Named a Top Woman in LA Tech by Digital LA and a Top LA Tech Ambassador by TechWeek, Robyn Ward boasts 20 years of experience working with technology startups. Her coaching and consulting business, FounderForward, helps entrepreneurs raise funds and grow their businesses. She is also a Entrepreneurship professor at USC, serves on the Advisory Council to the Lloyd Grief Center for Entrepreneurship and a major proponent of diversity and equality in the technology realm. Robyn previously led strategic investments as the Head of New Media Ventures at United Talent Agency (UTA). She has worked on the early leadership teams of five venture-backed startups, including as the VP of Business Development for Docstoc (acquired by Intuit).
Robyn is passionate about boosting the number of female-led, venture-backed companies and works with several female entrepreneurs and women-centric organizations. Female CEOs receive a mere 3% of VC funding and it’s no secret the fundraising game needs to change for Women. As the mentor for our last SheWorx LA roundtable, Robyn gave our community key resources and insights to help secure funding for their business.
Diversify Your Sources of Funding
There are more ways to raise funds than ever and rounds are smaller thanks to AWS and other services that lower your startup costs. Fundraising “used to be a black box” but there are more books and resources than ever to help you succeed. Whether it is crowdfunding, entering startup competitions with monetary prizes or signing on customers before your product is built, thinking outside the box on your fundraising strategy can help you grow while retaining equity. For example, entrepreneurs that secure a customer prior to funding can leverage their early market validation to subsequently raise at a higher valuation with VCs.
There are several resources (see below) to help you find funding for your business. Ideally you will have a connection through meeting at an event or a mutual contact introduction. Use a tracking spreadsheet or CRM to manage your contacts, materials sent and conversation notes. Investors and funds typically invest in specific verticals at set amounts so you will want to have a clear idea on what you need to raise and who would be interested in investing. “The key of each round is to get you to the next set of milestones and valuation inflection points.” For your seed round you will want to raise enough to cover the next 12-18 months of expenses with a 15% safety net.
It’s Not Pitching, It’s a Conversation
Securing funding is about more than nailing the pitch. “I don’t want you to just launch into who your customer is and this is the number we’re going after. I want to know your driving why. Why is it that you have decided that you are going to sacrifice everything in your life to build this company.” Gaining an investor is not the same as pushing a sale “If you spent time or money putting together a super fancy deck then I don’t think you prioritized your time right.”
Rapport is also essential to a sound investment. “You’re going to take money from somebody and then they’re going to sit on your board and you’re going to go through the struggle of building a company so you’re building a connection.” Investors can love a business but still won’t invest if they can’t establish rapport with the entrepreneur.
Smart Ass Team, Big Ass Market, Kick Ass Product
Coined by Jeff Clavier, Robyn highlighted that investors are looking for a smart ass team, big ass market and kick ass product. “Traction wins” and landing your first customer or any other metric to show growth will boost your valuation. Hone in on the problem you are solving. “Either it needs to be a big problem or a very specific problem that a group of people are willing to pay a lot of money for.” Be prepared to discuss your market, competition, financials and other key metrics without relying on your deck. Paying someone to build your financial model is a major red flag. “You have to know your business and you have to know your numbers”
Invoke FOMO, Close Strong
The most important economics of your deal will be the price, liquidation preference and participation, employee/option pool, vesting and pay to play. Company control is largely dictated by your protective provisions and board of advisors. Terms for startups are highly specific and you will want to use a reputable law firm that specializes in startups. “Using your friend’s nephew Sammy, who practices family law, is a bad idea.” FOMO (fear of missing out) is pivotal to closing an investment. “I want to feel like this is a hot deal. I want to feel like you have talked to every other VC that I know and that this is happening and I might miss out.”
Robyn Ward’s FounderForward coaching and consulting
How To Raise Money: The Ultimate Guide to Crowdfunding by Melinda Moore
Venture Deals by Brad Feld and Jason Mendelson
Greg Bettinelli’s #LongLA Investor List
Amplify’s LA Tech Scene Overview