After a few weeks of quiet while we focused on product launch, the fundraising roadshow is kicking off again next week with a trip to Boston.
One of the big decisions every Canadian startup faces is if / when to raise US venture capital. Canadian VCs seem to do a good job early on, but they look for deeper pocketed, more focused VCs with potential exit / strategic relationships to come in sooner or later.
We are pretty early into our story, but with a direct-to-consumer business model, we need strong backers. We also needed backers who understand this go-to market. For these reasons, we’re speaking to select US VCs as well as most of our local potential funding partners.
Continue reading Location, location, location…
When pitching many VCs simultaneously, one thing becomes clear. No matter how constant your message is, the VC will approach it from his / her viewpoint, background, context, good or (most often) bad experience.
It is so important when traversing these many perspectives to not mold you or your story to fit what they like or to avoid what they don’t like (the “bad girlfriends” as I like to call them). You need to stick to your core messages, value proposition, goto market strategy, etc. Don’t cave in and acknowledge the VC’s view if it conflicts with your core pitch. As a gentleman CFO, I am guilty of this myself. Always quick to see the merits of various viewpoints, only later realizing that while interesting, it’s not consistent with how we intend to run our business.
Bottom line: know your value and goto market and stick to it. If you waffle, you’ll get caught out and they won’t invest. Or maybe they will and then force your business down a direction you hadn’t planned on.
Today we pitched a senior partner from a tier 1 east coast VC. This gentleman does nothing other than look at deals in our space (broadly – mobile communications). It took us a while to get him and it was worth it. He instantly got our story and value and is moving to the next step.
It can be tempting for us startup folks to take meetings with any VC who could write a cheque. Often for an A round this is OK. You work with someone local who can get you started. After that however, finding the right VC, one that lives and breathes your space, can make a big difference.
This was only meeting 1 of many. There is a 1% chance in general of closing a deal with a specific fund. Especially, when that fund is tier 1 and can pick and choose its dealflow. Still, it was a nice victory moment for us and we are excited to continue our discussions.
Yesterday, we presented our budget for approval. As a Canadian, I couldn’t help thinking about our Federal Finance Ministers who always buy new shoes on budget day. Being in a startup, I bought new shoe laces.
Budgets are a strange thing. The actual budgeted numbers are not that useful, but the budgeting exercise when done right is invaluable. It’s all about thinking through the key assumptions and metrics of your business. What are the key drivers? Model them. What people will you need and when in order to achieve plan?
I firmly believe that if you don’t measure something it’s because that thing is not important. Therefore, once your budget is approved, it is vital that you track actual data for your key variables / assumptions. This will help you determine if you were correct in your hypothesis for the business. It also helps you determine whether, as managers, you are making good decisions and predictions for your business.
Our budget is approved now. As one of our investors said: It’s all about execution now…