Your First Steps: 3 Essential Actions To Take Post-Hackathon - Alexander Golding

[Music] hey everyone hi how are we doing today i know it's bright and early on a saturday morning i know most devs are asleep but um we're here and we're gonna make it so my name's alex golding and i'm here to talk to you about how to take your hackathon demo and turn into a vc funded startup and you might say you know who is this guy well my name's alex like i said two-time founder former fellow in finance at george washington university i was at solana labs's investment team and now i'm at delphi digital doing investment so when it comes to vc funded startups i got both the entrepreneurs experience and the investors experience and i'm here to kind of share some of that with you so i'm going to speak kind of quickly because we've only got 20 minutes and a lot of content to cover please excuse me if there's also this is kind of high level if there's anything you want to dive deep into just raise your hand we'll do it if we've got time if not i will set up some time one-on-one for you and so like i mentioned here's our road map seven key steps to go from hackathon project to vc funded startup first you've got to make a decision second create a strategy that strategy piece is super important then you've got to manage inbound interest everyone is going to want to talk to you you are the celebrity then we've got to start building every nothing i like more than a builder then you can fundraise you can incorporate and lastly it's time to take all that money and get on some rocket ship growth who's with me all right so the first rule is we need you to make your decision this is something you'll be doing for several years you know do you want to continue down this path why or why not i recommend everyone takes a pen and a paper and answers all these questions and what's most important the way you start is to identify your goals and pursue them relentlessly because everything else will follow from this so you need to ignore everything and everyone until you make your decision i'm telling you this as an entrepreneur who when i was starting my last business i had a brilliant idea i think it was brilliant and then i asked everyone and you know people who had no stake in the game and had no you know uh they had no downside and no upside really they gave me all sorts of bad advice so i say ignore everyone if this is coming from a pain point listen to that pain point and ask yourself these five questions am i ready to grow this at hyper speed what would this look like with an extra four or five engineers what about a designer what if i had a partnerships lead etc now once you've written that down ask yourself what would this look like with a 20 person team because it's very different being one or two or three people at a hackathon and then having 20 people which is where you'll get to so it's good to start thinking about it right and how ask yourself how will this project win the hearts and minds of your target market and that's super important because once you win a mind share market share will follow and lastly how do your points of differentiation separate you from your competition and we're going to go in depth on this um in terms of strategy it's really important so i've modified kind of this old maxim and my version is if you want to go fast go alone but if you want to go far have a strategy and so that's super important there's many types of strategy we're going to get into them on the next slide but basically you need to build a moat just like this castle has a moat you need to build a moat between yourself and all of your competitors out there so um i created this little diagram i'm happy to share it with you after but and so you know no need to kind of rush through it but there's six there's multiple types of strategy here are six that i've identified for you first we've got our corporate strategy and again this is the overarching strategy under which everything else kind of follows so how are you different how do your differences encourage usage or encourage purchases are you leaning into your core strengths are you leaning into your technology strengths right so i'm formerly at solana and i can tell you that the best protocols on solana lean into the unique capabilities that that protocols architecture provides marketing how are you going to capture mind share if i if you leave you with nothing else it's strategy and then mind share mind share is super important you need to live in people's minds fundraising why do you need money well how will you spend it but how is not as important as the why always remember that why why why what core deficiencies or gaps will raising money fix what kind of opportunities will raising money bring you again let's go back to that situation what would it look like with a team of five with a team of 10 a team of 20 how can you start to dominate your your total your little niche um just to kind of run through things hiring we've been over tech we've kind of been over i'm going to tell you guys a kind of a brief boomer-ish story so in the turn of the millennium god forbid um 2000 2001 2002 there was this hotel brand called windham maybe you know about the windham grand maybe you've stayed at the window back then what all hotels had is they had their data servers on site what that meant was they couldn't share data between locations and they had no idea who was checking in in dallas who was checking in in austin who was checking in in paris so what they ended up doing 22 years ago was they created a cloud architecture oh my god but really 20 years ago that was that was quite like innovative and because of that they were able to grow they were able to lean into the technology strengths come up with some data analytics things back when no one was doing data analytics and v and more than triple their market share in a few years so don't forget to lean in to your technology strength and then of course we've got tokenomics here at delphi we specialize in token design right we've worked with all the major protocols um ave compound synthetics axi etc and so you have to ask yourself you know why do people want my token hey chad um what will it do and how is value going to accrue to it we have a totally separate kind of slide deck for that so if you guys want to talk to economics see me or see kevin later in terms of i'm this is a brief kind of market entry framework i'm going to skip over this be just out of the uh out of time rule number three as a vc i want to see nothing more than you know how to build sometimes you know i get pitched and people say if you give me 40 million dollars i will go buy a laptop and start coding get out of here you know i want to know that you know how to build