Encore Alert founder James Li hit a major milestone this week: his Arlington, Va., startup raised its first round of institutional funding. The $390k seed round was led by NextGen Angels, along with other investors like Clarabridge’s Sid Banerjee, Google’s Tyler Peterson, and CIT. It was also James’ first time raising money, so he shared some lessons from the five-month process:
1. Be disciplined. Overly prepare for meetings, track the progress of relationships with potential investors; and follow-up within hours of meeting an investor. James also recommends writing hand-written thank you notes.
2. Obsess over the pitch deck. Investors aren’t looking at business plans anymore, says James, so the pitch deck has to be fairly detailed and clear. Encore’s experience in the Acceleprise accelerator also helped make the deck so impressive that many investors told him it was one of the best they’d ever seen.
3. Share the social proof. James showed investors press write-ups, customer testimonials, and names of other investors interested in the company. “Showing them there are other people in the area who are sincerely interested in our product and company goes a long way to influencing people’s investment decision.”
4. Talk to as many people as possible. James was told to set a goal of talking to at least 150 potential investors. He came close.
Encore Alert was launched last August by James, Felipe Lopes, and Tammy Cho, while students at Georgetown. The company’s software scans thousands of brand mentions and related tweets to identify marketing opportunities like trends, influencers, and spikes. The Consumer Electronics Association was one of Encore Alert’s first paying customers. The company will use the funds for product development and to add technical, sales, and marketing people. The only outside funding the startup has received before this seed round was $30k from Acceleprise, the DC enterprise technology accelerator Encore Alert recently completed.
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