At the Spring IDEA Investment Forum, a panel of experienced investors from the Boston area gathered to share their advice on a series of topics to help give NU entrepreneurs and idea of the process of (correctly) starting a business. IDEA CEO Michael Hans moderated the forum and took some questions from the crowd. Here’s what they had to say on some of the hot topics of the night.
Antonio Rodriguez — Matrix Partners
Jeff McCarthy — North Bridge Venture Partners
Anita Brearton — Golden Seeds
Roy Liu — Hercules Technology Growth Capital
Harry Keegan — Independent Angel
At the Spring IDEA Investment Forum, a panel of experienced investors from the Boston area gathered to share their advice on a series of topics. IDEA CEO Michael Hans moderated the forum and took some questions from the crowd.
On whether or not age is an issue…
Jeff: If you’ve got the right energy level, age doesn’t factor in. But I’ve found that the younger entrepreneurs have the fresher ideas.
Harry: The younger the startup the better the listener. I worry sometimes about those with more experience – they think it’s all up to them to solve the problem.
Antonio: We live in the post-Zuckerberg age. If you’re raising money from angels, play the part.
In other words: Younger entrepreneurs come into it with a clean slate – they see solutions differently than those with experience. Use your age as an advantage. In a time when some of the world’s biggest startup companies were created by undergrads, it’s okay to act your age.
On creating an Advisory Board…
Anita: Surround yourself with good advisors who want to spend time with you and on your venture. Think of it as an advisory circle, not an advisory board. Create informal relationships with these contacts and look to them when you need help. Find out who’s really interested and who’s providing real value before divvying up equity.
Jeff: Figure out what you are doing and what you need, then fill those voids.
Harry: Don’t put names on your board for prestige – they won’t give you the time.
In other words: Don’t go for the big names – build an advisory board of people who know the ins and outs of your venture’s industry and who have passion for what you’re doing. These are the people who are going to provide you with the most value.
On approaching investors…
Roy: How much homework has the entrepreneur done? Have they done their due diligence? Do they have great advisors who feel as passionately about their business as they do? These are some of the questions we ask.
Antonio: Where to go for money? Wherever you can get it. You have to show incredible proof that you’re a breakaway in whatever category you’re in, and big enough to be meaningful to investors.
Anita: Figure out who you want to be talking to. Engage with members of angel groups. Get to know them informally, even up to about six months before you pitch.
Harry: This is OPM you’re dealing with – other people’s money. Those people know exactly what it takes to make money. They want commitment, want you to listen.
In other words: Do your homework! The last thing you want to do is waste an investor’s time – or money. You’re likely to only get one opportunity to pitch, so you’d better blow them out of the water when you do. And if you’re not prepared, chances are you’re not going to do that.
On investors’ relationships with their startups…
Harry: I expect to hear from you every week, all the time. We want this communication and we want to know what milestones you’re hitting. We’re here to help you – it’s the value-added that comes with having an investor – so if we tell you to call someone, call them.
Anita: Make no mistake, we would never be a silent partner. It’s a marriage.
Antonio: There is never too much contact.
In other words: Investors aren’t going to be annoyed if you’re calling them to tell them you just hit a major milestone. In fact – if you don’t call them, they’ll probably be pretty mad. Same thing goes if you avoid calling them to tell them you aren’t able to hit a milestone. Whether the news is good or bad, they want to hear it on a near-daily basis, and they want to give you feedback. But if it’s the birth of a first son or a daughter’s wedding, it can probably wait until tomorrow.
On building clout…
Antonio: The downside to the Zuckerberg generation is that, without any working experience it’s difficult to be successful. Join a startup, network, gain experience.
Jeff: Establish a track record of success. That becomes very meaningful and something that we look for.
In other words: Get out there! Don’t just sit around waiting for something to happen. If you’ve got a startup company in the works, make it a side project. Join a more mature startup and get real firsthand experience. Not only will this impress potential investors, it will help you with your own startup.