Investor Insights

IDEA hosted our biannual Investor Insights event on Wednesday, November 16 on Northeastern’s campus. The event welcomed a panel of Venture Capitalists and Angel Investors for a dynamic discussion and inside look at the investing industry.

Our panel of investors included Dayna Balcome Grayson, Principal at North Bridge Venture Partners; Lee Hower, Co-founder of NextView Ventures; Joe Caruso, Founder of Bantam Group; and Wan Li Zhu of Fairhaven Capital. (Click here for full biographies.)

The audience included a large number of entrepreneurs who either have or are planning a venture. They were able to ask the panel a variety of questions throughout the IDEA moderated discussion, focusing on early-stage venture funding. The event also offered valuable networking opportunities in a comfortable environment with light refreshments.

In case you missed the event or are simply looking for a recap, here is a summary of the questions and advice offered by our panel.

What is your opinion on east coast vs. west coast investment?

When asked about the best geographical location for investment opportunities, our panelists agreed that there is no straight answer in terms of whether the east coast or west coast is more profitable for start-ups.

“It is difficult to raise capital everywhere,” said Hower. “You just have to go where there are smart people in your industry.”

Grayson and Caruso agreed that the focus should be less on location and more on business, specifically on building your team. “Ask yourself where it is easier to recruit the team you need, as well as where you can most likely gain the most customers,” said Grayson.

Zhu added that you should consider the ecosystem you want to be a part of when deciding where to base your business.

Do you have any advice for first-time entrepreneurs trying to build a business?

Grayson communicated that a fresh perspective is the best thing that young entrepreneurs have to offer, as long as you learn as much about your market as possible. She suggested finding mentors and advisors that have some experience and making them a part of the company.

“Young entrepreneurs are often too eager to start something completely on their own,” said Grayson.

Going off of that, Hower stated that entrepreneurship should be thought of as a career path. He suggested getting involved in a young business or startup first, and then starting your own business when you discover your passion.

“Wait until you feel that you can’t not start a company,” agreed Caruso.

Zhu recommended analyzing startup business model rigorously and critiquing your own model from a broader level.

What made you want to become entrepreneurs?

“Know who you are,” said Caruso. “Don’t do it for any other reason, such as money or ‘coolness’ factor.”

“Not everyone is an entrepreneur,” said Grayson. “There’s something that exists within… Looking at myself, I love risk,” she said.

Hower shared that “for [him], it was simply the process of elimination.” In other words, he experimented with various other career paths first and found out what he didn’t want to do.

Caruso commented, “If you have to ask yourself, ‘should I be an entrepreneur?’ Don’t.”

Do you have any advice for building a team?

Zhu mentioned the importance of bringing in skill sets that enhance those of the existing team and are non-overlapping. “Note which skills you have and which ones you need,” he said.

Grayson suggested having a well-rounded network that includes at least one person who has started something new before. “Take lots of advice from various advisors, but know what purpose each piece serves,” she said.

Caruso agreed, mentioning that you should surround yourself with individuals who have been through a variety of experiences.

“Picking co-founders is extremely important to the success of a company,” said Hower. “Most great companies are started by groups of people, not just one. But it is important to choose wisely.”

Is there a specific section of the business plan on which you place more emphasis?

Grayson said that having an “A+ team” is more important than anything. Then comes “size of market” and “technology.”

Zhu agreed, adding that “competitive landscape” is also heavily weighed. “It’s not that competition is bad,” he said. “But if there is too much competition it limits what you can create.

Caruso said he is most impressed when a venture’s “executive summary” is stated in a “crisp, concise manner.”

Hower emphasized that the process of business planning is more important than the document.

“They’re investing in your ability to figure it out,” added Grayson. “They know you don’t have all the answers.”

How do you respond when you hear that someone wants to build a “social network?” Is it a turn-off?

Hower responded, “it’s not necessarily a turn-off, but too many buzz words can be seen through very easily.” He added that the ability to concisely communicate what you want to do without buzz words is extremely powerful.

How would you feel about investing in a company if you didn’t have experience in the particular industry?

“Angel investors have a wide range of involvement in their investments, said Caruso. “Sometimes they serve as mentors to ventures, while other times they have little to no involvement. It all depends on the investor.”

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Stay tuned for information regarding our next Investor Insights event coming this spring!

And as always, follow us on Twitter @IDEANEU

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