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Skip Sanzeri Linked in Information

Skip Sanzeri is a Silicon Valley entrepreneur who has helped a variety of startups launch, grow and exit. In addition he has funded and launched a few of his own companies. Skip started his entrepreneurial career at an early age buying a Gold’s Gym in the San Francisco Bay Area. Throughout his career, Skip has helped other startups, launch, grow and exit. He then expanded to a total of 6 clubs and converted the brand to California Athletic Clubs before exiting via a sale of the franchise to 24 hour fitness. He then helped grow the IAC division of Ziff-Davis publishing to $250 million, after which it was sold to Thomson Publishing.

Skip Sanzeri continued his entrepreneurial career with Sequoia Capital – backed Quote.com which was acquired by Lycos. Skip then founded and funded the first open source strategy firm – Open Source Group.  Skip earned his bachelor’s degree from Claremont McKenna College, and then followed on with a Master’s in Public Administration from the college of Notre Dame. He lives in Silicon Valley and is a native of San Francisco. In his spare time Skip enjoys baseball, yoga and studying quantum physics.

https://www.linkedin.com/in/sanzeri/

Skip Sanzeri has an entrepreneur since 1996 beginning with Quote.com (backed by Sequoia).

Skip Sanzeri Founded Myfamli – the world’s first comprehensive family information and preservation system –
myfamli.com

Founded AlerSense – The World’s First Smart Allergy, Asthma and COPD Air Quality Alert System.

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Exits:
Took MyDx, Inc. public
Merged InRange Technologies with CNT – Computer Network Technology Corp.
Merged Open Source Group with Olliance
Quote.com sold to Lycos
IAC (Ziff Davis Division) sold to Thompson Educational Publishing
Converted Gold’s Gyms to California Athletic Clubs and sold the chain to 24 Hour Fitness

Strategic Capabilities

CEO, Leadership all company functions
Investor Relations, PR and Marketing
Angel, Venture and Private Equity Funding Strategies
IPO/Reverse Merge Experience
Crowdfunding Expertise
Social Media Strategy
User Acquisition
Company Branding
Go To Market Strategies
Marketing Budget and Planning
Financial Modeling

Currently funding 6 different pre-IPO companies via private equity.
I have run projects and campaigns with over 100 different clients.
Company structure – legal, organizational, and information technology
Business models – Skip is an expert in determining viable business models including user acquisition, customer acquisition and revenue streams

Skip Sanzeri’s Past Companies:
MyDx
Ziff Davis
Lycos (via Quote.com purchase)
Gold’s Gym Franchises
Open Source Group, Inc.
Baytech Web Design
The Yerby Company
Cotelligent, Inc.
Inrange Technologies (bought by Brocade)

Recent Articles by Skip Sanzeri

Skip Sanzeri
Skip Sanzeri, Founder and CEO at AlerSense, Inc. (2015-present)

Generally angel investing and debt are not the same. However, debt is becoming more popular these days for companies and I have seen a little more “venture debt” happening. This is simply an early stage loan, versus equity.

Most angels will invest for percentage of equity in your company. There is a middle ground which are called convertible notes (debt), wherein you place a limit on the company valuation (Cap) and investors loan money that can be converted to equity, or will eventually need to be paid off as a loan if it is not converted.

I would not advise early-stage companies to take on straight debt if they are not cash flow positive. Debt service can become a killer to early-stage companies, that are not even post-revenue.

Convertible notes are fine as the full intent is that they will convert into equity, not be paid off as debt.

***

Skip Sanzeri – This was recently posted on Quora  – regarding a question about Whether or not it’s a good idea to contact venture capitalists when you have no prior relationship. You’ll see below that “cold emailing” or cold contact is really not the best way to go.

In answering your question about emailing or calling cold into VC firms, I would say practically, it is not the most optimum approach. It’s not to say that you couldn’t play the numbers game and reach out to 100 analysts or associates at VC firms, but your response would most likely be very slim.

