Looking for venture capitalist funds to invest in your tech company? The Northern Virginia Tech Council (NVTC) recently hosted a panel discussion “VC Investment Update Panel” that reviewed the answer to this question and many more. Moderated by Aronson Partner Norm Snyder, the panel featured a diverse set of investors with local and national experience. Panelists included J.S. Gamble, Managing Principal at Blu Venture Investors, Kristin Gunther, Vice President at Revolution Growth, Todd Klein, Managing Director and CIO of SWaN & Legend Ventures, and Adam VeVerka, Director of Business Development for NewSpring Capital.
Throughout the discussion, participants shared investment profile parameters, what their respective funds are passionate about investing in, and practical advice for positioning a company to receive venture capital investment. While their opinions on economic metrics for revenue and growth varied, the group agreed on the key points to securing funding. Each panelist felt the entire management team of an organization held significant value when making an investment decision. J.S. Gamble talked about finding personalities that mesh and function to form a cohesive and collaborative team. He also shared three reasons companies can fail, which include a team that falls apart, over- or under-funding, and lack of a market need. Todd Klein spoke of seeking leaders with deep domain expertise that understand the risks and ride of managing a start-up.
Is there anything else investors are looking for in their next target? Adam VeVerka shared the concept of the three Ms: market, management, and business model. He likes companies with a defined market segment that know their target demographic, as well as those that are capital efficient within their business model with an equal balance between company spending and investing. Kristin Gunther’s company spends a substantial amount of time performing due diligence on each company they invest in. She mentioned Revolution Growth recently spent more than three weeks looking into a Chicago-based company that received a valuation of about $2 billion. High valuations can scare away potential investors; entrepreneurs should focus on company performance instead of getting the highest valuation possible.
As with any relationship, trust between the investor and the entrepreneur is paramount. Blu Venture Investors only invests in companies where they can add more than capital; they want to be a part of the decision making process internally and have complete control of their invested funds. Regardless of the various opinions the panelists had regarding capital control, each agreed that referrals are their preferred source of new business, which is key in a marketplace that typically accepts one to two percent of the deals they come across.
As an entrepreneur ready to acquire venture capital funding, take the advice of the professionals before embarking on your journey.