women entrepreneurs. Those numbers are astonishing. Businesses have raised $6.7 billion in capital in 15 years. We really have an amazing track record. What I’m even more proud of, because of course the numbers say a lot, there’s another piece to it and that is this tribe of 600 women who have now …

Many of them are serial entrepreneurs, they’re coming back to us for the second and the third business. They are supporting each other, they are serving on each other’s advisory boards, they’re nominating and recognized each other and helping each other to get to that finish line, and also supporting when things don’t work. That’s the thing that keeps on giving, is this alumni community that we created and continue to bring together every other year. I just love going and I try to MC those events every other year and getting to see what’s come as a result and seeing the power of these women now.

They’re in big companies, they’re entrepreneurs, they’re executives, consultants. The knowledge and information that they got and the connections that they got took their careers to a whole other level.

John :

How exciting. You’ve also written what is a big favorite to many, many people. A great book called Ready to be a Thought Leader. What I find so interesting about that is it’s not just ready to be a leader, but ready to be a thought leader. Can you give us your definition of the difference between the two?

Denise:

That’s such a great question because I do think it’s a journey from leader to thought leader. Leader is someone, obviously women, a single organization or entity, usually, who begins to make change, who begins to create followership around an idea of doing things newly, doing things better, shipping a better product, creating a new service, whatever it might be. Then, to me, to take it to the next level, is to realize that that change they’ve created within their own organization, or their product, or their service, could really have a wider impact. They understand that by building a tribe of followers, by creating a blueprint of what they have, by convening within their industry, that they can broaden their change. That, to me, is thought leadership.

It’s taking that knowledge of what you’ve done, the best practices, the lessons learned, and sharing them in a way to impact and broaden the impact that you’ve had.

John :

We’re going to tweet that out.

Denise:

That is when it really makes a difference, I think.

John :

Fantastic. We’re going to tweet that out. “Create a tribe of followers to be a thought leader.” I love it. You write for many, many companies like Fast Company and , and other big publishers. I love your story, which I believe you said comes from your book, Why Leaders are great storytellers. When you’re pitching someone, I’m constantly telling clients it’s all about being a good storyteller because people remember your stories, not your numbers.

I’d love to take a little deep dive, if we could, into why is storytelling so important. You said this line in here about, “We see ourselves in a story.”

Denise:

Yes. It’s exactly what you said. We remember those stories. We engage with story. We don’t engage with numbers. They’re forgotten moments later. A good story where you can share what’s the change that you’re bringing about … I learned this from two places. I learned this from myself when I was pitching the Springboard conference, going out and talking to media and talking to funders. When I could share the stories of the women entrepreneurs we were helping, that’s when I got people on board. It wasn’t the story of Springboard, that was somewhat interesting, but when we could share the stories of and the companies we were helping, being are very involved and engaged with those stories. They want to see how women are making a difference with the great ideas that they have.

Secondly, I learned it when I was trying to create a community of people who understood how to pitch their businesses. Here we are at Springboard and we get women up to tell their story about their companies. I have to say it was a little painful sometimes. They just couldn’t do it and they would not understand that a simple story of why they were doing their business was far more compelling and more likely to get an investor to come up to you after the session then it was if you stood up there and, “Our financials say we’re going to … ” Nobody cares! Yes, you have to have that, that is necessary, but not sufficient. The story is what people engage with.

John :

I love that line. We’re going to tweet that out. “Why is more compelling than your numbers.”

Denise:

Yes it is.

John :

One of the things I love that you wrote is, “When you simplify something, it doesn’t mean you’re dumbing it down.” So many people, especially in technology, whether it’s about artificial intelligence or whatever it is, they try to wow everybody with just how important this is and how it all works. It’s like, “No, explain it to me like I’m a seventh grader.” It doesn’t mean that we’re taking away or dumbing it down.

Denise:

The guy who I think really showcased this so well in the book is the guy, Avinash Kaushik. Avinash was at and he started this wonderful blog called Occam’s Razor. When he talked to me about that decision to step into being a blogger and, in his field which is search engine optimization and web analytics, there was a lot of blogs out there. It’s very complex talking about digital marketing, and web analytics, and search engine optimization. He realized that the gift that he could bring to his followers is this idea of un-complexifying. Which is that idea that we’re not dumbing down, but we’re simplifying information so that our followers can understand and actually learn from.

He was trying to get other people to adopt these search engine optimization tools, see what worked and what didn’t. As he focused on every blog post had to be un-complexified which, of course, is a made up word, but it just sums it all up for me. That’s what we’re doing here in the world. We’re not trying to wow people with the acronyms.

