13 Steps For Raising a Fortune in Start-up Funding
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Reuven Cohen
Krish Ramakrishnan, Co-Founder, Blue Jeans Network With news this morning that Box has raised an astounding $125 million in venture funding, it seems that there’s never been a better time to raise capital for a start-up.  Although for many aspiring entrepreneurs, the journey still remains a mystery. I recently had the opportunity [...]
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With news this morning that Box has raised an astounding $125 million in venture funding, it seems that there’s never been a better time to raise capital for a start-up. Although for many aspiring entrepreneurs, the journey still remains a mystery.

I recently had the opportunity to speak with Krish Ramakrishnan, the Co-Founder and Chief Executive at Mountain View, CA based Blue Jean Networks. A self proclaimed serial entrepreneur, Krish has been founder and CEO of several successful start-up ventures. His previous start-up, Topspin Communications, was acquired by Cisco for $250 million in 2005.

Launched in 2009, Krish’s current start-up, Blue Jeans, is a cloud-based video conferencing service. The cloud service focuses on aggregating various consumer video conferencing solutions into a single unified business communications platform. The service allows packet-based (H.323) video conferencing systems from different vendors, including Microsoft, Polycom and Cisco Systems, to communicate with one another through its hosted service.

Needless to say, it’s pretty cool tech, but what I discover during our lengthy conversation was even more interesting than the original topic itself. Blue Jeans has raised $48.5 million in investment from Norwest Venture Partners, New Enterprise Associates, and Accel Partners. The founder described its second round as consisting of a one hour "video conference call" worth $18 million and a third round of $25 million took just one week to get finalized.o During our discussion, Krish shared some of his experiences on how to position a start-up to raise a fortune in funding.

You can think of Krish’s advice as a kind of 13 step program. Although every company is different and many fail before they ever get off the ground, these general guidelines may help you get started.

Business plans – Have a verbal plan that can be easily pitched, but avoid the MBA style business plans. Krish noted that “A business plan you write is obsolete the minute you write it.”

Management Track record – Investors look at previous successes over product vision. Surround yourself with successful people. Success rubs off.

Conviction – An entrepreneur who believes in their technology will more easily succeed. Krish is passionate about his technology. This is obvious from the moment I began speaking with the entrepreneur. If you don’t believe, neither will anyone else.

Practice what you preach – By using his cloud conferencing technology to deliver the initial Blue Jeans presentation, Krish was able to clearly demonstrate its value, without actually “demo-ing” it. The pitch was the demo.

Trend intersection – Focus on the intersection of multiple trends. According to Krish, this is where future opportunities are found. New business opportunities are found in the pain points within the intersection of various intersecting trends. He says to look at trend lines, not headlines. For example BYOD + Cloud + ??? = The next big thing.

What’s in a name? – I asked Krish why the name Blue Jeans for a cloud conferencing company? He said that he believes that the name should be independent from the technology or product offered. Company names that are too descriptive or specific to the initial concept lock you into the product direction and leave little room to adapt. Joe’s Shoe’s, will likely always sell Joes shoes. Unless of course, Joe’s Shoes sells cloud conferencing services.

The Pivot – Be prepared to adapt to the market realities. What you do when you start may not be what you do when you finally get acquired. Start ups must seize the opportunity to adapt at a moment’s notice. Fail fast and be prepared to adapt.

Series A or seed fund raising – For Blue Jeans it was two guys and a PowerPoint. Everything you need to tell should be in a simple and short slide deck. He says to keep it simple and obvious.

Marketing – Focus on creating market share and mind share. Revenue will follow if you have a following.

Positioning – Focus specifically on why and how your product or service is different. If you don’t have competition, you probably don’t have a market to sell into either.

Built for disruption – Focus on how your company will disrupt the current players. For example, software defined networking is disrupting the established networking players like Cisco because it fundamentally changes the economics of networking technology. The result, recently VMWare acquired Nicira for more than a billion dollars, the start-up had almost no revenue, but disrupted many of the largest businesses in its space.

Culture is important – How will you make people want to work with you?

Never Stop Trying - Everyone has ideas. According to Krish, those that ask “What am I going to do next?”, will win. They will win because they tried and failed and eventually tried and succeeded. With 7 billion people on the planet, chances are that many will have your idea. But most cannot execute on the idea. 99% of being a successful entrepreneur is just trying.

Take a look at Krish Ramakrishnan's latest entrepreneurial effort at bluejeans.com