The 2011 Pipeline Fund Fellowship Pitch Summit had eleven woman-owned, for-profit, socially responsible businesses presenting their business plans, hoping to raise money from a group of ten women learning to become angel investors. During a break in the pitches, Nithya Das, an associate at the law firm Goodwin Procter presented the keynote. She represents and advises emerging and later stage companies on venture capital financing, securities offerings, and strategic partnerships. Drawing on her capital raising experiences, Nithya shared her top ten recommendations for start-up ventures.
They are as follows:
1. Keep your valuation reasonable
If your valuation is reasonable in the first round of financing then you have room for growth in the second and third rounds.
2. Be consistent
An entrepreneur must be flexible but they must balance that with knowing when to stay the course and be firm.
3. Raise more money than you need
You may think you know how much money you need but you don’t. You need extra money to be able to address the inevitable problems and hiccups that you didn’t expect or plan for.
4. Fail fast
It’s OK to stumble. But fix it, and fix it fast. Identify the problems, make changes, and move on!
5. Avoid being a “Me-Too” player
Build your own identity, be able to describe your company in a way other than “we’re just like Google.”
6. Features are not always your friend
Don’t get bogged down in too many or too fancy features. Purposely constrained products are easier to use and market. Identify and work on your three main must have features first.
7. Identify clear milestones for money-raising
What goal or accomplishment will trigger the need for a second or third round of fundraising? Planning for multiple rounds and communicating your plans will indicate confidence and help inspire investors.
8. Pick your investors carefully
Whether you are raising money from a venture capitalist or angel investor be intentional about your choice. Do not select an investor based on reputation or term sheet alone. Evaluate the person who will be sitting on your board – what is their experience in your sector? Who can they introduce you to? The expertise and network of your investor is more important than valuation.
9. Don’t be afraid to say no to investors
Investors may strongly suggest a course of action but ultimately you need to make your own informed decisions. Take advice but be the boss.
10. Be wary of people who provide sage advice in list format
In other words don’t rely entirely on what you can read. Surround yourself with real people and experts who can give you feedback regarding your unique situation. Trust your instincts and surround yourself with a great team.
Nithya finished with one bonus thought. Based on her experience she feels it is most important to remember Rule 1, “trust your instincts and surround yourself with a really great team! With a great team you can succeed at anything!”
This post on Venture Capital was authored by Nithya Das.