You’re better off using something like LinkedIn and finding someone you know who can make an introduction for you to the right firm.In my experience, generally VC firms require a warm referral. Most venture firms see so many plans per week, that the companies which come to them through referrals will get a stronger look.

Be sure to study the firm first, then look for a partner or associate at the firm who has an interest in your space. I’ve also found that VC firms change focus direction from time to time. So if a given firm was interested in cloud-based technologies earlier, they may now have switched to AI etc. sometimes their portfolio will fill up with a certain type of company in a certain industry and therefore they will no longer look for similar companies.

Sometimes entrepreneurs make a rookie mistake by contacting a VC firm through a referral, without having done the initial research to understand if the firm is currently looking for companies like theirs to add to their portfolio.

So you want to go to the site, review their philosophy and their portfolio companies, look for some matches, then find the partner who is handling your area and who is most qualified to discuss your company with you. Then, find someone on LinkedIn who can make an introduction for you, (or use another network) and go from there.

Lastly be sure to watch out for competition. I’d say it in about 25% of the pitches I’ve made to VC they could not move forward due to the fact that they had an investment in a competitive company. I don’t believe that you should necessarily avoid a VC firm that has a company that could be competition, but if the other company they invested in is a straight up competitor, you might be wasting your time.

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What does Crowdfunding have in common with ‘Cats’?

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Skip Sanzeri on Retail Trends

Skip Sanzeri’s Rants and Raves

Hi Everyone – from Skip Sanzeri  –  here’s a good article on retail and how some are creating new strategies…

https://finance.yahoo.com/news/retail-apocalypse-causing-one-company-101500152.html

It didn’t take long for The Hershey Company to mention its push into e-commerce on Wednesday’s earnings call.

In prepared remarks at the beginning of the conference call, president and CEO Michele Buck listed online retail as a major focus and potential growth area for the company. She discussed collaboration with brick-and-mortar retailers as well as efforts to better accommodate the needs of online shoppers.

Her comments did not fall on deaf ears.

Credit Suisse analyst Robert Moskow circled back to them during the question-and-answer portion of the call, asking about what he interpreted as a “change of tone regarding the sense of urgency to get bigger in e-commerce.” He said that in his discussions with investors he had noticed concern over the dwindling number of cash registers — the epicenter of the confectionary impulse purchases so crucial to Hershey sales.

“I think it is fair to say that we are dialing up,” replied Buck, who also stressed that Hershey’s impulse and take-home business showed “pretty strong performance” during the period.

The CEO went on to discuss how Hershey’s was reinvesting additional resources in the e-commerce initiative and partnering with customers. She said there was major interest among the company’s brick-and-mortar partners to expand online offerings.

The exchange echoed many others occurring all over the retail industry as cash-rich and acquisition-happy online conglomerates like Amazon disrupt the landscape. Companies are scrambling to stay competitive as consumers increasingly shop online.

Hershey’s efforts also show that it’s not just traditional brick-and-mortar shops that are compelled to adjust. The sweeping changes are affecting companies across the retail pipeline, from suppliers to those that provide back-end services.

For a recent example of how quickly a retailer’s fortune can change, look no further than Blue Apron, the meal-prep delivery service that recently went public. Mere weeks before Blue Apron’s initial public offering was supposed to price, Amazon bought Whole Foods for a whopping $13.7 billion.

It was terrible timing for Blue Apron. Many potential investors quickly identified the possibility of more competition in the food-delivery industry and ran the other way. As a result, Blue Apron took a cleaver to its IPO range, cutting it to $10 to $11 a share, down from $15 to $17. The company ultimately priced at $10 a share — 40% below the maximum it had sought.

Blue Apron has since been on the receiving end of even more bad news, with its stock closing 32% below its IPO price on Wednesday.

At this point, there’s no way around it: The company got “Amazon’d” — the Business Insider-coined term used to describe when a company’s entire existence gets rocked by the Jeff Bezos-led tech titan.

