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Raising Capital: From those who know

Last week, I attended an event called “Raising Capital: The Art of the Deal,” sponsored by Bank SNB and the Austin Chamber of Commerce. The event’s keynote speaker was businessman and entrepreneur Joel Trammell, who has shepherded several companies through various funding rounds, beginning with his startup Prodigy all the way up to Khorus, his current software management firm.

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Buzzing around the Bank SNB lobby were entrepreneurs, most of them male, eager to hear Joel but just as excited to get some facetime in the breakout sessions with firsthand veterans of the funding game, including:

  • Jason Seats of Techstars Ventures, who ran a roundtable on the art of the Series A round. He explored challenges early-stage company leaders face in deciding whether they need a bridge loan or a full-blown funding round and if they’re even capable of securing a large round under current circumstances, even for those who have products ready for market but who have never asked for funding in their careers.
  • Claire England, executive director of the Central Texas Angel Network, who led a group focused on the seed round: how and when to do it, what to communicate and whom to approach.
  • Travis Brodeen, co-founder and CTO of Newchip, who examined of crowdfunding as a possible proving ground for companies to show their offerings, teams and narratives are attractive to individual investor from the outset.
  • Mike Varozza, owner and director of Waterloo Swim School and an Olympic and NCAA athlete, who talked with business owners seeking his expert opinion on how to secure a small business loan to catapult a company forward. Mike and his wife presented their original business plan to more than 22 banks before the 23rd said yes. Today, they are a thriving swim school/center with a long-standing banking relationship they can count on.

In each group, discussion explored these overarching challenges:

  • How to find the right investors;
  • What to prepare to present to investors;
  • How to honestly assess whether your achievements thus far are impressive enough to appeal to new investors;
  • How to recognize when potential funder might not be ready for the stamina game and how to diversify investors based on their experience and likely commitment to the company’s long-term development.

Another pressing question revolved around when to bring marketing and PR into the mix. We heard repeatedly that it’s essential to have a communications expert on-hand from Day One to work with company executives to build the brand and find new and creative way to tell its story. It’s a piece of advice we here at Red Fan agree with whole-heartedly. Many startup execs mistakenly assume it would be too expensive to involve such a strategist early on. And yet, at every twist and turn in my 25 years of public relations experience, I’ve witnessed confident businesspeople with great products and services lack a story and strategic plan for raiding the funds they need to properly scale.

The meeting reminded me we all have our strengths, and knowing what you are not good at is as important as knowing where you excel so you can bring the right complementary partners into the fold from the start.

I’ve created a special offering that we extend to select entrepreneurs each quarter. Read about it and let us know if you’re one of them.

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