Mastering Investor Pitches, Achieving Product-Market Fit, Startup Success Prepare4VC CEO Jason Kraus

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10X ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne. And today I'm very excited to welcome Jason Krause. Now I'm gonna read his bio to make sure I get it right. Jason Krause is the founder and CEO of Prepare for VC. Now Prepare for VC is a visionary platform dedicated to empowering startup breakthroughs and guiding founders towards success. So we're gonna talk about what some of the things that they do there, some of the common challenges that they've seen and some of the successes that they've seen too. Now, beyond his role at Prepare for VC, Jason is a respected investor, having made impactful investments in over 20 ventures and a diverse range of startups, reflecting his commitment to fostering innovative ideas across various sectors. And we're gonna talk about some of those stories that he has specifically from B2B investments in the early-stage SaaS, tech, and professional services space. Jason is also the acclaimed author of Venture Forward: Lessons from Leaders, which is a book that distills extensive experiences from a range of entrepreneurs into actionable advice for up-and-coming founders. Jason, I'm so excited to welcome you to the show. Thank you.

Great to be here and excited to chat with you and connect with your audience.

Awesome. So that sounds like some really exciting stuff happening there at Prepare for VC. Tell us a little more. What does Prepare for VC do?

Sure. Yeah. So basically my background is a mix of, comes from the venture space as well as the entrepreneurship side. So I had worked in several venture funds, been a part of several angel groups, still actively part of the Boston Harbor Angels and another fund we have called EQX Fund here in the Boston area. And on the investment, on the entrepreneurship side, You know, I'd always really like been starting new things and developed an app called Night Owl in college to find out what was going on around town. And then like developed another fintech venture where I was analyzing the crowdfunding space when equity crowdfunding came out back in 2016.

Uh-huh.

Yeah. So kind of both of those pathways merged, and I wanted to help bridge that gap between what investors were looking for and what founders were pitching and kind of sharing with investors. I met a lot of great startup founders that knew, you know, especially with the investment groups I worked with, that knew exactly how to pitch and, you know, talk to their customers. But Didn't really know where to start when it came from meeting or pitching investors. So that's where I started is, you know, one of my current partners, our COO Steve, jokes that I started as Jason as a service. So yeah, I was just going out and like basically helping founders redo their pitch decks, update their fundraising strategies, and then As we expanded, you know, yeah, I was basically going in as a consultant and as we expanded, we started offering cohort-based and more entrepreneurial education programs with everything from like go-to-market growth, fundraising strategy, expanding what that looked like and then getting into more community and events, hosting different meetups and event groups as well.

That's really interesting. So sort of building on your personal experience, you, Jason, as a service yourself out to other companies, I'm curious, what do you see as sort of the most common thing? So is it that they really know their marketplace and their product, but they don't know how to sort of tell that story to other folks? Or is it that they've got a really powerful product, But they don't know how to bring it to the market? Or is it that maybe they're kind of good at selling it, but they're not good at managing the rest of their finances and operations? What, what, what are some of the, the things that are most common challenges that you see in working with these early-stage entrepreneurs?

Yeah, it's a mix. I think on the storytelling fundraising or the pitch side in general, The hardest part for a lot of founders is trimming it down versus adding more into it. So a lot of founders could talk about their stuff, you know, if you said, here, you know, here's the stage, talk about your company for 30 minutes, they'd have no problem. But if you say, you know, an average investor is gonna like read, spend 3 minutes reading your deck, what do you want to put in that 3 minutes? That's when it gets really difficult. So yeah, a lot of our focus is on figuring out what's most important and what people need to know and what'll get them more excited to ask those follow-up questions and want to start a conversation to learn more.

Yeah, what's the old phrase? I think Mark Twain said, I would have written a shorter letter if I had more time, right? Which is the idea that like to really get at the heart of something, You have to really understand it. And that's one of the things that, you know, when we work on even sort of marketing presentations for our clients, we do what we call like the data dump where let's, let's put everything that you could possibly talk about out on a page or up on a whiteboard. Then let's start to organize it in some way that starts to make sense. Then let's start to cross out the ones that really aren't that impactful. That's what helps you get to the real, the real meat of the story that you're trying to say.

