Finance is cool

VC Secrets @SXSW 2009

Posted on: March 19, 2009

This year’s SXSW has not disappointed, some panels simmered away whilst others exploded with passion and interest, not least Larry Chiang’s VC Secrets, which I was very happy to be part of. These are some of my takeaways.

*In order to raise money, one guy invited 10 potential angel investors to dinner; he got his investment.

*Fundraising is also “friend-raising”.

*If you are looking for advice, ask for money and if you are looking for money, ask for advice.

*VCs want to know WHY entrepreneurs are doing what they are doing – what drives them.

*If your proposal is interesting enough, you do not have to take a VC to lunch, in fact it sounds like they would prefer that you didn’t.

*Don’t forgot about government grants.

*When fundraising, you are also shopping for a mentor.

*Look to friends and family as angels.

*Bootstrap your business as much as you can.

*Practice cost avoidance, companies offer startups good deals (eg Sun Microsystems) and free software (eg Microsoft BizSpark).

*Host a local meet up for entrepreneurs and invite a VC.

*Be prepared to accept a lower valuation to attract angels/VCs to access their expertise.

*Certain investors have certain focuses – industry sectors they prefer to invest in.

*VC deals are not initially about cross pollenation between other investments in their portfolio, although this can come in handy later.

*Never lie to a VC.

*VCs rank potential deals, one example being hot, high, medium, low, dead. The last three are not good. The VC will interact with deal companies accordingly.

*Don’t be afraid to lower the amount of capital you are trying to raise to close a deal.

*VCs want to invest when they feel like they know something that other people don’t.

*Being a CEO can be a lonely job, have a network of like minded people.

*Some lawyers will do legal work for early stage startups for free or for less in order to start a relationship.

*Keep an investment pitch to time and include details of the market, strategy, monetisation plans, and why the team are the perfect people to take the company to where it needs to be.

*The last 3 months of great metrics are far better than 3 months of projections.

*There are many angel search tools online.

*Find investors through your network – other companies, friends, linked in, portfolio companies.

*Most importantly, be pleasant and polite to the VC’s staff. I think this goes for any deal, ever.

Last but not least….

*Larry says “treat a VC like a girl you desperately wanted to date in high school”!!!!!

2 Responses to "VC Secrets @SXSW 2009"

[…] They Don’t Teach at Stanford Business School should have a guest blog post by Divinia Knowles. Other SXSW attendees are […]

And then it hits you.

You leave your safe, well-paid job to try and change the world for the better by starting up something new and cool.

You realise you can only get so far as just you. You need others and you need money.

And then someone tells you that you have to treat the men (and sometimes women) who have the money as if they were ‘a girl you desperately wanted to date in high school’….

Great! Is it too late to get my job back?

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About Me

COO/CFO at Mind Candy Ltd, an exciting entertainment company creating brands with a digital heart. Most recent Mind Candy offering is for little kids and big kids alike!

At Mind Candy, responsible for defining and delivering innovative ways of increasing company efficiency and maximising shareholder value. With responsibility for company finance, ops & HR. Member of the six strong management team, board observer and Company Secretary, fully qualified Chartered Management Accountant (FCMA) and Associate Member of the CIPD.

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