How not to describe yourself if you want to get funded
We are the Uber of our industry, applying curated, user-generated gamification to the sharing economy.
That’s pretty much it. That’s the sentence you’d craft if you’re looking to turn off venture and angel investors with a mission statement containing buzzwords that are losing popularity or were never compelling in the first place.
Using CrunchBase data, I queried startup buzzwords that were in wide use over the past few years, to see which have passed their peaks. The dataset includes words used in the descriptions of companies that have raised seed or venture funding in the past three years.
Here’s the list of what to avoid:
Sharing economy: Describing yourself as a sharing economy company constitutes a poor strategy for raising funding. That was true in 2014, when just six companies with that self-applied label raised seed or venture rounds. It was even more true in 2015, which saw three fundings, and this year, with two.
Curated: We are awash in data, and everyone could use a guide to help find the best and most relevant information. That may be why there were 58 companies funded last year that described themselves with the term curated. Startups providing curated platforms for music, games, handcrafted goods, matchmaking, fashion and art, to name a few, have all raised seed or angel funding in the past three years. But it appears the term is falling out of favor from overuse. So far this year, just 19 companies with “curated” in their business model descriptions raised funding.
“Uber of”: Go to a startup pitching event, and you’ll likely hear founders describe their startups as the Uber of their respective industry. There’s been an Uber of laundry, medical marijuana, liquor, lawn care and massages, to name a few. But while Uber has done a fabulous job attracting billions from investors, the “Uber of” startups have not. About 25 raised capital in the past three years, including seven this year. Overall, calling yourself the Uber of something seems to work better for non-U.S. startups, which accounted for six of the seven companies securing funding this year.
Gamification: Gamification became a buzzword in startup circles a few years ago, but it has not shown lasting popularity among investors. Just three companies with “gamification” in their descriptions have raised capital this year, while a total of 23 brought in funding over the past three years. This may less related to investor appetites than for the term “gamification” itself, a five syllable word that doesn’t exactly roll off the tongue.
User-generated: Facebook soared to a $360 billion valuation by getting the world addicted to user-generated content. But if you’re hoping to get funded with a business model focused on user-generated content, you’re probably out of luck. So far this year, just two companies describing themselves as using some form of user-generated content raised funding, with just 11 bringing in capital over the past three years.
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