John :

Right. Denise, can you also speak to what you wrote about, about the importance of a metaphor as a way to tell stories?

Denise:

Yes. I really learned this so beautifully from Robin Chase’s Zipcar. She was one of the people that I immediately reached out to when I started my book because she’s always been a leader that I’ve followed and has built a tribe around her ideas on how we use peer to peer networks and how, as the founder of Zipcar, how she’s learned how building collaborative economy businesses is going to actually help transform the global economy by eliminating some carbon emissions. That’s a pretty complex story. Instead, she says what she’s always looking for is “What are the metaphors that people can understand?” She did this great blog post: Fossil Fuel is the new slavery. Morally and economically corrupt.

When you think about that, I want to read that article. I want to know why is fossil fuel the new slavery and what does that mean for my decisions everyday as I drive my car. I should be driving a Prius or a hybrid because I don’t want to be engaging in slavery. It’s not something I believe in. That metaphor captures people’s attention and gets them to examine their preconceived notions. That’s what we’re hoping for all of us when we’re trying to engage people in a new idea. We have to get them out of the mindset that they’re already in, that’s the way it’s always been done, and get them to reexamine and think in a new way. That’s what metaphors help people to do.

John :

The other thing that’s really valuable from your expertise and your storytelling is the importance of being vulnerable, which is so counter-intuitive to what people think they need to do when they’re presenting or pitching. It’s like, “I need to come across completely confident and 100% always perfect.” Ideally, when you show a little bit of vulnerability, that’s how people connect to you. You have a wonderful example of that, if you wouldn’t mind sharing that.

Denise:

I learned this myself, and I like to share the story. In 2011, here I am, I’ve been invited to speak on women’s entrepreneurship at the governor’s conference for women down in southern California. There’s 12,000 people at this conference, at least a thousand of them are in the room, maybe more. I’m on the stage with these three very impressive women, one of whom is literally a swimsuit supermodel who had a big business and was very well known and successful, and then these two women who’d written a book on entrepreneurship, and then there’s me who runs the Forum for Women Entrepreneurs and Springboard.

I’ve obviously been invited there to be the content speaker, because I had all the resources and I knew everything about … These other women were really there to be the pizzazz. I’m listening to them, they’re all presenting, presenting, presenting. I realize, “I’m four out of four. If I go to my content, I’m going to be blur in this whole amazing voice of the future and all these amazing women.” I realized I just have to get real. I have to rethink my presentation style.

On the fly, without any preparation, I told this story that … It’s very deep and meaningful to me, which is really about a challenging time that I had in my life when my father was ill, and my mother was ill, and my best friend’s husband was ill. Over this year, and those challenging times and how it caused me to reexamine my life and to rethink what I was doing. I shared this. Here I am, very emotional for me, and then I shared all my content, great, blah, blah, blah stuff that I had come to say.

I’ll tell you, it was this remarkable moment. After the talk, there was a line around the corner to talk with me. Here’s the swimsuit model who has five people. I’m thinking, “When they walked in that room, I’m sure they all thought they were going to talk with her because she’s the famous one.” By sharing this personal epiphany … Not just for the sake of getting people to cry and not for the sake of getting people to like me, but really from an honest place of why I went back to business school, why I realized entrepreneurship was the path for me, why it can be for you.

There was a theme and there was a line that I was drawing between that story and what I wanted them to be thinking. That caused this huge outpouring of people coming up and approaching me, and that’s what we want as thought leaders. We want to be approachable. This is not about telling stories just for the sake of stories, but for helping people see a path forward for themselves.

John :

That’s brilliant. That is just everything. The same thing is true when you’re pitching an investor. You want them to see themselves in your story and be part of your team and be inspired to wait in line. Of all the pitches they heard at demo day, or whatever the situation is, they want to ask you more questions because they want to know more about your story. It’s just a great, great example.

Denise:

That’s in fact what happened at our first Springboard. There was a woman whose business was not the best business of the 27 businesses that presented that day, but she walked out on the stage twirling a basketball. First of all, that got everybody’s attention, and then she told her personal life story about how basketball and this ability to be good at sports had allowed her to go to college and get these college scholarships, and now she was starting a business to help other athletes from very poor families get scholarships. Everybody was talking about her for the rest of the day. Everyone wanted to go and fund her business. Again, as I said, the business model? Nothing much. She, and her story, we all wanted to help those athletes because we saw ourselves in her, we saw the help she was going to offer as something we could get on board with. It was such a magical moment. It’s totally underlined for me why, as entrepreneurs, we need to be good at telling stories.

