Entrepreneurs are some of the most passionate people in the world. They care deeply about their ideas, believe wholeheartedly in their company and are extremely motivated to succeed. These are all excellent traits to have, but that passion can sometimes lead to tunnel vision, which can hurt your chances of securing funding. In my experience meeting teams and listening to pitches, I’ve noticed a few things that entrepreneurs commonly overlook or underemphasize. Because of this, I’ve come up with four areas to focus on to increase your chances of securing venture capital.

Mike Wisniewski
Investment Associate
Connecticut Innovations

1. Be a Student Rather than the Smartest Person in the Room

No matter the industry, it’s beneficial to develop relationships with people who are smarter and/or more experienced than you. Even if you’re the world’s foremost authority in your field, there are people who you can learn from. This especially rings true when it comes to entrepreneurship. It’s important to get out of the lab, or office and reach out to mentors, subject matter experts, and potential customers. These externals can not only help validate your idea but can also become team members or board advisors that will help you understand customer pain points, formulate strategy and structure your business model. They may even contribute funding.

Tip: Beware of “mentor whiplash.” You’ll have several business assumptions to test along the way and you’ll receive advice from multiple perspectives. Some of the advice may be contradictory and overwhelming. You should listen to all of it, but it is your job to synthesize the information and make the call.

2. Build a Strong and Diverse Team
Investors value a strong team just as much as they value your idea. Your team should be one of the main things you pitch to a potential investor. Are they experienced company builders with the necessary relationships? Experts in their field? Have they been there, done that? If not, it’s time to build. Where do you find these people? If you’re embracing mentorship and building relationships, the answer should be obvious: your own network. Building a team from your own network may reduce risk and increase the likelihood of success.

Tip: Know thyself. Networking is not always a strong suit for technologists but typically is for experienced CEOs. If your networking skills are weak, you’re going to need to either develop them or bring someone on board to do it for you. This is important not only for building your core team but also for developing outside partnerships and collaborations. Partnerships are one of the core building blocks in a typical business model, and, if built correctly, will create value for
your company.

3. Do your Homework

If you’re fortunate enough to pitch a VC or angel, don’t blow it! Doing your homework really shows. I always appreciate when the entrepreneur knows the business and slides inside and out and is prepared for Q&A. Anticipate and research common questions that VCs ask and be ready to answer them.

Tip: Know the investment philosophy of the VC you’re pitching to. All VC firms have distinct missions, areas of expertise and industries of interest. Know the philosophy and speak to it during your presentation. In the same vein, know how the VC typically invests. How much do they usually invest per round? Do they prefer to work with other investors? What stage do they typically invest in? Understanding these things will help form your expectations before the pitch.

4. Deliver on the Opportunity

During your pitch, make sure you cover all the bases when it comes to your business. Come prepared to talk about your team’s experience, the technology and competition, your business model and financials, the realistic size of your market (and if it’s growing) and your go-to-market strategy. These things should all be a part of the story in support of the ask. With that, VCs will consider risk factors. Is there anything you offer that might mitigate risk? Things like experience,external market validation, another investor at the table, or significant sweat equity and skin in the game from the core team are all very helpful.

Tip: Hone your pitch. When it comes to delivery, I like a mix of passion and expertise. Confidence and charisma too, but don’t go overboard. The same goes for your expertise –do not get into the weeds of the technology unless asked. The best pitches are concise and underscore how we can work together and mutually benefit. After all, it is a partnership.

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Bar Side Banter with Eric Knight.

Katelyn: Let’s chat about why someone would want to be an entrepreneur?

Eric: I find many people want to be empowered, they want to see if they can do something themselves vs. working for someone else. Often, they just want to see if they can birth an idea from start to finish.

Katelyn: Here at innovate Hartford we are a co-working space, I know that you’ve worked in shared spaces before. So, what is the best part for you about working in a collaborative space?

Eric: It’s the comradery of everyone. Even though people are working on separate projects there is a buzz, a group effort happening. Typically, most startups have common problems and challenges, in a shared space they all become like an advisory board for each other. I think there is a very powerful element that happens very organically in a co-working space.

Katelyn: In keeping with that same theme, why do you think people are starting to abandon the traditional cubical based work environment?

