By Tom Still

GREEN BAY, Wis. — The Federal Reserve just raised interest rates for the ninth time in a year, inflation remains alive if not well, the war in Ukraine shows no sign of winding down and the public markets are spooked like a jittery racehorse.

In short, it’s a perfect time for a young company to try raising angel or venture capital… if they’re smart about it.

That’s been the message at two recent events, one in Lambeau Field in Green Bay and the other at the Whitewater University Innovation Center, where veterans of private equity fundraising talked frankly about the realities of attracting capital in down markets.

Their common message to entrepreneurs: Present a financial model that helps investors envision a healthy return, make a crisp and dynamic first impression, and don’t expect a short courtship.

The first such discussion took place March 9 in Whitewater, where Andy Walker of Rock River Capital Partners said entrepreneurs need to set realistic goals when meeting with investors like himself and not become discouraged about the length of the process. Rock River is part of the Badger Fund of Funds network and typically invests between $250,000 to $1.5 million in a single deal. But such deals don’t happen every day, even if the fund shows initial interest.

“A lot of times though, the second we give them a meeting, they think ‘I’m getting funded’,” Walker told a Tech Council Innovation Network crowd. Even if all goes well, he continued, there may be a dozen meetings before an investment is made — if ever.

“Before we invest, we’ve probably seen the company and followed it over a year… We don’t have one meeting and hand you a check,” he said.

Walker wasn’t trying to crush the hopes and dreams of entrepreneurs — he was and is one himself — but aiming to set expectations for what investors need to see.

“For it to be a (venture capital) backed company, we’ve got to see a ten-times return on our money. We’ve got to see market sizes that are just massive,” Walker continued. Early stage investors typically lose all of their money on one-third of their investments and some or much of their money on the second one-third. It’s the final one-third, Walker said, in which investors must see strong returns to make up for the other losses.

A strikingly similar message was delivered March 20 at the Wisconsin Tech Summit by Keith Davidson, a Dallas-based principal with CliftonLarsonAllen. He told entrepreneurs not to expect fundraising to be like a “Shark Tank” episode but a lengthy process that begins with the question: “Should I be raising angel or venture capital at all?”

Not a stupid question when one considers that roughly 1% of companies that set out to raise such capital succeed. Preparation is what can dramatically raise the odds for any company, Davidson said.

That includes refining a financial model; researching potential investors; building a short pitch deck that captures the problem and outlines a marketable solution; following investor instructions before making a pitch; and wowing them in the first meeting.

Forty slides are a deal-killer, Davidson said. Seven slides that focus on the problem, the solution, the urgency, what resources are needed to get there, the team and progress to date are what investors need to see.

Investors don’t fund companies to pay expenses and salaries or to help firms that are running low on money. More commonly, Davidson said, they invest to produce a working prototype, finish a “minimally viable product,” complete clinical trials or commercialize or expand the product.

Part of the calculus is knowing how much cash is needed from the investment itself, he said, while also figuring the “burn rate” during the time it takes to close a deal.

Like Walker, Davidson said patience is a virtue and no one should expect a “Shark Tank” ending. “The goal of the first meeting is another meeting,” he said, and so on until there is a yes or a no.

The economy is wobbly but angel and venture deals still happen, most often for those who prepare and persevere.

Still is president of the Wisconsin Technology Council. He can be reached at