Bill Reichert, managing director, Garage Technology Ventures
Fundraising in a New Ear of Venture Capital
“The good news is given where you are now your odds of raising capital have been raised dramatically. Being in SmartCamp raises your profile. The bad news is it’s a very very hard environment for raising capital.”
You need a good pitch. “You have to get the investor to say “wow.” There are so many companies out there. You have to stand out. In fact, you have to get the venture capitalist to fall in love with you. “Venture capital is a stunningly emotional process.” Due diligence for a VC is about making sure they’re not making a stupid mistake because they fell in love with a startup.
Raising money is a sales process. I pitched four startups to VCs over a 12 year period. 90% of the time, I failed.
–Before you talk to a VC, you have to generate momentum for your company.
–Target the right venture capitalists, the ones that have shown interest in your markets. Find information through your business partners. “Go after them with a rifle, not with a shotgun.”
–VCs want to co-invest with other VCs, typically. They want to syndicate their deals. You have to help build the syndicate. You have to drive the process. “We call it herding the cats.”
–Manage the process. Have your database of prospects. Set goals. Have your to-do list. Follow through step by step.