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Expert interview: 13 questions on Funding & Pitching (part 2)
Andrea Cockerton, founder of Mudhut Consulting, the Cambridge-based venture market consultancy works with entrepreneurs of both start-ups and more established SME’s on pitching for business critical investment or deals. For The NextWomen she answers questions on funding & pitching. This is part 2.
Is it true that you can better ask for more than you need than exactly the amount or less?
In my view you need to ask for the right amount of money for what you realistically - with ambition - believe your business can achieve and needs to do so. However, you need to be canny about the fact that market forces, economic trends, competition and so on and so forth can all impact on your targets. An investor needs to see that you are not blinkered and are considering all these things - that you are focussed but flexible. Having said all that, often companies do seem to underestimate exactly how much
money they will need…
Is there a rule for what an angel investor seeks as shareholding?
Not to my knowledge, but of course they are likely to want as much as they can get! Generally companies want to give away less, and investors want more than is on the table. Beware - if you have a ludicrous valuation, investors could well walk away without even discussing it. Be sensible and
get practical advice. There are many different ways how an investor valuates a business.
Is money more or less important than expertise?
They each have their value, and at times exceed each other in importance. But you can do without neither.
How many times should you pitch before you are successful?
Deals: Emily Olson’s Foodzie raised 1 million USD
As the number of women funding their business startups with VC capital is increasing, but still low compared with the number of women starting companies and the number of funding deals, we are always happy to point out funding deals of women led companies. Last week, Emily Olson, chief-Foodie and co-founder of San Fransisco based Foodzie raised 1 million USD capital for her marketplace of specialty foods (sort of the Etsy of artisan food producers). Investors are Jeff Clavier at SoftTech VC, First Round Capital, and angel investors.
Emily pursued the idea and started the company as part of the 2008 TechStars incubator program, together with Nik Bauman (CTO) and Rob LaFave (Business Development+ Design). At Techstarts it basically meant for them that they got 18,000 USD (6,000 per founder) as seed capital to start a business and the chance to pitch their startup after a mentoring program to 150 angel and VC investors. In return Techstarts got 6% equity. Executive Director David Cohen said that Foodzie had the progress, passion, and dedication to get into the program, where last years almost 400 companies applied. Jeff Clavier, now an investor in Foodzie was one of the mentors of Foodzie in the program.
A video with Foodzie:
Interview: Divya Gugnani, VC turned entrepreneur
Founder Divya Gugnani
What is your big announcement?
The big announcement is that we, Founder and CEO Divya Gugnani and COO Caroline McBride, launched culinary site BEHIND THE BURNER and we are open for business. We beta launched on Oct 30th, the home page is now open for public access.
What inspired you to launch Behind the Burner?
Throughout my years of cooking and dining out, I became privy to so many tricks of the trade; hot tips from sizzling chefs and inside scoops from restaurateurs. With Behind the Burner, I’ve reached out to those culinary visionaries to share their skills with the world. My vision for Behind the Burner was to bring authority and expertise to the food media landscape. The general public can now learn the tips tricks and techniques used by the authorities of the food and wine world. Even better they can purchase ingredients and tools recommended by the experts at off retail prices via our promotions.
How was Behind the Burner funded?
I have been a venture capitalist for years and funded the business myself until I raised a $500K angel round. The investors are individuals from hedge funds, venture captial funds, private equity funds and the law firm Wollmuth Maher Deutsche. I only wanted to raise $350K and got interest for $720K in a week. I’m glad I took the extra funding as the financing market dried up after I raised my round!!
What is the business model?
Our business model is to provide educational and entertaining content (videos and article) and couple it with commerce specials. See Behind the Deals- featured promotions and permanent deals. We offer ingredients and tools at off retail prices and get a share of the revenue from transactions completed. We are running e-commerce revenue now and have additional revenue streams planned for the coming months. We are not profitable yet!
How much of foodie are you?
I acquired a taste for my future in culinary arts as a child. I grew up in a household where food was the center of existence–our kitchen was the heart and soul of our home. Read more
Female Heroes Interview: Eileen Gittins
Every week we publish an interview with one of our female internet heroes. MEET interesting women, READ about their WORK, THINK about how they PLAY the internet industry and see how you MATCH them. Be inspired! This week: Eileen Gittins.