The growing juggernaut remains a specter that still looms over just about everyone, and it’s clearly affecting corporate behavior across the market.

In the meantime, Hershey’s remains confident about its push into online retail, and says its in-store sales are holding up just fine.

“We have been able to win in-store even as e-commerce has accelerated,” the company’s president, Todd Tillemans, told Business Insider. “Right now, we’re focused on partnering with retailers and investing in capabilities to unlock growth for our brands online. I believe we are in a really good position to win in an omnichannel world.”

What does Crowdfunding have in common with ‘Cats’?

 

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Most entrepreneurs I speak with do not really realize what it takes to run a successful crowdfunding campaign. This article is about rewards based Crowdfunding, really one of the more difficult Crowdfunding types to run (versus equity, cause, or debt based Crowdfunding).

80/20

At a high level, Crowdfunding, like developing and putting on a play such as ‘Cats’, requires 80% preparation and 20% execution. If you think of what it takes to develop and launch a Broadway show, there is an immense amount of preparation including developing the entire play, sets, musical scores, months of rehearsal, and then a launch or opening. Actors, musicians and other crew may rehearse 10 or 12 hours per day for months to get ready, and then execute the play each day or night.

Crowdfunding, done correctly, has similar 80/20 ratios (although much shorter in duration than a Broadway play). A successful crowdfunding campaign will have 30 days of planning, 45 days of outreach, and then about 35 days of actual Crowdfunding. Planning is key as all outreach, content development, strategies, and goals need to be set prior to any execution. Next, a solid crowdfunding campaign will have up to 45 days of outreach to constituents including building audiences on social media, connecting on email, talking with friends and family, and other partner outreach. Media outreach is essential as well letting the press know about your upcoming campaign. If you look at the most successful campaigns, you’ll find that there was a lot of outreach to the media and they secured articles with online publications, print media, and even interviews on TV and radio.

The Crowdfunding Platform is only the Venue (Theatre)

Most people I speak with have the false belief that there are thousands of people trolling Kickstarter and Indiegogo for interesting campaigns in which to invest. While there are some people that spend time looking through various companies and products… like a Broadway play, if you want people to buy tickets and attend, you need to reach out well before opening night with a ton of marketing to make sure that you fill the seats. You need to generate your own audience to attend your crowdfunding production.

Think about it. If you were going to develop and launch a Broadway play, would you spend years of time developing and preparing the play, months and months of rehearsal, hundreds of thousands of dollars to build sets, and then simply open the play at a given venue?

Of course not. You would make sure that you reached out to all of the important media, sites, and people to ensure they would attend your play. You would like to see pre-purchased tickets that would fill the venue for a year or more. This would give you confidence that on opening night and through the next year, you would have enough audience to support your efforts.

There Is No Audience Unless It’s Your Audience

Crowdfunding is very similar in that the platform (like Kickstarter) should be considered an empty venue where you will bring your own audience to attend your crowdfunding campaign. This is critical to know. Many crowdfunding sites want you to believe that they have tons of people looking for companies or products just like yours in which to invest. However most crowdfunding campaigns fail because they don’t know that they need to fill all of the ‘seats’ with people they bring to the venue via a ton of outreach prior to opening night. I see so many crowdfunding campaigns that raise zero, or very little, because the companies or individuals did not build their audiences prior to launch.

Broadway Critics Can Be Brutal – Crowdfunding Is Unforgiving

And since most rewards based Crowdfunding campaigns run about 35 days on average (best practices), once the campaign launches, it’s too late to make adjustments. And worst of all, like a Broadway play, you have one launch to get it right. On Broadway, if the critics tear up your play, it may be hard to recover. In crowdfunding, it’s nearly impossible to launch another campaign and make it a success if the first one failed.

