Being an entrepreneur means asking for money—and it takes some skill to know how to make the ask. We spoke with some of Wisconsin’s emerging venture capital investors about what startups seeking early-stage investment should keep in mind when honing their elevator speeches, pitches and business plans. Here are some of their responses.
1) Know the value you bring to your customers.
“I’m looking for tenacious entrepreneurs with a deep understanding of the problem that they’re solving, the value they create and how to monetize it.” – Dana Guthrie, managing partner, Gateway Capital Partners
“Something I see a lot from startup founders is the expectation that they can just raise money with limited traction for their company. They don’t have to have a product built yet, but they need to have enough customer traction to prove that they can actually use the funding to grow rapidly.” – Matthew Kee, manager, Tundra Angels
2) Be able to communicate your vision clearly.
“One thing that I always stress with companies that we talk to is communication is very, very important. They can have the greatest idea. But if they can’t communicate with investors, they’re never going to raise any money.” – Mark FitzGerald, partner, ComMUnity Venture Capital
“One of the biggest things that I’m impressed by is the ability to articulate what your company does. As an investor, I don’t know every space, I don’t know every industry, but if you can condense it down in 30 seconds or a minute to who you are, what you do and why it matters, and I get it, your chances for getting a meeting and further conversations just went through the roof.” – Kee
3) Have the right team.
“Someone can come to me with the best business plan, but if they can’t execute it, then it’s meaningless. So we really need to have faith in a team. What I want are people that understand that it takes a different mindset to build a product than to build a company. Entrepreneurs often feel like they have to know it all. What they need to understand is that their time is valuable and that there are experts out there for a reason.” – Richelle Martin, managing director, Winnow Fund.
“You could have the greatest product in the world, but if you have the wrong people, it’s not going anywhere. If there’s one thing that that I really try to shy away from, it’s a single owner. A team shows me that you’ve got a group working together, bringing different skill sets and moving an idea forward.” – FitzGerald
4) Let investors be a resource.
“Just because one group doesn’t fund you doesn’t mean that you’re necessarily not fundable or that we don’t want you to succeed. You might just not be the right fit. It might just not be an industry that we look at. It might not be the right timing. We might already have something like that in our portfolio and we want to diversify. There are a lot of reasons, and I certainly hope that I can be a resource for more than just money.” – Martin
“What makes a good angel investor in my mind is opportunistic thinking. Using that opportunistic thinking. I know that if we can channel that opportunistic thinking to add value for a startup, it’s going to have a multiplicative effect. That’s what that startup needs. At the end of the day, it’s money, yes, but it’s also that out-of-the-box, opportunistic thinking that will get that startup to make the progress they need to make.” – Kee
One last tip? Do your homework. “When you don’t, the investor quickly picks up on the fact that you didn’t and you’re probably lobbing an email to any and every investor,” Guthrie says. She recommends researching the fund or group to make sure you’re at the right investment stage, that you meet any criteria they have, and that your vision falls aligns with their deal flow focus.
Learn more about the direct support WEDC offers startup and emerging growth companies in the form of Technology Development Loans, SBIR/STTR Matching Grants and the Qualified New Business Venture Program.