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Venture Capital

7 VCs give founders their best fundraising advice

One piece of advice? If your idea doesn’t change the world, you’re not thinking big enough to go after venture.

From left: Heather Redman of Flying Fish VC, Michelle Goldberg of SoGal Ventures, angel investor Sarah Imbach, Corey Schmid of Seven Peaks Ventures and Amy McCullough of Trilogy Equity Partners (Kai Yau/ PitchBook)

It’s no secret that women secure a minute amount of venture capital funding compared to their male counterparts. In 2017, women-only founding teams raised just 2.2% of all VC in the US.

To increase that number, some firms in Silicon Valley and beyond have taken the crucial (and significantly delayed) step of hiring women as partners. Others have allocated funds to specifically back female-founded companies. And many women investors have come together to craft new initiatives specifically targeting underrepresented founders. In Seattle, the Female Founder Alliance (FFA), a rapidly growing private network of female founders and women CEOs, is igniting its own movement to support women entrepreneurs and increase the amount of capital funneling into female-founded startups in the Pacific Northwest.

FFA, led by local entrepreneur Leslie Feinzaig, recruited Seattle’s top women in venture capital to sit down Thursday with female founders for a panel and 30-minute one-on-one pitch sessions. Before the panel, PitchBook sat down with seven of those investors. Here’s what advice they had to offer founders, both male and female alike, looking to raise their first rounds.

From left: Maria Karaivanova of Madrona Venture Group, Lisa Nelson of Microsoft Ventures and Judy Loehr, a former venture investor at Cloud Apps Capital (Kai Yau/PitchBook)

Lisa Nelson, managing director of Microsoft Ventures

I always remind people: Be prepared and be focused. I had a call this morning with a founder who didn’t know their 2017 revenues. You want money from me, but you don’t even have the details about your own business? I have that happen a lot where the founder doesn’t even know the details. Know what you are going to the meeting for. Why go spend an hour in a meeting when it’s just not the right fit? [And] ask for feedback verbally—not on email.

Amy McCullough, partner at Trilogy Equity Partners

I think for all entrepreneurs looking to raise money, be very thoughtful of who you’re going to partner with. It’s a long journey. You’re taking other people’s money, and there are a lot of ups and downs with that. In this environment, where there is a lot of capital sloshing around, be picky about who you want your partner to be.

Sarah Imbach, angel investor

Make sure your idea is big enough if you’re trying to raise money. It’s very easy to carve your idea down to appeal to various advice that you get. If your idea is not big enough, you’ve got to maintain that big vision. The best way you know if your idea is big enough is if when you imagine it fully realized, the world looks different. If your idea doesn’t change the world on some fundamental level, then you’re probably not thinking big enough to go after venture.

Sarah Imbach (left) and Corey Schmid (Kai Yau/PitchBook)

Corey Schmid, investing partner at Seven Peaks Ventures

Have a strategy. You have got to be laser-focused with that roadmap ahead of you. Do your research. ... You have to get used to hearing “no.” You’re going to hear “no” a lot. Ask for feedback. Ask why. Hopefully, you get a VC or an angel that will be willing to give you really good honest feedback.

Heather Redman, co-founder and managing partner of Flying Fish VC

When I see an entrepreneur who’s already quit their job and throwing caution to the wind, and they’ve also attracted a team whose similarly doing that, [they’ve sold] the vision enough to attract [their] family, [their] team ... you’ve suddenly demonstrated to me that you’ve got the ability to sell and you’ve got practice selling your idea. When you come to me, you’ll already have proof of your ability to convince the world to follow you.

Gillian Muessig, CEO of Outlines Venture Group and co-founder of Moz

My advice would be to know your investor before you pitch. Not every investor invests in all spaces. if you’re pitching your consumer product to the IoT guys, it’s probably not close enough. You need to know who it is. Otherwise, you’re wasting people’s time. You can certainly give them your elevator pitch and ask them to refer somebody who does invest in your space, but, truly, that is what LinkedIn is for. If you piss off the people who have the capital, they talk to each other, and they won’t refer you. Be concise, be laser-sharp, and know who you are pitching.

Judy Loehr, former venture partner at Cloud Apps Capital Partners

If you don’t need venture, run the other way. There’s a difference between needing capital and needing venture. If you aren’t in a big enough market for venture, save your time. ... I see a lot of founders wasting time chasing venture.

Here’s more of our coverage of women in VC.

  • kate-clark-1.jpg
    Written by Kate Clark
    Kate Clark was a staff writer at PitchBook.

    A Seattle native, Kate attended the University of Washington where she studied journalism and international studies. She previously wrote about the Indian startup ecosystem in Bengaluru and freelanced in the Seattle area. Follow her on Twitter @KateClarkTweets.
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