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12 Startup Founders & VCs share their advice for entrepreneurs who are raising capital in 2021
As a part of the “Off the Record podcast with Aram Melkoumov,” we have interviewed highly experienced CEOs and VCs to give you practical ammunition for this year.
Some of our interviewees wrote first checks to Uber, others had half a billion-dollar exits. If you are considering raising seed or series money, this resource is for you.
(If you are into podcasts, we have all of these interviews in full here. Just pick your favourite app, Spotify, Apple, Google.)
Part 1. Mechanics of running a business before raising
#1 Henri Asseily - former founder of Bizrate.com/Shopzilla, US$569 million exit; also a VC
1. Figure out how you are going to stand out and compete with others.
Everyone is working from home, we are all on zoom. How you as a founder of a new SaaS product, for example, are going to inject yourself into someone’s zoom packed schedule?
2. Try to keep your company alive until the market rebounds after COVID.
If it doesn’t rebound then a lot of companies will die. And it will be easier for you to start a business from scratch. And always remember this - there is never a better time to start a business than towards the end of the downturn because everyone has time for you.
#2 Troy Henikoff - Managing Director at MATH Venture Partners, used to be a software engineer
1. Really think about what features of your company do well in COVID, post-COVID world.
#3 Gary Amaral and Armando Biondi - co-founders of Breadcrumbs
1. Start a company with people who’ve been founders before, if you can find folks like that. Make it a part of your strategy.
2. Don’t over-optimize your business for too much money. $350,000 is enough today to start almost anything. And you can raise this amount almost anywhere. This simplifies things. Going for 1 or 2 million dollar rounds have a completely different set of requirements.
3. Whenever you are accepting money from someone you are committing your 2,3,4 or 10 years of life to it.
More than thinking about investors and how to attract them, or how much amount to raise, early-stage founders need to think about the value of the time you are putting into your business. Because those years will be gone.
And think about your company to validate the progress for yourself first and for investors second. You can raise money, you can make money, you can start another company, attract more investors, but the years you put into something, those are gone.
#4 Ilya Brotzky - bootstrapped founder and CEO at Vanhack
1. If you figure out how to sell as a founder then you control your destiny. Get to a point where you are making $5,000-7,000 per month and can pay a 3 people team.
2. Keep your head super low and focus maniacally on customers. That’s all that matters.
#5 Mark Morissette - CEO & Co-Founder at Foxquilt
Throwing bodies at the problem is NOT the answer. A lot of companies tried this route and failed. Don’t rush to acquire talent. Measure ten times, cut once.
Part 2. Raising, what to consider
#6 Chad Stender - VC at SeventySix Capital
1. Constantly be networking. Find ways to build relationships and expand them to have true partnerships. Instead of just a surface-level connection by following someone on Linkedin.
2. Learn how to tell your story and enjoy telling it. Get better at knowing who you are speaking to and how much of your story they want to hear. Sometimes it needs to be short, for other folks 5 minutes may not be enough.
#7 Geoff Schneider - early-stage private investor and founder of Cava Capital
1. Don’t fall into a single lane of how to raise capital. There are plenty of ways to do it. Don’t be afraid to use crowdfunding markets as a way to supplement your raise. Find your sweet spot of how much money you need to raise and add 3-6 months of capital.
#8 Dr. Brett Belchetz - CEO of Maple (getmaple.ca). Raised $73.7M in 4 rounds.
1. How long do you want the raised money to last? This will guide all your spending decisions.
2. Don’t blow your money on the things that are not proven to give you a return. When you spend your money, you want to ask yourself - for every dollar I put into my company what growth will it give us? Will the growth I get from this investment get us to the necessary milestone within the timeframe we have?
When you do these calculations it helps you test the ROI metrics on each spending decision.
#9 Craig Zingerline - Chief Product Officer at Sandboxx; Founder of Startup Growth University
1. What metrics will impact your business and does raising money help you positively impact it? Honestly.
#10 Lu Zhang - Founder & Managing Partner of Fusion Fund
1.Treat the meeting with a VC as a free consulting session. You’ll be able to get more information from them. Even if they are not interested. Always ask is there anyone else you’d recommend for me to speak to. That changes the dynamics of the meeting.
2. Research a VC before reaching out to them and find the right channel to reach out to them. For example, Lu really likes other founder referrals, she takes them seriously. In other words, think beyond cold email or Linkedin messages.
Part 3. How to think while raising your first round
#11 Nishaant Sangaavi - CEO at EnergyX
1. You have to realize that everything comes with terms and conditions. It’s the ability to understand what you are able to bear and what not that will make a difference. That’s why talking to other founders and accelerators are great.
#12 Jillian Manus - Managing Partner at Structure Capital. Wrote the third investment cheque to Uber
1. Listen to 3 TED talks directly related to business and 4 TED talks with non-business topics. You can take something away from all of them and apply it to your work. It helps you get out of your head, stop the frenetic daily pace of running a company, think, unwind.
You can find all of these interviews in full on our podcast here: https://otrwitharam.transistor.fm/subscribe
Subscribe for future episodes. We are talking to world-class entrepreneurs every 2 weeks.
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