Raising Venture Capital for your Media Startup

Trusted social intelligence for the enterprise

Melinda Wittstock @Veriate @NewsiTnews

(and what happens when you don’t )

How to raise millions in VC dough …

…and live happily ever after

(and perpetual fundraiser)

Melinda WittstockSerial EntrepreneurAward-winning JournalistMedia-Tech ExecSocial Media MavenMother of 2 (plus a dog)MBA, SHK

So how can I help?

Brands

WHAT NOT TO DO:

MY TOP 10 DON’TS

a

Brands

A little early tip for all entrepreneurs…

THINK LIKE AN INVESTOR

(and do the math)

Trusted social intelligence for the enterprise

…and its growing faster than Moore’s

Law.

Think about it.

Brands

THE AMOUNT OF DATA CREATED ON TWITTER & FACEBOOK TODAY IS MORE THAN THE DATA BEING CREATED ON THE REST OF THE

WEB.

make better business decisions

engage with contextual content

identify and reward customers, sources, ambassadors

Our mission at Verifeed

To make sense of the world’s social conversations so enterprises can:

Why Verifeed is massively scalable

Brands Publishers

Financial

$100 Bn US News Publishing & Broadcasting

$1Bn+Social software spend

(Growing as fast as the data itself)

Gartner, 2013

$1.3 TrillionUS Financial Services$10 Bn Financial Ad spend 2012

$432 Bn US Consumer Goods $118 Bn Content marketing spend, 2013

How Verifeed makes money

B2B Platform Licensing

Enterprises pay recurring monthly fees on annual contracts with pricing tiers based on:

―Data usage

―Social sources

―Service level

Eliot BergsonTim Berglund

Peter Harrison

Renee Lewis

Duncan Work

Matt Prohaska

David Lawrence

Why we’re the right team to execute

Paul Herzog Chief Architect

Melinda Wittstock

Founder & CEO

‘Hands on’ advisors

BD/Sales ‘Growth Hacker’Data Scientists, Product

Manager Identified

Use Cases & Metrics

Publishing:March

Madness

Challenge: Boost traffic, time on site

Action: Publish relevant Tweets from/about the players and coaches on NBC TV affiliate

Result: Time spent up from 10 to 26 seconds, Twitter referrals up 129%

Brands:Dog Food

Challenge: Find US customers/influencers

Action: Filter Tweets about UK luxury brand & competitor products, consumer attitudes

Result: Ambassadors identified; ‘intel’ guiding US launch marketing strategy

Financial:Compliance

Challenge: Assure Tweets are compliant with FINRA

Action: Source and parse market-moving news for reliability & exclude Tweets with investment advice to eliminate liability.

Result: Verifeed technology delivered 98% FINRA compliance

Verifeed: Brands

Lily’s Kitchen Goal:

Identify influencers and ‘early adopters’ in U.S. market (focus NYC, CT, NJ) ahead of 2014 launchObtain critical ‘intelligence’ to guide marketing effortsConvert into paying customers

Verifeed Platform: Identify and qualify targeted ‘WOM’ influencers & customers Capture key insights into pet owners’ motivations, desires,

behaviors to guide launch marketing strategy in the US Q1/14

Enable direct interaction with targeted users & custom publishing to engage, reward and convert into customers

Pet Influencers on Twitter

Verifeed: Recruitment

MTM Careers Goal:

Connect the right people to the right jobs via Twitter Improve service to both job-seekers and employers to

increase revenue

Verifeed Platform: Identify all relevant job ads on Twitter Identify all people Tweeting about specific jobs/sectors Match specific job ads to relevant job seekers by industry

and job title Capture key insights into job seekers and employer in the

clean tech and ethical investing industries Enable direct interaction with targeted users & custom

publishing to engage, reward and convert into customers

How Verifeed IP is differentiated

Verifeed’s algorithms and automated processes uniquely replicate what investigative and analytical journalists do to:

— Identify patterns— Put developments in context— Qualify source reputation and

expertise

Uncovers credibility of influencersEliminates redundant, off-topic, search resultsAllows instant custom publicationEnables real-time engagement/recruitment of users100% Twitter fire hose, complex filters Soon automates discovery/contextual search

Competitive Differentiation

Twitter APILimited to 5% fire-hose & single-term searches by hashtag or handle, no engagement tools, analytics

Social media management

Twitter search engines

Influencer assessment

Broad social data search/analytics

Social management dashboards, mediocre Twitter search, no source reputation/accuracy filters

Focused on Twitter brand monitoring only, not

contentFocused on user influence (not credibility or expertise); not intended for search

Complex search filters, analytics, dashboards; no veracity / reputation emphasis; price point too highHistoric Twitter search

