Raising Capital: While You Raise

Square One DSM, an initiative of the Greater Des Moines Partnership, and BrownWinick Law Firm hosted the third bi-annual Raising Capital Seminar on March 30. The Raising Capital Seminar provided an in-depth view of how entrepreneurs can secure significant equity capital to get their promising startup business to the next level. This is the second post of a three-part series on takeaways from the seminar. Read the first post here regarding how to prepare before raising capital.

At the seminar, speakers including Charise Flynn, Founder of c.Results and former Chief Operating Officer of Dwolla, Sheldon Ohringer, Partner at Formation Partners, Mike Colwell, Executive Director of Entrepreneurial Initiatives at The Partnership, JD Geneser, Senior Partner and Shareholder at LWBJ, Chris Sackett, Attorney at BrownWinick Attorneys at Law and Matt Ostanik, Founder of FunnelWise shared their tips on how to successfully go through the process of raising capital.

Key Discussion Takeaways

• Communicate, communicate, communicate. Keep talking with potential investors to make sure they know about your company and what you can offer them.
• Ostanik shared that in his experience, 25 percent or fewer of the potential investors a startup founder talks with will actually make an investment. If you need 10 investors for a given round, talk to at least 40. If you need 25, talk to at least 100.
• Become comfortable with term sheets. A startup founder needs to speak the same language as the investor. If the founder needs to stop and ask about terminology, he or she will lose some credibility while pitching a potential investor. The book “Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist” by Brad Feld and Jason Mendelson, is a good book for entrepreneurs to read to understand the important terminology surrounding venture capital fundraising.
• Understand what the investor is looking for. Remember, startup founders are selling an investment. Show investors how they are going to benefit from this deal. This is different than selling them on the product; this is showing them how they will make money.

Learn more by watching the video below:

 

Additionally, the following videos may be of interest as you prepare to raise:

• 10 Common Mistakes
• Lessons Learned

For even more information about raising capital, including a save the date for the next event edition, visit the Raising Capital Seminar page.