Yeah, no, absolutely. And then, yeah, I'd say the other piece is, and I know we're called Prepare for VC, but we help with other categories. I'd say like most companies come in saying, you know, thinking the solution to everything is more funding. And sometimes it's just, you know, maybe they're, they have the wrong pricing strategy or they have a great product, but there's a different customer group that it would be even better for that they haven't really targeted to. So a lot of it's figuring out like, you know, I think the most common thing that's talked about in the startup world is product market fit. But there's also like, you know, other areas we tackle, you know, the product team fit. Are you the right people and team that are experts in this industry or do you need to bring in other experts that can help you meet the right people. There's the kind of founder-founder fit. Like, are you, you know, if you can talk about your product and your company, can you also talk about yourself and bring your story? And that piece can be uncomfortable for some founders too, even if they have a great story to tell, like getting over that barrier of this is, you know, there's a reason why I'm doing this, I'm really passionate about it, and I need to share that with other people to get them as excited about it too.

Yeah.

So yeah, trying to tackle all those other angles and, you know, go beyond. Sometimes fundraising is the answer. Sometimes it's just getting the right co-founder or team member or advisor on board that can help you reach a better channel partner and You know, bootstrap even further before you fundraise.

So that product market fit topic that you talked about, which gets a lot of attention, it's so interesting. And I'm sure you've got some stories around how companies have, you know, thought that they had identified the right market and they had sort of crafted a messaging strategy to go after a particular ideal customer profile or a particular buyer persona, but then they either pivoted the product for the same audience or they pivoted the audience for the same product. Talk to us a little bit about how companies can know they've got the right product market fit, like that they've really gotten down to the right niche or that they've really refined the most powerful value propositions from their product and match that up well, or ways that you've seen them, you know, kind of pivot, whether it's pivoting from the product side or pivoting from the go-to-market side. Talk to us a little bit about that.

Yeah, I think I'll start with a kind of bigger example from, and we share this with our cohorts and our programs too. Like the story behind Instagram, I think is really interesting because they started with a lot of features. It was similar to like a Foursquare type app. It was for finding like local restaurants and bars and—

Sharing photos.

Yeah. And then the— they figured out like the feature people cared about and liked the most was the filters. So they built the whole app around photo sharing with filters. And then I think that resonates with a lot of other startups that are thinking about like, well, I need every single feature in my first app and People won't use it if it doesn't have this, but like, there's gonna be one thing that they recognize and remember when they use your app. So, or whatever your company does, you know, there's something specific and you don't need to do everything for everyone. You just need to find what you're doing for your target audience and find the right target audience for what you built.

That's interesting. Do you find that that's More common, the mistake that companies make when they don't have that good fit is that they're trying to put too much into it. It's more feature bloat that's not really focused on the real value prop or what's the most common kind of mistake there?

Yeah, a lot of times, I mean, there's limited resources, whether that's time or money going into it. And so, you know, how are you gonna spend that most effectively? And I think if you figure out, and that's why, you know, customer validation is so important. If you're out there talking to your customers early on and, you know, get to really know, like, you have assumptions going in what the problems are and why you're building it. But if you get to know what their problems really are and, you know, what they're willing to use and then what they're willing to pay for. That helps you spend your time building the things that are going to be most effective. And I think that's another piece is a lot of times like the MVP or minimal viable product is kind of grouped into one category, but it's also somewhat You know, there's some stages in there where there's something, you know, people will use or try out. There's something, you know, they'd use to replace what they're currently doing, and that there's things that they'd be willing to pay for or just use if it was free. And kind of see, you know, how deep you can go. Your ultimate goal is, for most companies, is, you know, what you want it to build something people will pay for, use, and then also tell their like friends and family and colleagues and spread the word for you so you don't have to do all the marketing yourself.

Yeah, that's so, I know you've worked with a lot of different companies. Is there a fun success story you can share of either companies that have, you know, scaled, you know, past the initial sort of user base to, you know, sort of broader success?

