How to raise your next venture round

Signpost "Venture Capital"

If you want advice, ask for money. If you want money, ask for advice

I had a call this morning with a young entrepreneur. Like many founders he has a seed stage startup and is not sure about the best path to get to series A. 

As we talked about where his business was at and how he’s thinking of approaching investors, I shared some advice that I’d like to share here. That advice is based largely on the above pithy, but true quote.

There are a lot of seed funded companies out there. Not all will get to the next level of funding. The best way to maximize your chances of getting more venture capital is to know exactly what the next stage of capital is looking for.  Read More

Fundraising is a team sport

One of my companies is doing the tour of Sand Hill Road this week, meeting with the best of the best firms. I woke up this morning to read an email they had shared with their entire company highlighting who they’d met with, what had been discussed, questions, issues, possibilities, etc, etc. I love this!

So often the fundraising process is the big elephant in the room. Everyone knows it’s happening and that it’s super important. But they have no idea what’s happening, who you’re meeting with, etc. And of course, we fear what we don’t know. So, when we know something important is going on but don’t know how it’s going, then we fill that void with speculation.

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The fundraising experience

There is so much emphasis on user experience and design these days, it’s no surprise that this emphasis would make it’s way into how companies get funded.

I owe Mike McDerment, co-founder and CEO of FreshBooks for this insight. Together, we raised FreshBooks’ 1st and only institutional funding round last year. Mike has some very particular views on the importance of “experience”. In fact, the company’s manta is “execute extraordinary experiences everyday”. This saying impacts everything, big and small, throughout the company.

Back to fundraising: Investors see more opportunities than ever before. How do you stand out? First and foremost, have traction. This more than anything else gets investor attention. But assuming you have the three Ps (Product, People and Progress – aka traction), then I believe that the experience of raising makes all the difference. Read More

The end of bootstrapping

I was talking with the founder of a very successful startup this week. His company has been around for almost 10 years. With over 100 people, it’s well on it’s way to being a market leader. They have achieved that success without raising a penny of outside capital. But that’s about to change.

For the first time ever, this company will be raising capital. The obvious question is why. He had several good reasons. Wanting to be the clear market leader was one. But a big driver is that his company competes with other well-funded companies for talent.

As he said, “talent is everything”. In the current environment, startups and large tech companies alike are fighting over the best talent like never before. Developer salaries are climbing. Benefits like free meals are becoming more and more commonplace.

How do you compete with companies that have all this funny money lying around? And with valuations being as high as they are now, selling shares in your company is relatively cheap. Read More