John :

Great. One of your other amazing skills is really helping people sell themselves. Let’s face it, that’s what you’re doing when you’re pitching for investors. You have this great one page plan that you talk about how you put that together, that it’s your goals about being visible, and your reputation, and how the fact that you had written that down and even shared it with some people … What somebody’d reminded you of, “Oh, I should put my name in for something as well because that’s on my one-page plan.” Can you tell us about that?

Denise:

(laughter) Oh, that’s funny. Reminders of your life. I had the opportunity years ago to become certified to teach and to use, of course, the one-page plan. A guy named Jim Horan over in Berkeley wrote this book called the One Page Plan. There’s numbers of other versions of the book. I read the book. I used it for my own business. I immediately called him and said, “Wow! This was great. How do I help other entrepreneurs use this tool?” I got certified, and then of course, wrote my own plan as you’re supposed to do when you learn a tool like that. Then, I had this opportunity. This woman from my past called me and said, “There’s a board position open for a for-profit board. Who do you know who should be on this board?”

I’ll drop you an email, let me think about it over night. In the morning, I dropped her three names of great people that I thought, and she wrote back and she said, “Didn’t you show me your plan, and wasn’t it on your plan that you wanted to serve on a for-profit board?” “Oh, yeah!” your own plan. You can’t put it in the drawer. You’ve got to share it with other people and have them hold you accountable. She put all four of our names forward, by the way, and I got the job being on that board. It was so much about having written it down, having committed to it, and having publicly shared it in a way that let those other people bring it back to me and invite me to live that future that I had seen for myself.

John :

Write it down and share it. It’s really the key. You had someone who’d hold you accountable. One of the things I want to ask about, it’s a perfect segue when you’re talking about how that led you to being an advisor, is you’re an advisor on multiple companies, but two that really jump out at me, and I’m probably going to mispronounce both of them … K-O-K-K-O. I’m to even going to try.

Denise:

Kokko.

John :

Kokko. Okay, just like Coco Chanel.

Denise:

Yes.

John :

Tell us about Kokko. I see that it develops color accurate mobile apps for making shopping easy, which I guess it has everything to do with fashion, but maybe paint colors? That sounds like a really great product.

Denise:

Eventually, it will be all of those things. The CEO is actually a woman from Hewlett-Packard. I had met her, we’d served on a panel together years ago. She told me about this idea she’d come up with for using the color technologies within HP to create an app for one of her clients to actually help women choose their foundation makeup color. Turns out, you’d probably never had this challenges, but walking into a store and trying to buy foundation that matches your skin color when you cannot see the color on your skin, it is very hard.

Women often buy the wrong makeup. Yet they often stick with that makeup for years because they don’t know how else to do it. They created an app to actually do that matching. You can take a picture of your skin and in any lighting it will do the color match and then come back to you with recommendations for the perfect makeup for you. They built this within HP, but nobody at HP had ever actually did anything with it.

Eventually, she was able to take that IP out and that was what she built Kokko around. That technology, she’s now rebuilt and owns the IP for that, and this first app is going to launch in the next month or two. It’s a very cool little app that allows you to do that. Take a picture and then get your perfect matching foundation. More than that, it also then recommends other products that would be good for your color and skin tone. Eventually, absolutely, for paint colors, for men to buy the right tie and go with the right shirt, there’s all kinds of color challenges for us, especially when we’re shopping online. You can’t touch it, you can’t see it, you can’t compare it. Technology allows you to do that.

John :

I can even see it for cars. “Do I like that shade of car? It looks different in certain sunlight versus not, and all that great stuff.” What I also find fascinating about that is her background in HP, which is known for having the best inkjet printers, which is all about color, and she’s completely taken that expertise. The questions investors ask a lot is, “Why you and why now?” She is the perfect background for why she’s the one to be running Kokko.

Denise:

Which is why I’d love to tell the story of the day she decided she was leaving HP and she called me because she’s thinking, “What am I going to do next?” I went and had lunch with her and, she didn’t know me that well at the time, we met a few times, but I’d heard about this technology for so long and had been so excited about it that I literally said to her at lunch, “I know you don’t know me well, but I just want to see that right now I would get down on my hands and knees to leave HP and start this company.”

She looked at me very startled. We had a long conversation that day of what it would take for her to do that. She now calls me the fairy godmother of that business because I really saw that future that she’s now living, and she’s living it so beautifully. Now I’m an investor to her company, I’m an advisor to the company. Now she can blame me if it all doesn’t work out.

