Startup Investing 101

If you’re passionate about boosting entrepreneurs in Greater Des Moines (DSM) in their earliest stages of starting their business, learn how to invest in them and help create an entrepreneurial ecosystem in the region by watching the Startup Investing 101 webinar. Kevin Bradley, Director of Investor Relations at ISA Ventures, and Diana Wright, Startup Community Builder at the Greater Des Moines Partnership, share the process for angel investing and venture capitalism. A panel of experts also answer questions about startup investing during the second half of the panel. Experts include Liz Keehner, Next Level Ventures, Tej Dhawan, Plains Angels, and Andrew Kirpalani, Workhound.

Stages of Financing

Angels are most often prevalent during the early stages of financing, including during the bootstrapping stage when the founders are still working full-time, but trying to get their vision off the ground. Eventually, they will scale and need more funding. This is when startup owners may reach out to family and friends which is known as the pre-seed stage. During the pre-seed stage, investors help founders set up the business and pay those initial costs before moving to seed funding, the first equity funding stage, and Series A and Series B funding, which come later as the company grows.

Process of Investing in a Startup Business

The process of investing in a startup business will include the following pathway:

• Find entrepreneurs
• Screen business ideas
• Hear a pitch from an entrepreneur
• If interested in the business, move into the due diligence stage
• Negotiate and set terms with founders
• Syndicate a deal
• Create a process for documentation (including legal documents)
• Close a deal

Startup Expectations + Choosing to Invest in Startups

All startups begin in the infancy stage and set your expectations accordingly. Set the bar high but remember to create founder-friendly terms. Other things to remember as an investor include communicating with entrepreneurs often, investing with other investors in the community, diversifying investments and providing feedback whether it’s a yes or a no.

The panelists discussed their reasons for investing in startups including making money from the invested capital, finding founders/technology that disrupts markets and solves problems that can change the world and supporting job creation and economic development.

Find resources for investors, search existing investor networks in Iowa and watch the entire startup investing webinar below:

 

Discover more about The Partnership’s tools to help Greater Des Moines (DSM) startups and small businesses develop and grow their ventures with The Partnership’s Small Business Resources.