right nothing is more important to me than seeing that you have the discipline to like ship code because that's why we're here we're going to change the world through your code and through our like strategic help and so i put this nft up here i don't know how many of you guys know this but this is a ssc super shadowy coder off of genesis go and the reason i put it here is genesis goes an rpc kind of aggregator on solana they spent six months building out their service before they dropped the nft before they dropped the token i think that's huge a lot of people say oh you need token incentives this and that true but in my mind and this is what i tell and work with all of my portfolio companies on it's after you find product market fit because these token incentives will distort the customer discovery journey or the usage discovery journey and you might say well how am i going to track people everyone else is paying money trust me the good protocols get used regardless um so you know rule number four once you've kind of gone this far you've made it you've created a strategy you've made a decision you've built a little bit you know maybe you're here at the hackathon putting things together now you need to manage inbound interest and this is super important because you're in crypto it's the mo it's the longest bull run i've been here for years i never thought btc would hit 40k 60k you know i never thought any of this right and so you just uh you just kind of need to deal with the froth by by being like drake right say no say just say no to the leeches no to the karen's if people don't convince you in their first like three minutes of talking to you that they just want to support your project and they're an undying believer thank you next so five right we need to start fundraising so you've built you've you've built a strategy you've made a decision you've built a little product now you can fundraise right and so we need to kind of understand the dynamics of fundraising um i do have a video link to a youtube thing but for some reason it's not showing here i'll send that out after if anyone wants it but basically you need to understand the difference between a fund and an angel right so funds constantly put money out into these early stage projects traditionally unless of course you're a crypto like crypto native angel traditionally angels have their portfolio divided up into multiple different asset classes so if you a quick rule of thumb is a 20x multiplier so a 40 million dollar fund is equivalent to an angel who is personally worth 800 million or a 50 million dollar fund is equivalent to like a billionaire right because that's that's the portion that they're putting into early stage ventures um and crypto it's a little different because most of us made our money in crypto so we're like fully allocated to crypto but still you just need to understand that we need to understand the current pricing in the market you need to understand that this fundraise is probably going to be your first and maybe your last appearance in the technology press tech crunch all the coin desks the rest they want to hear about fundraise they want to hear about those juicy juicy dollars lastly i've got this little meme about internet over radio um if my youtube were gonna work i think here it is okay so for those of you who like to watch silicon valley you'll remember this scene again i don't think we really have the time to go into it but um the idea is uh russ hanneman is this billionaire investor and he's got this startup company and they're talking about you know designing their protocol to make money and he goes revenue you can't have revenue you need to be a pure play i don't want to make a little bit of money all at one i don't want to make a little bit of money every day i want to make a [ __ ] ton of money all at once right and so he's speaking kind of like tongue-in-cheek this is meant to to kind of poke holes at silicon valley but the idea is you need to ask yourself like how are you going to uh create value how are you going to capture that value and at what stage and point in time is that all going to occur so it goes back again to that strategy piece that we covered at the beginning of this speech rule number six right so incorporate and you might say alex you're totally messed up why would i not have a corporate entity until after i fundraise so here's the dirty little secret your vcs are gonna make you pay for the legal fees for the fundraise so they can give you money so why the hell are you going to spend on it before you have the money right get the money then incorporate and don't tell anyone i said that but um just kidding so as i was saying as a crypto startup just a kind of brief little thing about incorporation you're most likely going to need two entities one that's going to do software development so if you guys see at the top we've got hero and then one to steward the ecosystem usually this is a foreign foundation so in the bottom right you see hero network that is their form that is their foreign foundation so what is the difference you again software company at the top this is where you get paid this is where you pay your colleagues this is where you do some business development work and then stewarding the foundation stewarding the network and stewarding the token is out of the foreign foundation why a foreign foundation well five years ago and god i know that makes me a dinosaur here but five years ago we had we realized that there was this like little kind of annoying thing called the sec and this annoying thing called like the howie test so the idea was right if we were selling tokens um and people were buying them with an expectation of profit without contributing to them then uh then that's a security however if they are buying some type of instrument that's not a security that is stewarded and kind of shepherded and genus and birthed by a non-profit foundation you can you should not expect profit from a non-profit foundation so that's how we came up with this structure this is how the lawyers do it there's some like alternative ways i'm not going to get into it i'm not a lawyer i'm just telling you in my years of experience in this field kind of what this like de facto standard has become another thing that's really important is just like anything in life get three bids it doesn't matter whether you're getting you know a plumber a hvac or a lawyer you need three bids just to kind of gut check off everyone lastly we need you to onboard banking partners it's almost impossible in the us by the way to get a bank if you tell them you're going to issue a token so you didn't hear it from me but that's just kind of hard um if you've got a good if you've got some good partners like i i steer