Raising capital? Yes, it’s what you know – but who you know can matter too.
If you want to raise capital, you need an introduction to the right people.
Just before Christmas I interviewed one of these – Bob Christiansen – about what he looks for when entrepreneurs are pitching to his company.
Bob was a founding managing director of Southern Cross Venture Partners and he was a general partner and member of the investment committee of the venture capital firm Allen & Buckeridge for eight years.
He was a director of several portfolio companies, including eServ Global, Wedgetail Communications, VaST Systems, 8020 Software, Fultec Semiconductor, Mantara, Xerocoat and ActiveTorque.
Bob says getting an introduction is the single most important step to get in the door of investors. “It is rare that a random proposal gets funded,” he says.
Bob sees introductions as part of the filtering process. If one of his colleagues or friends is putting forward an entrepreneur, then they must think that Bob may benefit from the introduction. This adds a lot of weight to the process.
Here are his tips on getting an introduction:
- Find someone who the investor knows and who is credible. This will take you a long way. It will most likely get you to a meeting.
- The person could be another entrepreneur who has pitched to the investor, one of his friends or business colleagues or a supplier that the investor knows.
- Go to every networking event where you may meet investors; it will pay off. Investors are much more likely to agree to a pitch if they know you. You’ll also get to talk to investors to better understand what they are like as people. This is great information when getting ready for your pitch.
A couple of other tactics to help with your introductions:
- Appoint advisers who can provide you with these introductions. Seek out people who have successfully raised capital and are well known to investors.
- Find out who’s who in the investment community. The Australian Venture Capital Association holds lunches in most capital cities. Get on their list so that you get an invitation – they are not exclusive events. The AVCAL website will help you.
- Buy the book, The Australian Venture Capital Guide by Victor Bivell.
- Talk to your State Government about events they may be hosting
- Get on mailing lists so that you know what’s happening in town.
Now is a great time to get started on your networking. In a few weeks the round of seminars, workshops, lunches etc will start. Make sure that you know what’s on in your town.
These events don’t cost a lot of money and you will be surprised who you meet.
Good luck with your networking.
(I’ve selected one issue that Bob raised, but if you’d like to see the whole interview then click here.)
Gail Geronimos, is the founder of Achaeus, which helps entrepreneurs develop their businesses and she has just started a new site www.pitchingtoinvestors.com with tools and tips about how to develop killer presentations to raise capital.
To read more Gail Geronimos blogs, click here.