Lessons on raising venture capital for your startup
Last week, Entrepreneurship 101 hosted an amazing discussion on venture capital from the perspective of current and ex-VCs from the MaRS community. The conversation ranged from how a VC fund operates and manages investments to the multiple factors that influence a VC’s decision-making process before an investment.
Finding institutional dollars and getting through the doors of VCs can be tough. If you’re a new startup and looking at venture capital to fund your business, here are a few highlights from the session. For more insights, watch the 60-minute video below.
1. Having a great team is huge
A strong business model and the right people to make it happen is crucial. Your team should be able to demonstrate that they can design, build, release your product and be ready for the next task. VCs invest in people.
Read Nathan Monk’s article: “Hacker, hustler and designer: Building the tech team.”
2. Being persistent is important, but don’t go too far
Understand that VCs take hundreds of meetings a year and most companies will not get investment. An introduction to an investor is the best way to land a first meeting.
Keep in mind that you are always under due diligence and raising venture capital can take months. Being overly persistent and creating a false sense of urgency during the process can ruin the deal.
Watch Kunal Gupta’s talk on how to be professionally persistent.
3. Find funding outside of venture capital
Venture capital is not the only way to raise funds—plus you’re giving away part of your company in process. For young companies just taking off, look into bootstrapping. And figure out how to generate revenue from the start and validate your idea with crowdfunding.
- Tim Jackson, EVP Corporate and Community Development and Lead Executive, MaRS Centre for Impact Investing
- Rob Scully, Investment Manager, Investment Accelerator Fund
- Jacqui Murphy, Vice President, Marketing, Auvik Networks
Looking to perfect your pitching skills and be ready to present your idea, startup or yourself in front of investors? Check out next week’s Entrepreneurship 101 session on pitching.