all my portfolio companies uh to a trust company which has affiliate banking partners so the trust company acts as the bank but really they're all they're assuming all risk on behalf of your company and then so they're dealing with like the big banks on your behalf um you need to get payroll you get operating sys operation systems working and again this can be done during the first few months it doesn't have to be done immediately but think about it um okay so now that we've got all this stuff done right we've incorporated we've raised money we've come up with a strategy we've designed a moat remember that mode don't forget about this mode you know we've ignored all the karen's right now it's time to grow um and and you know like like this guy says you know one does not simply grow right it comes from this entire process that we've kind of just outlined over the last well how long 13 minutes or so um and so this is really important because now that you've accepted vc money work we've de-risked that kind of capital portion to you for you if you've got good vcs we've de-risked some of your strategy right we've de-risked some of your business development right because we've made connections to your exchanges to your partners to your marketers whatever right um and so now it's up to you to really do your part and build ship and grow i mean you have to ask yourself how am i going to hit a thousand percent year over year growth how am i going to hit 2 000 10 000 year-over-year growth and some of this you know sounds ludicrous how am i going to grow 100 x in a year but it happens man i told you i was at solana last year beginning of the year we were at a dollar 13. you know then we went up to like 260 at our peak so it can happen and if you think that you are that good we need you to be prepared for that kind of growth i mean who wants their token to go from a buck to 260. i do all right cool we got some we got some cool people in the room um so just remember the market is waiting for you um in summary and some of these are in a little different order but i did this on purpose but you need to make a decision remember identify your goals and kind of write them down and go with them you need to create a strategy and that strategy is the why and and it's the how and everything else stems from this you need to manage inbound interest again say no to the karen's you need to build okay build build build build build then we need to fundraise once you fundraise you can incorporate using the money that these ecs gave you and don't be surprised when they ask you to pay their legal bills you need to incorporate right oh i just said that and uh you need to incorporate and then grow um and so just if you just to kind of like remember what it's all about i put the fundraise in the big in that big bubble because once you have that fundraise you've once you've got that money in the door you've really got kind of like the combustion engine that's going to drive everything else you're the human capital we're the financial capital let's make it happen so with that i'm just going to kind of wrap up if there's one thing i can leave you with it's that there's never been a better time in the and the evolution of human history for you to take your intellectual prowess and turn to something that can change the world so with that i want to thank you and we're going to open up for questions for the next five minutes thank you [Applause] anyone have any questions i usually get questions about the fundraise and about like the the dual yeah wait you got a microphone um i like your uh opinion about like being discerning about inbound interest and so maybe talk a little bit about like what makes i mean you simplified it by saying if they're not interested in your um in your product or your venture right away immediately chase them away but um can you talk a little bit more about like what makes it what are some criteria to consider for taking inbound interest and looking at funders yeah so i was referring not only to fundraising but also to consultants to marketers to everything right and it's it's just you've got to understand you just have to feel they have to make it clear to you again the first few sentences that they believe in your project and that they're willing to support if they come in and they're negging you like they're putting you down which is different from being critical critical means are using their brain negativity means they're like saying you're never going to make it and that's kind of contrary to the ethos here then that's like the main criteria you know i can't tell you like specific keywords to look for different cultures have different ways of expressing things but i i think that that's super important because in the beginning at the beginning stage it's kind of like a baby right like if if you don't want to put like people around your baby that are going to tear it apart and unless again if they're being critical you need to listen to that because maybe you like didn't see the risks appropriately which is different though from like you know being negative yes uh this gentleman please thank you uh so when uh when a founder is uh looking for money in this seed precede kind of stage um is there any uh rule of thumb in terms of like budgeting like should they budget for the next six to 12 months or even further than that or even shorter um to kind of figure out how much they should they should raise yeah so it really depends um i try to tell people to budget 18 months right in crypto they're shorter cycles if you were in a traditional vc it's a traditional company it's 24 months uh maybe a little more because you need like a above what's the word i forget but just like in case [ __ ] happens it's kind of fun but um in crypto you know 12 to 18 months thank you guys 18 months you can always raise earlier i get really nervous as a vc it's a big red flag if you like raised three months ago and now you're raising more just because it's like super hot sometimes you have to because you just know this deal is good but it's a red flag so i like 18 months you can start fundraising again if you're in a bull market like three months before that four or five months before that but anything more if you're like outside of that six-month window in crypto like get out of here right unless it's 2019 again you know when eath hits 80 or something then like okay cool like we're not in a like frothy market but in today's world and for the next few years the way i see it we're in the most unprecedented bull market of all times and we'll be um guys i think my time is up i'd like to thank you um if you have any questions you can reach out to us on delphi digital you can find me i'll be in the back here and again thank you very much