​5 Tips from Wall Street and VC Mentors to Get Your Startup Funded

Shinta Witoyo Dhanuwardoyo  |

While there are a lot of articles that offer tips on how to get your startup funded, we thought it’d be appropriate to share points from our personal experience mentoring startups as leaders in the technology space. From Global Entrepreneur Summit’s ‘Spark the Fire’ competition in Stanford, to Founder Institute’s Startup Launch Program in Jakarta, we’ve seen what creates a happily funded startup. The perfect recipe doesn’t exist, but these are our tips as mentors who’ve helped create successful ventures.

Cling

It’s a no-brainer that having a great project is imperative to getting funded; a one-of-a-kind project that an investor can’t resist writing a check for! But, in the end, it’s really up to a particular investor and what peaks their interest. This is why we advise startups to “cling” to their investor(s). By clinging to that one investor who sees potential, you’ll learn more about what they like and are looking for, and if it matches what you’re building. By clinging, you’re also developing a solid relationship.

Go “Hunting”


There are a number of local events that offer advice about funding, pitching investors, and more, that are free – be creative! One can find plenty of these opportunities on Eventbrite. In our personal experiences, we’ve learned that by attending these events, we often run into investors who are ready to write a check if the encounter is inspiring, the founder has a scalable company or product that is disruptive, and the follow-up after the event is consistent and respectful until an investment is locked.

In a recent experience within our inner-circle, a friend attended a local medical devices event and as he was getting coffee, he started to mingle with one of the attendees who was also getting coffee. As it turned out, that attendee was a medical physician and was quite interested in our friend’s innovation. The medical physician was also looking to invest in startups to diversify his investment portfolio. One thing led to the next and the medical physician was the first investor who wrote that ‘million’ dollar check.

Timing is Everything

In our personal experiences, we’ve learned that the problem isn't always about the startup or the investor, but more or less what the micro and macro economies are facing at a specific time. Take this year, 2016, for example: the first three months into the year, funding was flat. That meant a period of no IPOs and not as many investors who wrote checks from previous years. Why? Well, the crazy presidential election had a part do with it. There are just way too many uncertainties.

Then, it wasn’t until June when Microsoft (MSFT) acquired Linkedin (LNKD) for billions. That shifted the mood a bit amongst investors where some did “get out of bed” and started looking for projects to fund. The bottom line is, similar to the real estate industry where it’s all about "location, location and location,” startups and funding are more like, "timing, timing and timing.”

Think Globally about What’s Possible

You’re at an advantage if your startup is scalable worldwide. The tech economy is global, so if a startup can only scale nationally or locally, that may be a slight disadvantage to getting funded. Some of the common barriers we’ve seen are when startups or projects are just not scalable.

The way to describe an investor’s feelings towards a unique startup is like saying "beauty is in the eye of the beholder." Some investors may find a startup attractive and breakthrough worthy while others don’t. Now, how can a startup distinguish which investor is which is this scenario? That's a billion-dollar question. Startups need to understand and try to place themselves in the investor’s shoes and ask, “would I write a check for my own startup.” No doubt most would say, yes, but if it’s a yes then why doesn't that startup fund themselves? Before you shun the idea as unfeasible, remember that there are different mediums and it’s been done before. We’ve heard stories about startups that borrowed from parents, used credit cards and took out small personal loans to get an idea running or a prototype going — bootstrapping!

It all depends on the startup as to whether you should go big and ask for a big amount to scale the business at one instance, or lower the asking amount and raise funds in different rounds. It's not a simple recipe and heavily dependent on the project itself. This is where mentors play an important role to guide you on your unique project.

Trust: It’s Not Just Your Startup, It’s You

This is especially true for female investors, many of our encounters with our peers, female intuition is put into play to determine if the person(s) behind the startup is trustable. Trust is key. When an investor writes a check, they’ll ask themselves if the startup will use the money wisely. If a startup is already generating money, that's a whole different story. But, if a startup is heavily dependent on every single penny in the bank, and when one penny isn’t utilized correctly, that's one penny that is lost and could have been spent on something more beneficial for the company.

Trust can be read from how a startup pitches themselves, meetings between a startup and the investor, and how down to earth the person(s) behind the startup is. On the popular ABC show, Shark Tank, you see many aspiring entrepreneurs walking into the judging room to pitch their product/idea. Very often, the ones that act like a know-it-all are the ones that usually walk away empty-handed. No investor on earth wants to work with someone who’s stubborn, poor to take in constructive criticism and not willing to take advice and make changes when necessary. Great leaders start from listening, not talking.

We see common problems startups face while searching for funding and we’re on a mission to resolve them. While we run multiple ventures, we see the importance in mentorship and giving back as much as we can to help startups flourish. There are many mentors, such as ourselves, who are willing to help you in your journey to get funded, and asking is the first big step!

by Jenny Q. Ta & Shinta W. Dhanuwardoyo, Founding Partners of VCNetwork.co

Jenny Q. Ta and Shinta Witoyo Dhanuwardoyo are the founders of VCNetwork.co, a comprehensive database of independent venture capitalists around the world who are seeking viable startups to fund. VCNetwork.co recently launched a worldwide mentorship program that’s first-of-its kind. This program aims to help startups secure funding, while increasing scalability through one-on-one time with the founders.

(Photo by Larry)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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