John :

I’m sure it’s going to work out with you as part of her tribe. The other one, let’s just briefly touch on that if we could, is Vermilion? Did I pronounce that right?

Denise:

Yes.

John :

I love the concept that there’s a blood test to decide whether a tumor is malignant or not. What a problem-solution you’ve got going on there.

Denise:

It’s a little deeper than that. What they have is a test, a blood test, that actually will tell a women early, with some of the first diagnoses of endometriosis and other challenging early diagnoses of problems that you may nor may not be a candidate for ovarian cancer, and be able to treat that disease much earlier, in the stage 0 and stage 1, rather than today which we’re mostly not finding it until stage 4 when a woman is going to die within 3 to 5 years.

It’s a women’s health company. This is the first of their blood tests that is going to be for identifying these markers that are now being able to be identified, and using some very complex algorithms, be able to identify and help save lives. I think it’s remarkable what they’re doing. I’m so proud to be part of it. Even more exciting, is Valerie Palmieri, who is the CEO, was a Springboard presenter and now, as I said, serial entrepreneur. She’s now coming back with another company … Her knowledge from the first one, to even bigger success on the next.

John :

Great examples of how to pitch something in a very short amount of time. We easily understood what the problem was, and what the solution was, and why the people running it are the perfect people to be running it. That’s incredibly useful. Before I let you go, I just want to ask, really quickly, about your VRE program and when you’re selling something is … Have a vision, be able to execute it, and focus on relationships. That’s what the VRE stands for. Do you have any words of wisdom you can share with on that?

Denise:

This model was developed by Dr. Frank Greene, one of my mentors who’s now passed, but he really studied, deeply, a lot of very, very successful executive and entrepreneurs. He recognized that the skillset we all need to be successful as leaders is this ability to craft a vision and be able to articulate it, then to build the relationships that it takes to implement that vision, and third to be able to execute. His point of view is that the best leaders are good at all three of those things. Those of us who may not be, better figure out how to supplement those skills. Mostly, what we need to be doing is building on all of those skillsets throughout to get better and better.

John :

So helpful. Besides your wonderful book, Ready to be a Thought Leader, and the One Page Plan, are there any other books that you would recommend about business or life to our listeners?

Denise:

I’m really found of that book, Switch, by Chip and Dan Heath. I don’t remember the subtitle, but I always say it’s something like How to make Change when Change is Hard. They give some very terrific stories to start with and, secondly, some blueprints for how to make change when change is hard. I quote them in my book and I use their theories as I go out and talk about being a change maker. Ultimately, being a thought leader is about starting as a change maker, so you have to be successful at that and I think that book is very good at helping you to do that.

John :

That’s fantastic. Denise, we’re obviously going to list your book and these other books in the show notes for people to click and buy it, but how can people follow you on social media, what’s your Twitter and all that good stuff?

Denise:

They can find me on my website at thoughtleadershiplab.com, and then, secondly, my Twitter handle is ThoughtLeaderLab, but since that whole thing didn’t fit, there’s no “er” in ThoughtLeader. It’s ThoughtLeadrLab without the second “e”. I’m also on LinkedIn and very active there. People can find me there. I have a Facebook page under Thought Leadership Lab as well.

John :

Fantastic. It’s been a pleasure. Thank you. You are so full of information. I can see why you’ve won all these awards and why you’ve started all these things. It’s all full circle with the things you’ve started are now the things that you’re advising and investing in. It all comes back to you which I’m just thrilled to see. Thanks again for being on the show, Denise.

Denise:

Thank you for including me. I appreciated the conversation.

John :

Thanks for listening to the successful pitch podcast. If you liked the show, please go to iTunes and write a review, and encourage your friends to write reviews too. It really helps get the word out. People say that the longest distance is between someone’s mouth and their wallet. People can tell you they’re going to invest, but when it comes time to write the check, they don’t do it. How do you get people to say yes and then follow through?

Visualize yourself on the left side of a riverbank and you have to cross the river. On the other side of the river is where the funding happens. First, you make up your idea, then you make it real, then you make it reoccur. Once you start dipping your toe into the water to then get the funding, that’s where I can help. I can get you across that river faster than you would on your own with a lot less frustration than you will get when you hear a bunch of “no’s” and you don’t know why. If you want some help getting funded faster with less frustration, go to my free funding webinar, SellingSecretsforFunding.com/webinar, sign up, and get in depth information on how you can get funded fast. Thanks.