Yeah, sure. I'll start with one called Xena Intelligence. They went through our Breakthrough program and yeah, that's our cohort program and basically started out, it's an AI platform for managing ad spend. So they were, you know, they plug into Amazon and Walmart and different marketplaces and basically reduce the spend, increase ROI on it by like optimizing for different timings and keywords. But yeah, when they were going in, it was a lot more manual. So they kind of started out with more of that service model, figured out how they could get customers directly that were struggling to sell on different platforms and get the right amount of data that they could then train the systems to kind of automate that whole process for them. So I think their, yeah, their biggest jumps were in that really painting that long-term story of You know, this is what we've proven it out by, you know, creating a service-based business. But we know there's a big, a big opportunity here. And, you know, people are willing. We've already talked. We've, we know our customers. Maybe it's 10 people right now at that time. And, you know, but they knew their needs in and out and that if they built something their customers and new customers would come in. So, you know, a lot of the work was around that storytelling of what that would look like with the funding for a larger platform. They raised a few rounds. Yeah, you know, pre-seed, seed, and then kicked off a larger Series A. And, you know, all of now they have a lot more data to show from their customers and users and all the growth rates. So it gets easier later on, but, you know, kind of painting, it's a lot more of getting people behind that vision early on, especially in those pre-seed and seed rounds.

So that brings to a really sort of interesting inflection point, you know, as companies go from, you know, a few people It's easier for, you know, them to all agree and to, you know, be sort of aligned on we're all going in this direction. Whereas as they get bigger, sometimes there's multiple good ideas and you can kind of only have the resources to do one or two of them and you might disagree on which are the right one or two. Are there systems that you've seen companies use that sort of create, you know, Better collaboration, better alignment, better focus on those right things?

Yeah, I think, I mean, even if we're talking like the investment world, like even every single, well, different venture funds have different ways of doing that too, like deciding who's the next deal to go into.

Yeah.

So, you know, like one of the, yeah, the funds I'm involved in, EQX Fund, like we have, there's myself and another partner, Ziad, that we both have to agree to go into a deal. So if one of us doesn't want to go in, we don't go into it. There's other funds where, you know, even if they have 5 partners or something like each partner is, you know, has whatever, yeah, a 5th of the companies they're going to bring in as their partner deals to the fund, and they're more independently deciding. Other ones, yeah, like it's more of a voting, you know, kind of majority system. So on the investment side, there's definitely different ways people have found effective that works well with kind of the team and the personalities in there. On the like entrepreneurship side, I'd say, you know, yeah, it's also giving enough. One of those, we always talk a lot about kind of the culture you want to have, especially, you know, a lot of the startups we work with have a handful of people on the team at the moment and they know they're gonna scale pretty quickly beyond that. So, you know, thinking of that culture early on, like, do you want ping pong tables in the office? Do you even want to have an office, or is everything remote now? And, you know, is it— and one, the one thing people seem to agree on when we say, but it doesn't always translate this way in real life, is we ask, you know, do you want all the ideas coming top-down, or do you want, you know, anybody in the company to feel comfortable sharing ideas? Everybody always agrees that they want people to feel comfortable sharing, and it can come from anybody in the business, but it's how you actually go in and implement that and kind of make that a, you know, safe space where— But also, you know, like you mentioned, there is a balance where if you're working on too many ideas and everybody's doing something different, you're not gonna get as much of the focus tasks done. So finding ways to, yeah, kind of come together, make sure, you know, everybody's aligned on the big vision. And if you're operating, you know, different tasks and projects, they're all still aligned on what the company's goal overall is gonna be.

That's right. Yeah. One of the ways that we've seen to be really successful to kind of create that alignment is by really breaking down silos. And so we work with a lot of like marketing teams that might have some conflict with the sales team, that might have some conflict with the CS team because marketing is bringing in leads that sales says never closes and sales is making promises to prospects that CS says, well, we could never renew that because we can't deliver on it. So what we've seen work is to create like a shared scorecard that all the members of all 3 teams have some accountability into and some, you know, sort of skin in the game. It might be weighted differently for different members of the different teams. So marketing gets, you know, more of their score coming from the quality and the volume of leads. CS gets more of their score from the you know, sort of size or speed of renewals or referrals that are coming in. But by balancing sort of these overall company objectives, which is growing revenue, growing consistent repeatable revenue, each of the teams has that sort of opportunity to collaborate and really work together instead of sort of building these silos where they're all sort of finger-pointing at each other.

