Hot Tips for Raising Venture Capital
I attended a really superb event last week for female entrepreneurs who are looking for finance to run their expanding, or in some cases start-up, businesses. Now, I realise that I’m neither a woman, or looking for finance for my business, but I received an invitation from the fabulous host Simone Brummelhuis and decided I couldn’t turn down the opportunity. And I am so pleased I didn’t! Simone organised a great evening, something along the lines of Dragons Den, but more friendly and much more inspirational.
I learned a few things from the speakers and the entrepreneurs about pitching which may well come in handy in the future. But for now I thought I’d write up a few things that stood out the most and which you might find interesting:
- “Only 1% of applicants for venture capital / funding actually get the funding” Emmett Kilduff, cmypitch.com
- When pitching for funding, make sure your presentation delivers “immediate grasp and immediate gasp” Andrea Cockerton, Mudhut. In other words, you need to clearly explain what your proposition is and then how it is possible to extract the commercial value.
- Explain how you can scale up your business. An investor will only back your venture if it they can see that it will clearly cope with strong growth. If your business model requires your every attention in person, it will not be able to support rapid growth and therefore the return will be harder to come by.
- Have a strong team in place with some industry experience. Those companies that performed the best on the evening had real industry expertise in their executive team, which is something to bear in mind.
- When pitching, you can more or less leave out the financial predictions from your presentation. Pretty much all of the panellists agreed the figures are generally pie in the sky and investors are much more likely to invest in a person and a business idea. To make that seem more credible, the panellists included Anna Sofat from Addidi Business Angels, Shaa Wasmund from Smarta.com, Judy Gibbons from Accel Partners, Andrea Cockerton from Mudhut, Julie Meyer from Ariadne Capital and Bill Morrow from Angels Den.
Some food for thought in any case. Now, I’ve just got to create a good idea for how to make my second million (OK, so that’s my first million then). Huge well done to all the panellists who took part in the pitching by the way, some fantastic businesses and business ideas: Outbox, balineum.com, WorldMalls, degreeart.com, moretolifethanshoes.com, Hg2.com.
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