I look forward to getting on the phone, having lots of coffee with some of you, or randomly meeting you in the hallways of day-time startup events.
For those of you who are just getting into the spirit of fundraising for the first time, it is a good idea to reach out through your networks to accredited investors and get referred into various angel groups in the PNW. If you’re not sure where to start, reach out to me. I’ve spoken with a lot of entrepreneurs to help navigate the investor ecosystem and I do occasionally refer companies to other players (VC’s and Angels) and they refer companies for SWAN Venture Fund. I prefer to refer companies in a way that doesn’t bruise the ego of the entrepreneur too much and doesn’t obligate a VC into a phone call they don’t have time for: I will typically have a call or coffee with VC’s and go over a list of companies I’m looking at. If they state interest in a company, I send over contact information and they reach out directly. They do the same for me.
A knowledge gap that is a source of great frustration for entrepreneurs and investors is knowing which market you can sell equity in; entrepreneurs just won’t know until they talk with a few investors and ask for advice:
- If you’re raising angel money, don’t use VC numbers/terms for valuation and fundraising; it will chill interest quickly. VC’s and angels use the same language but have different economic expectations and different risk tolerance levels. Google the “halo report” for valuation metrics.
- If you’re raising from VC’s and you’ve managed to get a meeting or conversation, get a sense for what metrics they are looking for first before you get into the pitch. This conversation is better spent with an associate. Sometimes you can tell from their investment behavior – check out Crunchbase for that. Don’t assume, but you can get clues from any press you find. Get on their radar “early”; everyone likes to be in the conversation early.
- Don’t lose focus from your customers, your product, your market, your business, your team. Fundraising is important, but should not be all encompassing.
There is a lot going on. Stay focused. Build something that changes the world for your customers, for the better. Stay caffeinated this fall!