10 Things I Know About...Raising Capital
10. It's In The Plan
While most plans are obsolete by the time they are completed, they tell investors a great deal about you.
9. Know Unknowns
No one has all the answers, even those who have been there before. Have good responses prepared for those areas in which you know you are weak.
8. Management Matters
Investors seek a complete team, with most important functional roles covered. The ideal team has worked together previously.
7. Plan Ahead
When raising your first round of capital, don't assume it will be your last. Fast growth companies often raise 3 or more rounds.
6. Look For The Exit
Investors want to know that you're committed to selling or going public, typically within a four- to seven-year period from initial investment.
5. Risk Assessment
Investors value your business by judging opportunity against risk. Valuations are not constructed solely on how novel your product or service concept is.
4. Control Freak
Don't get overly hung up on control. A good investor seeks a partnership with management.
3. It's A Marriage
As noted above, investors seek partnerships. They are buying a part of your company and expect you to be collaborative.
2. Perfect Fit
You should seek a business partner who understands a given opportunity and with whom there is trust and respect.
1. Know your limits
It's very rare for the founding CEO of a startup to be the CEO at exit. Be self-aware, know the limits of your experience and be ready to change roles.
Michael Gurau is managing general partner of Clear Venture Partners in Freeport, Maine, a $50 million venture capital fund targeting New England secondary and tertiary cities, including Worcester.
WBJ Web Partners
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