Challenging Funding Markets Precipitating a Change in Growth Strategy
To put it mildly, the last few years have been challenging ones for both the venture capital and private equity funding markets. Companies that raised capital in 2020 and 2021 often did so at a favorable valuation, and with the expectation that they could tap additional rounds of funding a year or so down the line. As we have all discovered, that has not necessarily been the case.
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Read MoreThe Third Biggest Capital Raise Mistake – Running out of time and money. Not budgeting the necessary time, talent, and resources to complete a successful funding round.
Regardless of the type of investor that you are targeting, most will move much slower than you prefer. In our experience, too many management teams have unrealistic expectations for the amount of time and effort needed to successfully complete a capital raise.
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Read MoreThe Second Biggest Capital Raise Mistake – Positioning your company incorrectly. Not understanding the needs, expectations, and goals of your target investor.
To run a successful capital raise process, the company narrative, positioning, message, and materials must be designed to meet the needs of the correct investor, with the correct expertise, at the correct investment stage.
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Read MoreSave your company significant time and money – avoid the most common capital raise mistake.
Regardless of the product or industry, there is one significant mistake growth-stage entrepreneurs commonly make over and over again. This mistake leads to wasted meetings, wasted effort, wasted time, and most importantly wasted money. In extreme cases, it can lead to a failed capital raise or depressed company valuation.
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Read MoreFinding great investors to fund your company can be a challenge. Businesses can be complex. However, if you want to really capture the attention of potential investors - be LASER focused on answering three vital questions. Who needs your product? Will they pay for it? How much will they pay?
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Read MoreRaising capital can be challenging. However, the good news is that great ideas paired with a great business can capture investor attention.
Many incorrectly believe that success is simply a strong rolodex. That is incorrect. The trick is a strong PLAN.
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Read MoreGood ideas get a first meeting. Good ideas paired to a good business get funding.
Generally speaking, investors will NOT beat a path to your door. The truth is your greatest competition is indifference and lack of understanding. Investors see interesting investments - every day, every week, every month, for the entire year.
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Read MoreWant to Showcase Your Company’s Uniqueness? Then the Pitch May Need to Venture Beyond Product/Market Fit
As funding markets tighten up in 2022, raising capital - from both VCs and PEs - may get a little tougher. The competition for investment capital is always fierce. However, a pullback in the funding markets will make that task even more difficult.
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Read MoreEverybody Wants Rapid Growth. Right?
‘Rocket ship growth’. Doesn’t that sound exciting? You identify a problem in a market that you think you can solve. You create a small company, hire some people, and successfully achieve a level of product-market fit. Congratulations! Honestly, that is quite an accomplishment. Something that most people in the world won’t even dare to attempt, let alone achieve some success in doing so.
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Read MoreThe age-old question - What are investors really looking for?
Entrepreneurs often don’t really know what investors want, and investors don’t often share what they are looking for. Let’s end the confusion here and now. Investors want to fund ‘Execution, not Exploration.’ If there was one principle about understanding investor behavior that I would emphasize with growth-stage companies it is this one.
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Read MoreIn today’s investing environment, the CEO of a Growth-stage company has to constantly keep an eye on the horizon, engaging and building relationships with the investor community for ‘the next stage’. In the past, if your company was backed by venture capital funds, keeping your eye on the horizon primarily meant knowing which venture funds could write larger checks for the next round as the company grew.
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Read MoreAll entrepreneurs, founders, and General Partner teams want to know one thing - “How can we do a better job of engaging potential capital partners?”
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Read MoreThe Elizabeth Holmes Theranos trial is underway, which has brought the story back front and center in the minds of investors - and what a story it is. Yes, there were plenty of underhanded things (and I mean plenty) that they did wrong. Plenty of things that they should (and most likely will) get punished for. However, that story has already been written. The book Bad Blood by John Carreyrou is a must read if you have interest in the topic.
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Read MoreYou can have a superior product, engaged customers, great marketing, and stellar customer service. However, none of that will matter if you do not have access to capital - when you need it. History is littered with great companies that hit a rough patch, stumbled, and ultimately went out of business - simply because they could not access the necessary capital in the moment they needed it most.
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Read MoreWe recently passed the midway point in 2021 and already tech startup investing is hitting record levels. As recently reported in the Wall Street Journal, “Investment in U.S. startups for the first half of 2021 hit $150 billion, eclipsing full-year funding every year before 2020, according to a report from PitchBook.” Who could have guessed just a year ago that this would be the case? This time last year businesses across the globe were closed down, and the future of the economy was still well in question. Now, the US stock market is hitting all time highs, and funding for private markets - particularly growth-stage and early-stage companies - is soaring.
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Read MoreMost companies want a more engaged ecosystem. They want enthusiastic investors and loyal customers. However, most don’t understand the basics of making that happen. What value are you adding to those around you that you don't realize, or are not even aware of? Sadly, most companies don’t know the answer. It is high time to change that.
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Read MoreThe market competition for investment capital is now more crowded than it has ever been at any time in the past. More companies are raising capital. More funds are raising capital. The noise level is deafening. Capturing the attention of potential investors is harder than ever. This applies to Venture Capital funds, Private Equity funds, and any company raising investment capital, at any stage. What can a company or a fund do to set themselves apart in this competitive landscape?
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Read MoreThe most common request that I hear from Growth-Stage Founders and CEO’s is ‘More, More, More.’ I want More. I want to meet more investors. My company needs to meet more Private Equity funds, Venture Capital funds, Family Offices, Wealthy Entrepreneurs, etc.. Does that sound familiar to anyone else?
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Read MoreWhen you are raising your first fund or raising your Seed round, without question, the most strategic investor is the one willing to write the check. I realize that statement is meant to be funny, but sadly, in many cases it is true. Getting the first fund or seed round done is tough. No one likes doing it. But hopefully you have surrounded yourself with a good supportive ecosystem to help you through the process.
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Read MoreSo, you successfully raised capital your first fund or first round of capital. Congratulations! It was tough. My guess is that it probably took a lot longer than you expected. You were probably turned down way more than you care to admit (and that stings). And, you are not particularly looking forward to having to do it again.
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