Here’s what to do:

  1. Assess all of your lists and contacts before considering Crowdfunding. If you don’t have a lot of social media followers, or large email lists, you may have to acquire these in order to have a successful crowdfunding outcome. You may want to consider running Facebook ads in order to get people interested in your product or service while letting them know you launch a crowdfunding campaign soon.
  2. Study crowdfunding campaigns and look at the strategies they used. You can reverse engineer nearly any crowdfunding campaign by simply looking at all of the steps they took, the types of rewards they listed, the communications they executed and the press they achieved. If you believe that you can come close to hitting the types of communication numbers of a successful crowdfunding campaign, then you at least have an opportunity for success.
  3. Once you believe that you have a chance at crowdfunding success, put a plan together and outline all of your strategies, rewards, timing and communication first. Once you have a plan in place, then you can begin execution.
  4. 45 to 60 days prior to launch, you need to begin outreach to all of your constituents, and let them know that you are planning a crowdfunding campaign that will launch on a certain date. Note that you will need your website up and running so that people have a place to refer back to after they receive your note. Additionally, you want to contact all of the media who could be interested in writing about, are interviewing you on your product or company. You want as much press as possible prior to crowdfunding launch.
  5. If you executed the above, you might have a few thousand two even 10,000 followers, fans, friends and likes, ready to support your crowdfunding launch. You just filled your theater for your upcoming production. Congratulations. (note this article is high -level  – there are dozens of sub-tasks that need to be executed as well for a successful campaign).

Running a successful crowdfunding campaign, like a theater play, is not for the faint of heart. Do your homework, planning, preparation and massive outreach prior to launch. Then, if your product, service or company is interesting, your audience will show up and you should achieve crowdfunding success.

Our Client List (Partial)

Following is a partial list of companies whom we have worked with or operated:

  • Intel
  • Wells Fargo
  • Hewlett Packard
  • Lycos
  • Quote.com
  • Gold’s Gyms
  • Whole Spice
  • Oro Latina
  • Seyet, Llc
  • E2 Automotive
  • NICULac
  • FDCPA Vision
  • Debt Restructure Co.
  • Jatropha Partners
  • Vampire Freaks
  • World Mentor
  • Your Surround
  • ACSI
  • AIRO
  • Appraisel Guardian
  • California Athletic Clubs
  • Cotelligent
  • Asante Real Estate
  • Bargain Crowd
  • Baytech Web Design
  • M3i Works
  • Cidology
  • CopaCast
  • Crosspoint Ventures
  • CVLynk
  • Diamond Rubber Products
  • DocuHome
  • Ecostructure
  • Ekinix
  • Ergo Direct
  • Road Angels
  • Erwan Davon Teachings
  • Eurotech
  • Evolve Health Clubs
  • Firebreathing Dog
  • Flaunt My Pet
  • Health and Harmony, Inc.
  • Hi Def
  • HoodBook
  • San Mateo Roofing
  • Inix
  • Jamzuki
  • Hyper Apparel USA
  • Renunion Health Products
  • Global Potential, Inc.
  • KiwiTech
  • Kleintech
  • Gut Sense, Inc
  • Le Petite Chefs
  • Prepaid Legal
  • NUskin International
  • Lifespring Health
  • Livengood Products
  • Ideas, Media
  • Sprizzi
  • Mystic Medicine
  • Medicann
  • PINDx
  • Evolutionis Partners
  • Bond Underwriters
  • NC Review
  • Nettrav
  • Northpoint Financial
  • Omni Chemists
  • Ipayone
  • Open Country
  • Leaping Antelope Productions
  • Sports Association for Youth
  • Securify
  • Sevarus
  • Seyet
  • SMS Media Group
  • Sofmen
  • Software Motor
  • SonicJam
  • Sweet Marrakesh
  • Tap Drive
  • Tracker Systems
  • Trellon
  • Unified Markets

IPO/Public Company Basics

So you are thinking about an IPO for your company?

Well certainly don’t take this lightly as it is a major decision for your company. I call this a “fundamental” decision since it encompasses a path that should take a lot of thinking before executing, and also it’s difficult to turn back once it started.

