A. Alastair Mitchell writes:
It’s becoming increasingly difficult to raise venture capital (VC) in the UK. Despite the government’s best efforts to improve it, the environment remains tough and there is a lot of competition from companies all looking to secure funding for growth.
The challenge is to get your company noticed above all this noise. If you can convince a number of high-profile people that what you are doing is a great idea – and you have the courage to get out there and talk about it – your credibility will increase.
One of the best tips I can give you is to attend as many networking events as you can. They are great for meeting with venture capitalists (VCs) and also provide an excellent opportunity to meet with other entrepreneurs.
Entrepreneurship is like an addiction and many people will have been through the mill a few times and have a great contacts book of investors. Talk to them about your business and mention that you’re looking for funding. There’s every chance that they will know someone who might be interested.
In keeping with my networking advice, ensure that you use Linkedin to stay in touch with contacts. You can then work out who can connect you to any interesting VCs and ask them for a personal introduction by email.
Another tip is never, ever pay to pitch for funding because great VCs don’t attend the kind of events that encourage this practice. When meeting VCs, ensure that you know your metrics inside out – customer acquisition cost, churn and lifetime value. And make sure you have solid justifications for any projections. In addition, remember that you
are interviewing the VC just as much as they are interviewing you. You will have to work with this person and company for three to five years, so be certain that your ambitions are aligned with theirs. Good luck!
Alastair Mitchell is the co-founder of collaborative working software-as-a-service platform Huddle. The business recently raised a total of $10.2m in venture capital funding. http://www.huddle.net/