Right. No, I think that's perfect. And then, yeah, even when you're talking about, you know, like the metrics you're tracking internally, some, you know, a lot of companies do a great job and they know exactly what works. Others, you know, I think you're, if the things you're tracking aren't aligned with the goals, that can be a big— Kind of issue as well. Like, you know, if we give a basic example of, say, you're, you know, you're focused on the brand awareness. Does that mean, you know, is it better to have 20,000 followers on a platform or better to have 100 people per post engaging with you? And, you know, one isn't necessarily better. Depends on the business and the objectives of that. That's right.

Well, and it's sort of creating that alignment. That's the job of the leadership and the entrepreneurs, right? One of the things that we always see too is having those clear KPIs and metrics is really a key to sort of like diffusing some of that sort of animosity that can exist between teams. Because if you build a system that's designed to deliver a specific output, then everyone can collaborate together on the system. I actually heard someone that was actually on the show the other day. They were like, you know, it's the idea of it's not that you broke the pot, it's that the pot is broken. So like, if the system doesn't deliver the metrics that you wanted or at the level that you wanted those KPIs, then people can come together to work on how do we fix it instead of sort of finger pointing at, well, you didn't deliver what you said you were gonna deliver. It's instead the system didn't deliver what we wanted. And so then we can all collaborate on how to make that system better.

Right.

Yeah. So what's something on the horizon for you that you're really excited about for Prepare for VC?

Yeah. So a couple of things coming up. So yeah, we've done 7 cohorts of our Breakthrough program and we're heading in. Yeah, we still have a few weeks of applications left for our 8th program, and then that's gonna start around the middle to end of June, or sorry, July. And yeah, so that's, you know, that's a 12-week program. We take up to 10 startups in a cohort and have sessions. You know, our team leads a lot of sessions. We bring in other mentors and experts throughout the program. We do mentor matching and investor matching events. And then it's mostly virtual. And then the last week we bring everybody in person to the Boston area and do a big pitch and demo day event at the end. And yeah, and then outside of that, we also, we're running the local regional championship for the Startup World Cup in Boston.

And awesome.

So yeah, that's a big pitch competition. And then the winners of that move on to pitch in Silicon Valley for, it's a million-dollar prize pool. So yeah, we're excited to host that with our Boston New Technology community.

Wow, you've got a lot of really good stuff going on. I'm sure some of our audience is out there thinking like, wow, I kind of want to get involved with this. Give us the pitch, like what, like why should companies sort of approach you and why should they work with prepare for VC?

Sure. Yeah, I think our biggest, you know, if you're looking at the programming side, I think our biggest differentiator is we spend a lot of time, you know, we cover all the traditional startup strategies, but we also spend a lot of time on the people component. So talk about different personas and if you're We've developed 3 core personas that if you're pitching investors, for example, not every investor meeting is the same and not every investor is the same. So if you can identify, you know, some tricks and tactics that we go over, how you can have better conversations and meetings with specific investors that fall into, you know, more of Let's say, you know, I'll give a quick, you know, the ones that say yes to too many things and narrow it down and the ones that say no to everything unless they're super excited and then say yes. And there's a completely different approach between those 2.

Interesting.

So yeah, a lot of time on the people side and the negotiation tactics in there. And then yeah, our team, you know, one of the feedback we always get from founders we work with is that our team's always accessible to the startups, and we have plenty of office hours and spend a lot of extra one-on-one time outside of programs, just, you know, helping and supporting. And the thing I really get excited about is whenever we see those success stories from startups we worked with, you know, Even there's one company I consulted with like several years ago called Canela Media that they're basically an entertainment platform for a Spanish-speaking audience in the US. And, you know, I go into hotels now and see them on smart TVs and get excited that like, hey, you know, they really made it, they're out there and Yeah, we get to see all their progress and growth around, you know, around us. So that's something I'm excited to see in all the other startups we work with.

That's awesome. So if any of our listeners out there are interested in getting involved, how do they get in touch with you?

Sure. Yeah, through either through our website, prepare4vc.com, and we have quick, like, onboarding survey on the homepage that helps us figure out, like, what programs or offerings we should recommend in the follow-up conversation, or they can reach out directly to support@prepareforvc.com. Also happy to connect with anybody on LinkedIn as well.

Awesome. Well, Jason, I know the audience has gotten a lot out of your stories and certainly some inspiration. So they can see themselves on TV in hotel when they are traveling around. But thank you so much for the time today and sharing your insights.

Thank you. This was great.

All right. Talk to you soon. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, Like on your favorite platform and share to others who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.

Thank you.