Katherine Olives
On February 9th, some of NYCs leading investment experts joined us for a panel event, How to Fund Your Startup, where they shared tips for raising startup capital. Panelists included Jaishan Wu of DormRoomFund, an organization that invests specifically in student-run startups; John Vaskis of IndieGoGo, the popular global crowdfunding space; Jonathan Hakakian of SoundBoard Angel Fund, a group of 30+ angel investors; and Christopher Reim of the Community Development Venture Capital Alliance (CDVCA), a network for social impact investing. The panel was moderated by award-winning journalist and author of Locavesting, Amy Cortese. She is an expert on local, citizen-led investment practices. Together, the team of five experts shared their wealth of knowledge and offered resources to our Zahntrepreneurs and other CCNY students in attendance.
Many of our Zahntrepreneurs are still operating in an ideation stage, or are still experimenting with prototypes. Still, they need to learn if and when they need to start raising capital. The first step is identifying the motivation behind the company, or envisioning where you want your company end up. Some investors want to see an immediate return on investment, others want to be part of the next 500-person company; you should be clear about whether youre going to build & sell or build & stay. Before raising capital, entrepreneurs need to know how their business is going to make money, and also have a structure for operational processes. For product-focused businesses, you must figure out the entire manufacturing chain before seeking capital; you never want to be in a situation where you cant fulfill orders.
When its time to seek investments, entrepreneurs have many options. They can look to traditional venture capitalists, who usually invest in startups after theyve already received a few rounds of funding. Angel investors will go in earlier and invest in the seed-level funding stage. However, most venture capitalists and angel investors are interested in making the most out of their return; they need to see an eventual exit. Another option for startups is crowdfunding, where the common public invests in a startup. When it comes to crowdfunding, B2C ventures with a tangible product tend to do better than B2B ventures. Finally, startups can also go after peer investments.
Our panelists also talked about the role of social businesses in the investment space. To many investors, social impact enhances the value of a business. The idea of social impact is to attract private money into public objectives, said Chris Reim. Social impact makes your business better.
So where do our Zahntrepreneurs start when it comes to seeking investments? They should start building a strong team. Jonathan Hakakian reminded us, At the end of the day, were trying to help entrepreneurs start businesses. You know You dont want to fund someones business if you dont want to talk to them. Build the relationship like you would with any other relationship, it takes time, its long term thing.
For more advice from leading investors, join us next week for an intimate discussion with philanthropist and entrepreneur, Bert Brodsky. Hell talk about how he transformed the healthcare industry as a regular kid from the Bronx. The discussion will be led by Kim Wales, an expert in crowdfunding. RSVP today.