Are You Ready to Raise?
What You Need to Know Before Raising A Round
This post is part of the Entrepreneurial Education Series, which brings together successful, influential entrepreneurs and investors to teach entrepreneurs everything they need to know about early-stage investment through events, articles, videos, and more. If you are interested in learning more about raising a round, save the date for “Early Stage Investment 101” on June 17.
Hyde Park Angels launched our four-part early-stage investment education series for entrepreneurs of all levels in collaboration with partner 1871 and series sponsor The Wall Street Journal earlier this month with “Are You Ready to Raise.”
The event brought together powerhouse entrepreneurs and investors Troy Henikoff (TechStars, MATH Venture Partners), Genevieve Thiers (Sittercity), Kristopher Kubicki (Market Track), Shawn Carpenter (YCharts), and Mathew Elenjickal (FourKites) to teach entrepreneurs everything they need to know before raising a round in a panel moderated by Pete Wilkins (HPA).
If you missed the event or just want more, read on for highlights from the discussion.
Key Takeaways
The discussion started with the panelists giving advice on determining whether a business is investable or not. Moderator Pete Wilkins emphasized, “Understanding the pain in the market is critical. Does your solution truly solve that?” Panelist Kristopher Kubicki later added that the most powerful metric in determining whether your solution was solving a pain in the market were “Power users — if you can find your core users, they are key drivers.” While power users and customers came up repeatedly as highly important measures of success, several other metrics for measuring traction were also discussed.
From there, the panelists focused on the realties and mechanics of raising a round. Overall, the consensus was that entrepreneurs should be prepared to pitch to multiple investors, with Genevieve Thiers stressing “You need to talk to [a lot of] VC’s to get a few term sheets when you’ve not raised before.” Shawn Carpenter that even though you have to meet with several investors, “You definitely do the research for the investors who will add value. You are looking for a partner for the next 7–10 years.”
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When you finally do land an investor meeting, you need to be prepared with all of the information they expect, but that doesn’t mean you should send it ahead of time. “Do not ever send the deck. The deck you hold hostage for the meeting,” Troy Henikoff stressed. The reason? You want to pique investor interest but ultimately control their perceptions and reactions as much as you can. It’s hard to do that when you’ve already shown your cards ahead of time.
Finally, the panelists all agreed that once you finally get funding (and if possible, beforehand), the team is the most important vehicle for success. Mathew Elenjickal summed it up, saying, “Build a team, hire people smarter than you.”
Get the Tools You Need to Follow Their Advice
Now you know what the panelists think and recommend, where do you go from here? How do you execute on their advice?
· Watch the full event
· If you’re still not sure whether to raise a round, read The Benefits of Bootstrapping
· If you’re ready to start talking to investors, learn how to Build the Perfect Pitch Deck
· Before your investor meeting, download Genevieve Thiers’ tried-and-true templates from her own business
· Save the date for the next event on June 17
· Read the full program
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About Hyde Park Angels
Hyde Park Angels is transforming early-stage investing by taking a people first approach. The organization is the largest and most active angel group in the Midwest. With a membership of over 100 successful entrepreneurs, executives, and venture capitalists, the group provides critical strategic expertise to entrepreneurs and the entrepreneurial community. Nearly 40% of our members have founded a company, 88% are CEO’s, top executives or corporate board members, and 100% invest in startups. By leveraging the members’ deep and broad knowledge of multiple industries and financial capital, Hyde Park Angels has driven multiple exits and invested millions of dollars in over 40 portfolio companies that have created over hundreds of jobs in the Midwest since 2006.
About the Author
Alida Miranda-Wolff
Alida Miranda-Wolff heads up communications and strategy at Hyde Park Angels, crafting and disseminating the organization’s brand in all forms across all channels. In addition to single-handedly building HPA’s integrated communications plan and executing its core elements, Alida manages membership, partnerships, portfolio company support, and all community engagement.
Prior to joining Hyde Park Angels, Alida served in a variety of journalism, marketing, communications, and management roles, specializing in creating spreadable multimedia content for tech-enabled businesses at all stages. Alida has run several Kickstarter campaigns, including one of the most successful in Chicago history, and still mentors companies running their own campaigns.
Alida graduated Phi Beta Kappa from the University of Chicago in 2014 with multiple honors and awards. She remains active in the university of alumni network, serving on five advisory boards and committees. Alida is also a published author and poet, with two poetry chapbooks currently in print, Domestic Scenes and Tree Fingers.