Eileen Gittins
Eileen is a serial entrepreneur of the truest kind. She has set up a number of web companies, including Personify, an ecommerce data mining and analytics company and Verb, a context-based search engine company. Her current company Blurb was founded from Eileen’s passion for photography and from the realization that the idea for Blurb was “the idea that doesn’t leave you, that comes back to you while you are under the shower.” The result is a web company that allows anyone to print a book, whether they need ten or a hundred copies. More importantly however, it is a company to which many can relate; artists, families, photography hobbyists, and even Eileen’s mom. Eileen: “My mother used to say: ‘Eileen is in the internet.’ Now she says ‘Eileen runs a company where anyone can make a book.’ There is something very nice about doing something so concrete, something people get.”
Thenextwomen talked to Eileen about why founding a company from a passion is so fulfilling, her success, her mistakes and what she learned from them.
· How did you come to set up Blurb?
Top 50 Women in Mobile Content
ann williams, founder okto
As Sarah O’Keeffe of Bango received one of the Mobile Entertainment Awards 2008, the celebration of the 2008 Mobile Entertainment magazine’s list of the Top 50 Women in Mobile Content is continuing. In view thereof, we publish this list and point out some of the female internet heroes on it, i.e. the founders, CxO’s and investors.
Carole Faure (France) Founder and CEO, Kaolink, the French developer, which works closely with Gameloft.
Sabine Irrgan (Germany) Founder and COO, GoFresh. Over one million users signed up to itsmy.com, its an ad funded social network.
Louisa Jackson (UK) Founder and Director of Content, VidZone, the UK music and video distributor, which now takes content to 140 services globally.
Ann Williams (Brasil) Founder and CEO, Okto, a powerhouse in the huge Brazilian content market offering SMS and WAP services to operators, brands and financial institutions.
New Venture Business Plan Competition
new venture competition
New Venture 2008, the foundation of Management Center De Baak has started: the annual competition that offers anyone the chance to turn an innovative business idea into a solid business plan. A jury of 21 investors (of which 1 woman, Anne Portwich of Life Science Partners) will decide in 3 rounds. A total € 100.000,- of prize money to be won.
% of women in US venture capital
The venture capital industry in the US is slowly shifting toward more diversity, according to a new survey by the National Venture Capital Association (NVCA) and Dow Jones VentureWire. Of the 500 VC professionals responding to the survey, 25 percent were women.
14 percent of the managing directors and venture partners are women. Women are most prevalent in the biopharmaceuticals sector where 32 percent of the respondents are female.
Finance: Pitch your story
Julie Meyer, venture capitalist at AriadneCapital and female Internet hero, has an advice for entrepreneurs who are raising finance. In her column in City A.M., a free financial newspaper in London, backed by Derk Sauer and Boudewijn Poelman, she writes that “to secure investment into your company, you have to do two things”:
- Tell a great story where the entrepreneur is the hero and wins.
- Remove systematically all the reasons why the investors won’t want to invest.
If the entrepreneur pitches right, then the investor understands the risks and the strategy to overcome them and in the end will be seduced!
The above you may keep in mind, when you apply to pitch your story on cmypitch.com. By using video, the website aims - among others- to connect businesses with investors. Through video, businesses can present their ideas and investors can get an instant feel for the people behind an idea or a company. Still in Beta, the company will officially launch in the fall of 2008.
In the meantime, think about your story!
American internet heroes
The US has leading the way in showing women leading or funding internet companies. In compiling our database of female internet heroes, we come across a lot of American entrepreneurs, CxO’s and VC’s. A lot of these women have started in Silicon Valley or have close ties to the area. We will list a few of them today:
Esther Dyson is an internet visionary and investor and are already around a long time. She is primarily investing in start-ups and guiding many of them as a board member. She was visionary with positions at - among others - Flickr, Delicious. She on the board of 23andme, of co-founder Anne Wojcicki. She invested also in lesser known companies, such as eTribes, a British (once) startup that provided identity management and community services, but now seems to be more a photo sharing site. She sold EDventure Holdings to CNET Networks in 2004. Recently she has been investing mostly in online services, health care/genetics, and space travel.
Other women that have been around are Meg Whitman, ex e-Bay and Jean Armour Polly, founder of netmom.com, and the first woman elected to the Internet Society board of Trustees. She is currently working on connecting rural libraries to the Internet. Read more
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