Brianna McDonald is the President of Keiretsu Forum Northwest, the local chapter of the world’s largest angel investment network. Her work helps facilitate funding for growth-stage companies, including support and education for both entrepreneurs and investors. Here are five of Brianna’s recommendations for first-time entrepreneurs:
- Do your research. If you will go out and fundraise, do your research where it is the best fit for you to start your journey with the right investors. Investment Groups and investors all have a different investment thesis with funders at different stages. Understand who they are ahead of time. Cold reach outs and spamming investors on Linkedin is not always the best policy..
- When you are ready to get in front of investors, focus on creating interest. Remember, you are the best at what you do every day, and investors are hearing it for the first time. By focusing on interest, this gives you the ability to follow up with more people, get to know them, their interests in your company, and if they will add value to the cap table.
- If people express interest in investing in your company but do not respond after expressing interest, it doesn’t mean they have lost interest. They are probably busy. Be patiently aggressive! Keep following up and stay in front of people. BE DIRECT to assure you get a definitive answer one way or the other. There is nothing wrong with a “no.” It allows you to move on to the next!
- Vet your investors. Have some good questions ready. Ask them how many companies they’ve invested in and how they support and work with their portfolio companies. Requesting references is also not a bad idea either. Your cap table is the foundation of your business. The investors that are there are essential.
- Finally, your deal terms and valuation matter. What makes your deal and terms attractive? Just like when buying a house, if you over-price the house, it usually will not sell, sit on the market so people think there is something wrong with it, and when it does sell it is less than what it was worth. Unfortunately, for entrepreneurs, if the last scenario takes place, usually the company will have to conduct a down round or go out of business. Leverage your business advisors and investors to help you determine the right valuation and deal the market will bear.
Learn more about Keiretsu Forum and get involved by applying to become a member, attending one of their monthly forums or other educational sessions, or registering for their upcoming virtual West Coast Investor Capital Expo on November 10th and 11th at k4northwest.com.