Are You Ready to Raise?
This post is part of the Entrepreneurial Education Series, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about raising a round, save the date for “Early Stage Investment 101” on June 17.
Hyde Park Angels launched our four-part early-stage investment education series for entrepreneurs of all levels in collaboration with partner 1871 and series sponsor The Wall Street Journal earlier this month with “Are You Ready to Raise.”
The event brought together powerhouse entrepreneurs and investors Troy Henikoff (TechStars, MATH Venture Partners), Genevieve Thiers (Sittercity), Kristopher Kubicki (Market Track), Shawn Carpenter (YCharts), and Mathew Elenjickal (FourKites) to teach entrepreneurs everything they need to know before raising a round in a panel moderated by Pete Wilkins (HPA).
If you missed the event or just want more, read on for highlights from the discussion.
Key Takeaways
The discussion started with the panelists giving advice on determining whether a business is investable or not. Moderator Pete Wilkins emphasized, “Understanding the pain in the market is critical. Does your solution truly solve that?” Panelist Kristopher Kubicki later added that the most powerful metric in determining whether your solution was solving a pain in the market were “Power users — if you can find your core users, they are key drivers.” While power users and customers came up repeatedly as highly important measures of success, several other metrics for measuring traction were also discussed.
From there, the panelists focused on the realties and mechanics of raising a round. Overall, the consensus was that entrepreneurs should be prepared to pitch to multiple investors, with Genevieve Thiers stressing “You need to talk to [a lot of] VC’s to get a few term sheets when you’ve not raised before.” Shawn Carpenter that even though you have to meet with several investors, “You definitely do the research for the investors who will add value. You are looking for a partner for the next 7–10 years.”
When you finally do land an investor meeting, you need to be prepared with all of the information they expect, but that doesn’t mean you should send it ahead of time. “Do not ever send the deck. The deck you hold hostage for the meeting,” Troy Henikoff stressed. The reason? You want to pique investor interest but ultimately control their perceptions and reactions as much as you can. It’s hard to do that when you’ve already shown your cards ahead of time.
Finally, the panelists all agreed that once you finally get funding (and if possible, beforehand), the team is the most important vehicle for success. Mathew Elenjickal summed it up, saying, “Build a team, hire people smarter than you.”
Get the Tools You Need to Follow Their Advice
Now you know what the panelists think and recommend, where do you go from here? How do you execute on their advice?
· Watch the full event
· If you’re still not sure whether to raise a round, read The Benefits of Bootstrapping
· If you’re ready to start talking to investors, learn how to Build the Perfect Pitch Deck
· Before your investor meeting, download Genevieve Thiers’ tried-and-true templates from her own business
· Save the date for the next event on June 17
· Read the full program