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how they funded it Athlete Network

Athlete Network on How to Pitch to Investors for Millions of Dollars

How they funded it Athlete Network

Chris Smith founded Athlete Network in 2013 with a simple mission: create an online community where athletes can fuel their driven lifestyle. They recently closed a multimillion dollar funding round and have great advice on how you can pitch like a pro (entrepreneur.)

Athlete Network keeps former athletes (professional, college, and otherwise) competing, uniting them in one social network that provides them with tools to network with like-minded individuals, unique athlete-to-athlete content and the most efficient access to employers that embrace their competitive mindset and push it to higher levels.

Athlete Network offices out of Plexpod in Lenexa, Kansas, and has worked with the Enterprise Center in Johnson County.

This, is their story:

Aside from funding (we’ll get to that soon), what’s your big news in 2015/2016?

We recently partnered with NFL Hall of Fame quarterback Warren Moon, who is as passionate as we are about building a community to support the world's 300 million athletes and their life goals. Warren is utilizing his network, bringing in members such as Jerry Rice, Ronnie Lott and many others to provide exclusive athlete-to-athlete content for our members. In addition, Warren is helping us build a portal with professional sports teams making it easier than ever for our members to apply for their open positions. This portal recently launched on our site.

We also just entered into a three-year agreement with the U.S. Olympic Committee to build and host their athlete career and education site for the Team USA athletes. This provides their staff, athletes and sponsors a technology platform to guide Team USA athletes in their career after elite sport. With Rio coming up, the timing could not be more perfect.

How did you find out about Plexpod? How did they help you?

A colleague introduced me to Gerald Smith while he was starting Plexpod. I toured the facility and saw that it suited our need. Being in Plexpod has helped us in a few ways. It allow us to:

  • Have office space we couldn’t necessarily afford or want to own outright
  • Attract better talent as we grow by being in a state-of-the-art facility
  • Add a level of sophistication and validity when we entertain our clients
  • Work and collaborate side by side with other crazy entrepreneurs
How did you finance Athlete Network?

I used my wife and my savings account to start the business. Bootstrapping at its finest. I didn’t pay myself for a year. We had to live very lean during that time.

It was a pain to go through, but by spending all of our money I knew I had to make it work! A lot of entrepreneurs give up earlier than they should because they don’t jump off of the cliff.  Putting my own money into the business helped me to grind through some of those tough times, including launching the first version of our website, which cost more than I ever could have imagined.

Tell us more about your recent seed round (& congratulations!) How did you decide that it was the right time to pursue outside investments?

That became clear when I was getting market acceptance from clients of all sizes: from regional companies to the biggest in the world . Clearly, I was building something that was needed, but I didn’t have the technology or knowledge at hand to build what they needed. If I didn’t grow my tech and sales team, I wasn’t going to be able to meet their needs. (More on when to approach investors.

How did you prepare to pitch to investors? What was the best advice you got along the way?

I read every blog I could, reached out to entrepreneurs who had raised money and put a lot of work into figuring out how to tell our story.

And then when I first started talking to investors, I kept getting, “We really like what you’re doing and we want to keep our eye on you.” But no term sheet.

Finally, I went to Silicon Valley and I got great advice: your business isn’t metric-ed enough. It turned out the entire time I needed three things: customer acquisition cost, lifetime value of a customer and growth expectations.

All I needed was a simple pitch deck laying out our financials and where we were going. By the time it was all said and done, I modified my pitch deck 60 times. I eventually trimmed my pitch deck from 30 to 7 slides. (More on how to pitch to investors.

The finished product made it easy to see what our goals are, how we will reach them and what the business will do to grow to our valuation. It doesn’t take much to show investors that they’ll get their ROI!

How will this round of funding allow you to take your business to the next level?
  • We will significantly expanded our member acquisition strategy by going into multiple markets.
  • We will sophisticate and update our technology while moving more of our building in-house.
  • We will continue to grow our team.
What advice would you give to other entrepreneurs who are seeking financing?

If you’re going to be raising millions of dollars, figure out your metrics. Investors want to see you executing, fast. A cool logo, perfect website and great PR are all important, but investors are going to see right through that and just want to understand metrics.

After quite a few pitches, I got frustrated because no one was telling me, “No.” Everyone kept saying, “It’s impressive what you built.” Things finally started to change when I was more straightforward, “You and I both know this isn’t going to end with a term sheet, what did i miss?”

And the answer should have been obvious the entire time: show the investors how you are going to take their money and significantly increase the value of your business.

We all think we’re building something that is going to change the world. I spent way too much time on “solving the grand problem” and not enough time on how our business can grow thanks to the investment.

You need three things to impress an investor: customer acquisition cost, lifetime value of a customer and growth expectations. And a sophisticated roadmap to get there. I can’t say it enough.

When you know your metrics, prove them in a couple of markets then show how you can use that formula in other markets. Don’t try to conquer the world at once.

For more on Chris Smith and Athlete Network, join them on LinkedIn, like them on Facebook, and follow them on Twitter and Instagram.

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