Published: 12/20/2006 11:21:35 AM, comments: 0
Recently I came across a new resource for emerging companies in the Waltham, MA: The Emerging Enterprise Center.
Created by Foley Hoag, LLC, a prominent local law firm, and headed
by David Broadwin, Partner and member of the firm’s Executive
Committee, the center opened for business earlier this year in
September, is located in the heart of the Route 128 corridor and aims
to provide emerging company entrepreneurs with many of the resources
they need to help launch their fledgling companies. Foley Hoag is very
active in the start-up community there and has 240 attorneys between
their Boston, Waltham and Washington DC offices.
The center has an ambitious agenda: in addition to providing a full
complement of legal services as you’d expect from a law firm, the EEC
hosts networking events between entrepreneurs, VCs, angels and other
venture & technology industry participants. There is already a
significant schedule of thought-provoking technology-oriented seminars
with well-known speakers, and various resources for entrepreneurs to
use to assist them in accelerating their start-up companies.
For more information, check out the EEC online at http://www.emergingenterprisecenter.com/home.aspx
Published: 12/19/2006 9:57:50 AM, comments: 0
(Previous post - #3 in a series)
#4: Keep getting turned down? Ask
Some investors will tell you why they aren’t going to write you a check.
Others won’t tell you. Still others will say “No for now,” and let you know what
milestone(s) you need to accomplish for them to invest.
But you won’t know unless you ask.
Many entrepreneurs are so focused on their idea that they miss something.
Perhaps it’s your your pricing assumptions, or your presentation skills, or an
unimpressive team. There are many reasons why investors don’t get interested
enough to write the check.
When you do ask why they aren’t investing, tread softly when replying to them
and don’t get defensive. Above all, don’t argue with them about how they’re
wrong. Take it as valuable feedback from one perspective. Also, many investors
will say no to you, but that doesn’t mean it is no forever. Ask them if they
would like to keep track of your progress with a monthly or quarterly email from
you. You’ll be surprised at the interest that comes your way as you continue to
achieve your milestones.
Remember, you don’t ask, you don’t get…
Published: 12/17/2006 11:45:21 AM, comments: 0
(Previous post - #2 in a series)
# 3: Be realistic with how long it takes to raise
If you don’t have a personal introduction to a Venture Capital firm or angel
group, then understand you won’t get a lot of phone calls immediately. Don’t
leave funding to the last minute.
I’ve heard more than one complaint from entrepreneurs about how long it takes
to get through the funding process. One of the reasons for this is that it
typically is a consensus-based process and this takes time. Usually, the larger
the number of individuals involved, the longer it takes. Investors in risky
ventures like to take time evaluating the company, the management and the market
space. They prefer to contact a variety of experts or other people whose opinion
they value. They will keep re-visiting the opportunity until it feels right
to them to write a check.
In my experience, entrepreneurs need to budget 4 - 6 months from beginning of
the funding search process to receiving money in the bank account. If any of
that time period falls during August or the end of year holiday season, add
another 1 to 2 months to your time estimate, since investors take vacations or
are otherwise unable to contact their network during that time.
It also helps to have a backup plan in case funding does not materialize.
Investors can smell desperation and they generally don’t like the smell, so be
prepared to patiently wait until the timing is right. Keeping investors who have
said “No for now” informed of your company’s progress is a great way to keep the
‘pilot light’ on and shows your determination and understanding of the
Published: 12/15/2006 5:31:59 PM, comments: 0
I recently came across an interesting investment group, Investors Circle . This group is essentially a deal flow
facilitator for high net worth individuals who want to invest in socially
redeeming ventures. They’re actively looking for start-up venture candidates
nationwide, though their offices are on the coasts, in Boston and San
Founded in 1992 by Woody Tasch, the organization holds investment conferences
designed to put start-ups together with investors in a pitch-event fashion, as
well as providing networking opportunities for the socially-minded.
If you have a socially-oriented startup and you’re looking for funding from
people who “get it”, don’t hesitate to contact Gary Sprague in the San Francisco
Published: 12/14/2006 6:08:45 PM, comments: 0
(Previous post - #1 in a series)
As part of an ongoing series of the Top 10 Ways to Improve Your Chances of Raising Venture Capital, I’ll jump into number 2: #2: Put your best foot forward. Don’t send an executive summary that is more than 6 months old.
We all know it can take time to obtain funding. It’s not surprising to see the funding process take 4-6 months in a normal situation. Since a lot can change in the marketplace in 6 months, most investors are going to notice the old dates on exec summaries or business plans, or that the information appears to be out of date. Remember, investors are focused on finding the inconsistencies or mistakes. Don’t make an obvious one. Not turning off “track changes” in MS Word; not spell checking your documents.
One of the first “tests” of an early stage team, which is usually only 2 or 3 people, is whether they can work together closely to create a document that makes sense and presents well. If you can’t do that with a few documents, how can you expect an investor to think you’re going to do that with his money with your company? Insisting on showing a flaky demo and hoping for the best.
Some entrepreneurs think that it’s really their idea that counts, or their enthusiasm/salesmanship, or that the investor is lucky to be given the opportunity to invest. Sophisticated and successful investors usually see quite a lot of deals, have many to choose from, and tend to be very picky - otherwise they wouldn’t be successful investors! Your demo is the main introduction to you and your company. The demo doesn’t have to be fancy or the coolest thing, it just has to clearly communicate your vision for the company. Sloppiness in this area indicates either fuzzy thinking or poor organization. Being late to your meeting (blaming it on traffic, etc.)
It shows poor planning to an investor if you’re late. A typical investor sees very little information about your company before making an initial judgement. If you can’t get to an important meeting with the investor on time, what is he to think you’ll do when arriving at an important meeting with that first marquee customer you’re going to sell?
The bottom line with all of these cautions is that you need to show your investors your ability to deal with the details of the process as well as the grand vision if you want them to take you and your company seriously.
Don Jones VentureDeal
Published: 12/14/2006 4:59:21 PM, comments: 0
I recently saw this series in a Financing Partners newsletter and thought that I would embellish it a bit (with FP's permission) with my personal experiences. Over the coming weeks, and in no particular order, I’ll include one topic in a post, along with my thoughts about it. # 1: Get personally referred to an Investor.
Finding connections that will give you (a start-up looking for funding) introductions to investors that are active in your industry is not easy. It can take time and lots of effort. One way is to go to industry and VC-attended events, seminars and pitch events and meet as many senior people as you can. Don’t be shy - tell whomever wants to listen that you’re looking for venture financing in whatever industry you’re in and at your stage and ask them if they know of any VCs (or angels) that would be appropriate for you to talk to. Then follow up with them a few days after you met them to ask again or just provide your contact info.
Online databases. VentureDeal
was designed for this type of purpose in mind. As a subscriber you can search for investors by industry, stage, region, keyword and funding range. Armed with this information you can begin to learn the names of the finance players in your industry and be able to ask about them through your network of contacts. But apart from this shameless self-promotion, you can visit other databases as well. Silicontap.com, vfinance.com, socaltech.com, vcdeal.com, venturewire.com…all of these databases will provide various types of information at various price points.
Lastly, attorneys and CPAs who specialize in emerging technology companies are great sources of contacts. In fact, many of them see the introduction as part of their value-added service. Keith Koegler of Montgomery Law Group , a busy Silicon Valley technology law firm, says that “it isn’t good enough to be a great attorney, you have to also provide clients with introductions to the right people.”
So keep searching and networking. Over time you will get those all-important introductions.