Early warning for market moving news/trends

How Verifeed forces global growth

Beach-heads first US verticals

Up-sell with more social sources / data & features

Increase market penetration

Grow globally

SportsBrands

Add verticals

Hiring

Publishing Politics

Financial

Timeline to Stage Execution

― Debuted 2013 SXSW

― Grew pipeline to 260+ in 2 weeks

― 62% wanted next steps post SXSW

Market Validation

― Prove metrics ― Test use cases― Find early

adopters― Incorporate

customer feedback

― Average of 9 demo requests per day

Product

Paying Partners

― Convert pilots to charter revenue

― New use cases― Up-sell new

features

― Automated contextual alerts/discovery

― Add social sources

― Mobile SDK― Enhance

algorithms

Platform Growth

― Expand sales, biz dev, product team

― Expand into next verticals

― Full price point― Expand reach &

revenue within each company

― Enhance ‘fact check’ algorithms

― Ongoing UX/UI improvements

― Reputation scoring

MARCH 2013 PRESENT – 3Q-4Q 2013 1Q 2014

―-Enhance UX/UI― Expert scoring― Automated @mention recruitment― Automated pre-

filled search

Pilot Programs

ProductProduct

Hire‘Growth Hacker’/Deal CloserEngineers/Product ManagerSupport Data Scientist(s)

SupportQ4/13-Q1/14 Tech RoadmapData /Hosting CostsMarketing/Sales

Investment Sought

$30KMonthly RevenueJan 14

$5mmRun Rate Q1/15

$92mmAnnual 2017

Q4/13

Q1/14 EnhanceReputation scoring, pattern recognition & other algorithms; UX/design; automated adaptive discoveryMobile X-Platform/SDKSocial sources

Expand / ScaleBD, Sales, Engineers

$500K+Bridge

$3.5mm+Series A

Financials: Five-Year Projected 2012 2013 2014 2015 2016 2017

# Enterprise Deals

Recurring Fees

Ad Revenue Share

TOTAL REVENUE

Cogs

Operating / Sales

Gross Margin

EBITDA Margin

EBITDA

$166k

$163k

($329k)

9

$42.5K

$42.5K

$377k

$389k

($711k)

47

$1.8mm

$153K

$1.9mm

$2.3mm

$2.6mm

(21%)

($2.9mm)

175

$9.3mm

$1.1mm

$10.5mm

$4.4mm

$6.1mm

56%

(1%)

($52k)

456

$28mm

$6.2mm

$34mm

$10.3mm

$12.5mm

70%

33%

$11.8mm

776

$75mm

$20mm

$92mm

$18.4mm

$19.9mm

78%

54%

$44.8mm

Cash positive Q2/15

Thank you

Melinda Wittstock | CEO & Founder202 274 1479Melinda @ Verifeed.com Twitter @Veriate

Demo at Verifeed.com

Trusted social intelligence for the enterprise

Brands

WHAT NOT TO DO:

MY TOP 10 DON’TS

$30K monthly revenue

Customer Trials

Proving Use Cases & Metrics

Yahoo!’s Marissa Mayer: “Revolutionizing social media with a differentiated solution”

Our evolution…

$100K Founder &

Family

Nov/13-Feb/14

Mar/12 Sept-Oct/12

Mar/13

First Revenue

Jul/13 Sept/13

$3.5mm+Series A

Platform Enhancemen

t & Sales

$500K Equity Round

($3mm pre)

2,0

iPhone

B2B platform debuts at

SXSWPipeline 260+

rebranding

$316K Angel

Convertible

Don’t Avoid mistakes

10.

(DO learn from them!)

Don’t Assume the goal posts won’t shift

9.

(What you need to prove)

Don’t Assume you can raise money when you need it

8.

Ask for it when you have plenty …

Don’t Assume you can control everything

7.

Timing matters & a lot is beyond your control

Don’t Hire employees

6.

You want ‘believers’ with skin in the game (who will sweat it out with you when cash is running out)

Don’t Put fundraising ahead of sales

5.

Investors want to know someone somewhere will pay you for something

Don’t Assume investors will believe your numbers

4.

They won’t and you shouldn’t either

Don’t Spend anything you don’t absolutely need

3.

Be frugal and conserve cash

Don’t Talk only about how cool your product is

2.

Investors only care about how much money it will make them and when

Don’t Know it all.

1.

Why ‘teachable’ matters

Don’t Don’t assume VC is your path.

OK, there’s one more...

Will you have $200m revenue in 5 years?

Don’t Do it just to get rich.

OK,and one last thought...

Most entrepreneurs don’t. (If you want to live on a beach, do it now!)

Thank you

Melinda Wittstock | CEO & Founder202 274 1479Melinda @ Verifeed.com Twitter @Veriate @NewsiTnews

Demo at Verifeed.com