“Can you find me the right investor?”
“What are the chances of success?”
“What are the odds of finding an Investor for my Company?”
I am asked these questions all of the time as if finding investors for companies was like throwing darts at a dart board; if you hit the bull you get funding, Right?
Well not quite. In this blog piece and the accompanying video, I will try to share with you some of the complexities in the funding process. I want to try to demonstrate that building a systematic funnel is much better than throwing darts!
Lets start by looking at some statistics from Crunchbase. This free online database lists over 100,000 companies and over 30,000 funding rounds. Crunchbase also shows us that there have been literally thousands of Seed Rounds, Angel Rounds and Series A, B and C rounds. Furthermore over 9,000 funding rounds are unattributed.
In our research over the past decade, we have identified over 1,200 investors in the UK and this dataset only has a small number of Angel and High Net Worth investors. We are predominantly talking about funds, networks and family offices.
So where do you start?
In the video I walk through a series of factors that need to be taken into account when trying to select investors.
These include:
- Investor Type
- Sector
- Stage
- Funding Round
- Deal Size
- Risk
- Geography
- VC Portfolio
- VC Specific Odds
- Investment Criteria
- Deal Criteria
- Process
- Documentation
- Term Sheet
- VC Deal Flow
- Conflicting Interests
Unfortunately, finding the Right Investor involves kissing a lot of frogs!
I do not believe that there are any short cuts, they take too long!
I hope you find the video useful and if you want to know more or to discuss any issues I bring up, you can email me at jbdcolley[at]aol[dot]com or contact me through the blog.
You can also download the slide deck from Slideshare at http://www.slideshare.net/jbdcolley/can-you-find-me-the-right-investor-5-oct-2012
