This is a guest blog post written by Kristin Garn. Kristin is the Founder and Director of Mathoons Media Inc, an educational technology company that builds mobile teaching and learning tools.
It was all about the art of “The Pitch” at the recent Metabridge Cascadia Summit, held during their June event at Kelowna's Rotary Centre for the Arts. A dozen companies (including eight from the Okanagan) were given a scant sixty seconds to present their businesses and compete for the top spot chosen by judges from Google, the C100, 500 Startups and more.
This “One Minute Pitch” competition created an excellent prelude to the panels which followed. Dan Park, VP of the San Francisco based venture investment firm Azure Capital, was present onstage at the first of the two Metabridge panel discussions and offered great tips to tech startups regarding “How to Move to a Series A Fund Pitch.”
Park highlighted four sound pieces of advice for seeded companies that are considering raising Series A capital:
1. Venture capital is expensive. It is better to raise money through customers by increasing your own sales first.
“Focusing on customers early helps you refine the business model, understand your target customer and determine optimal pricing.” Park recommends “generating a solid base of revenue” since it “allows you to go to the market on your own terms (you raise money because you want to, not because you have to).”
2. Prepare for a significant amount of lead time before raising capital. Initiate your relationship with investors early because this relationship will create a good foundation of trust.
“It takes Seeded companies slightly more than thirteen months to raise financing on average,” says Park. “This is from the time they raise seed financing and not from the time they hit our $60-$80,000 monthly revenue target.”
3. Prepare to raise more than you think you need.
He recommends raising 18 to 24 months of runway, although he adds that, “Raising a larger round requires more traction.” Knowing how to express your financial plans is key. “It is important to outline the specific milestones that you want to achieve with a larger amount of cash.”
4. Always chase your own customers first and investors second.
“The best time to be raising money is when you don’t need it,” indicates Park, adding that nothing replaces a sound approach to business development. “My favorite entrepreneurs are those that provide me periodic updates that allow me to track the business against the goals they set out. It’s great to see entrepreneurs that can articulate their goals and achieve them.”
The second panel at the Metabridge event addressed two ongoing challenges for early stage businesses: growth and exit strategies. Present on the second panel was Kelowna’s Jason Richards, Senior VP of Global Business Development at Procera Networks and a veteran of exits after the January 2013 Procera acquisition of local Vineyard Networks.
Richards tailored much of his advice to local tech startups, urging them to search out information on such things as the Okanagan Innovation Fund and SIDIT (the Southern Interior Development Initiative Trust). “There is a lot of support for good local companies but you have to do your homework and discover what is there.”
He also applauded business owners who were in attendance and added, “There is great value to attending conferences. Don’t under rate the opportunity that ‘getting out and speaking’ has for inbound business. However, make sure that you are spending the right amount of time in your business growing your own customer base.”
From pitch to growth to exit, the Metabridge Summit offered a spectrum of information for attendees. Inspiring growth, one final word of advice came from Reza Kazemipour, CEO of Oris4 and mentor at Growlab: “Regardless of whether you are growing your customer base or looking for investment, the key things that you want to grow continuously are: Team, Technology and Traction.”