Tag Archives: VCs

News From the Fund Raising Front

The recent New York Venture Summit, held by young StartUp Ventures, was characterized, as it always is, by high quality panels of venture capitalists. While each panel focused on a different topic, the underlying theme is always “who will VCs find fundable” . The attendees, in addition to the VCs, were mostly companies who were presenting or otherwise seeking funding. They all want to know, “how do I get money?” and “how much is it going to cost me to get VC money?” YoungStartUp Ventures is focused on the funding of all types of technology so temper some of the comments below with your own experience in the fashion industry.

Some key insights, echoed numerous times by various VCs, and sometimes contradicted by themselves (see last bullet), about the current fundraising environment and what they are looking for:

• If you’re starting a company, the average time from startup to IPO (initial public offering) is approximately 10 years. Are you and your team passionate enough about your business concept that you can go this kind of distance?

• Two guys in a garage with a good patent lawyer is still a viable startup model.

• Stay focused.

• Have a good idea of how much money you want to raise.

• Test your key assumptions.

• Creativity on the part of management is a big plus.

• On the whole VCs are looking for the quality of the idea, how will you create value from it, and the team. Some VCs focus more on the idea. Some focus more on the team. One VC, after mentioning passion, quality of the idea, and the team brought up this insight: Gates, Zuckerberg, Ellison, Jobs, etc. would never, ever, be “the team” a VC would bet on. Go figure.

So there’s the insights. Use them as you see fit.

For a more general venue for fundraising that includes fashion companies, consider SeedCamp http://www.seedcamp.com/2012/06/back-in-the-big-apple-apply-to-seedcamp-new-york-by-sunday.html

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.

VC TIPS ON RAISING $$$ — Read and heed

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On June 28 I was a sponsor and attended the New York Venture Summit sponsored by youngStartup Ventures. The event is geared towards tech – medical, IT and green/clean/sustainable companies. But there are also several VC panels which give attendees valuable information/advice about all areas of funding. The advice I heard applies to all companies. So I thought I’d share with you the key points echoed across multiple panels.

On the first panel I attended, this nugget showed up: VCs are more inclined to fund — or at least look kindly upon — a company that has a management team that has done it before. If a VC sees a recognizable name on the team, all the better.

The next gem was in answer to a question I posed — what’s your advice to a pre-revenue company to get your attention and funding? Alex Suh, Managing Director of California Technology Ventures, said, show me a quick animation of how your product works. So many start-up companies can’t do this. Now in fashion, depending on your product or service, that may be redundant because the fashion itself is the product and of course you’re showing it. But if you’re a fashion IT company, or provide some other product, take the information to heart.

On a later panel I heard some different (and perhaps contradictory) advice which was to focus on the quality of the idea and the value creation as well as the team. And an interesting point was raised about the team — if you look at Zuckerberg (Facebook), Gates (Microsoft), Ellison (Oracle), Jobs (Apple) not a single one of those people would have inspired investment by a VC when they came with the idea – in fact each of those people probably would have turned a VC off. Go figure.

Not sure you want VC money? Here’s a success story from a company that turned down eight figures:

http://www.businessinsider.com/jimdo-turns-down-vc-money-2012-6

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.