IPO Pitfalls

What to think about if you are considering an IPO, reverse merger, reverse triangular merger, or reverse takeover:

1. Advisers – Seek out proven, trusted advisers who can help you with this process. Taking a company public is not for the faint of heart, and the amount of resources necessary to get it done should demand that you get the best advice possible. This includes financial, legal, accounting/audit, business, and more. For the companies that we’ve taken public, we’ve always sought out the best possible advisers.

2. Size/state of your company – There are reasons to have a public company and their reasons that you should not take your company public. For larger companies, that have valuations over $100 million, you can look towards some of the large investment banks such as Goldman Sachs or Morgan Stanley. They will give you an assessment as to whether or not you should go public and if they can help. For smaller companies, it’s more difficult as sometimes the decisions aren’t as clear. For instance, you may have a reason to go public that includes the fact that you want to use public markets to bring in capital. Or you may want to use equity to buy another company.

3. Going public costs money – yes, it takes money to make money. Even for a small cap company to go public you should probably have at least $100,000 set aside to cover legal, accounting, and other advisory expenses. In some cases if you have an interesting offering, some of your service providers will take equity in lieu of cash. This will keep your cash burn down. Either way, you have to have enough money to get through the process which can take anywhere from four months to one year, and cost anywhere from $100,000 up to $1 million.

4. Reverse merge or IPO? For smaller companies wanting to fall forward on public markets, you will need to make a decision as to whether or not you go public via a reverse merger (also called a reverse takeover or triangular merger) or to conduct a standard IPO. Reverse merge will require that you find a public vehicle, either in operating company, or a non-operating company that already has a ticker symbol. Make make no mistake, this is a very dangerous area and I would highly advise that you gain significant counsel when looking at buying a company that is already public. Many of these companies are wrought with financial landmines and legal traps that not only could have you losing all of your money, but also you may owe money that you didn’t even know about. Again, find an expert who can help you.

5. What are the steps to going public? Since we are largely talking about the more difficult small cap companies (if you call Goldman Sachs or Morgan Stanley they will take care of most of it for you), here is a list of items to think about:

  • Make your initial decision – IPO or Reverse merger?
  • If a reverse merger, locate a shell company and secure it
  • With either of the above, hire legal counsel and merge your company into the shell, or have an attorney file you S-1 with the securities and exchange commission. If you reverse merge you may have to file a super 8K with the Securities and Exchange Commission as well.
  • Find someone to help you market the company such as an investor relations firm or small cap IPO expert who can help you understand what the markets will do with your stock.
  • Be aware that once your stock is public, and there is liquid stock available, any number of people in the market can start buying and selling it. You will have no control over this. So it is important that you have a very strong strategic direction to ensure that your company is successful while your shares are being traded.
  • Again seek out expertise to make sure that your stock doesn’t get decimated by somebody buying large chunks and dumping them.

Here are some successful small-cap reverse merge companies that we’ve worked on:

Software Toolworks:
– Initial reverse $0.01 per share
– 908,000,000 shares outstanding
– Raised $2,000,000 plus warrants
– Reverse Split 150:1 when the stock was at $0.04 to get to $6.00
– Split 2:1 when the stock was $22.00 (after $100 million raised at $17.00)
– Sold for $462 million, (all cash) April 1994.
Intermix (Myspace)
– Raised $7 million at $1.00 plus warrants
– $10 million pre-money April 1999
– Sold for $580 million, (all cash) to Rupert Murdoch, September 2005.
Interclick
– Capital raise at $1.00 per share plus warrants
– $10 million pre-money April 1999
– Sold to Yahoo at $9.00 per share (all cash) November 2011.
Propell
– Raised $600,000 at $0.01 in April 2012
– Stock now at $0.17.
Zagg
– Raised $3 million plus warrants at $10 million valuation, August 2007
– Currently trades at $175 million market cap.
Akeena Solar
– Raised $6 million at $20 million market cap, May 2007
– Traded at $400 million market cap, Jan. 2008
– Currently trades at $4 million market cap.