Eric: Cubicles are a nothing more than little boxes, like a cage but worse than a cage because you can’t see through them. In co-working, it’s open and again, there’s that natural buzz that is always happening and people are talking, phones are ringing and things are happening and I think there’s a natural stimulation that it’s happening. It’s very unconscious and very organic and fuels creativity and innovation. I think moving away from the box-like structure is very helpful.

Katelyn: I know you’ve probably seen a lot of startups fail. What is the best piece of advice you have for those just entering the startup world?

Eric: Number one is to find a good mentor. Just having someone who has experience in that field. Which leads to number two is don’t try to reinvent the wheel. Don’t try to figure it out yourself. Find someone who has experience so you’re not trying to develop the process yourself. And then there are some great books I recommend to anyone who is thinking about a startup. A Lean Startup is the bible for all startups. It is a great book and learning tool. I highly recommend that. A weekend read is highly transformational. Those are the types of things all startups need: education, don’t reinvent the wheel and work with a mentor.

Katelyn: Where can folks go to find the list of next steps they need to do? They have the idea, they have the business plan etc.

Eric: There is no manual to do this. The best thing is to meet with a mentor. Because that person in one meeting in a half hour can learn a couple of books worth of information. The mentor will ask where they are in the business spectrum. If they just try to find things on YouTube or Wikipedia they can get lost and you can’t guarantee the quality of that information.

Katelyn: How does one go about finding a mentor?

Eric: I usually refer them to CTNext.com. It’s a self-serve resource directory. They will fill out where they are in their project which will then connect them to a mentor. Single easiest point to doing it. There are a few things people should know, very important. Usually, a company comes in with what they think is a specific need. For example, we need funding. Through our discussions, we find that funding isn’t what they need. They aren’t even sure what they need. We start looking and begin peeling things back. And then they realize they have a few more things to do first. The instinct to look for money is what drives companies but is often NOT the next step. Also, companies come in a say ‘we need to build a website’ or ‘we need marketing.’ I say, that is great but where are you in your business process? Have you created your business road map? Yes, logo creation is fun but you need to have that business foundation first to make it successful. In many cases, the entrepreneur process is out of order. I help them understand the order that will make them the most effective.

Katelyn: Speaking of order, how important is market research? A staggering challenge is someone who has come up with a new widget and they’ve shown it to their friends and family and they think people will love and buy it. But they haven’t done any market research to show how much someone pays for the widget? Did you ask if they would use it? People need context around your widget. It is import to determine if there is really a market there for their widget. It needs to be in the proper order. Just because your friends and family love it, doesn’t mean it will sell well in the market. Especially if it costs $5 to make but people will only pay $2 for it.

Katelyn: How do startups get that data?

Eric: I recommend using a focus group, survey monkey or some cheap research. A cool testing tool is Facebook ads, spend $10 and to see which messages in the ads drive traffic to the website. You’ve spent $10 and you can see what messages are resonating.

Katelyn: How does one get into the mind of an Investor?

Eric: I recommend a book called Angel Investing by David S Rode’s, it helps companies understand the mind of the investors. It only takes a day to read.

Katelyn: A lot of folks think you must be in the middle of a shark tank type situation to get funding. What are the steps someone would want for investment?

Eric: I find a lot of companies that are looking for investment are not ready for investment. They need some business traction because they don’t have any sales. Without proper fundamentals in place, it is almost impossible to get investment money. First, try and make some money with the business they have. It will help prove the business model and to also generates revenue that you can put back into the company. That provides data that you can show investors.

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Innovate Hartford is the place where investors, mentors, entrepreneurs and yogis meet

By Katelyn Morgan

Co-working and shared office spaces are everywhere. They are a staple in New York City, San Francisco, Boston, London and Paris. And now Hartford has one to call its own.

Imagine a working environment open 24/7 where you can sit on a plush, soft couch with a locally brewed IPA resting on the table next to you as you develop the newest smartphone app or robot. The smell of freshly baked chocolate chip cookies wafts through the air as you code.

A solo-preneur sits in the glass conference room across from you, on the phone pitching his/her latest idea to a company overseas. A team of techies has reserved the classroom, and are teaching young teens coding and hacking skills.

In one of the reserved seats a photographer chats with a seasoned graphic designer (whom he just met that day) about how to upgrade his website.

There is a buzz in the air. A feeling of excitement, creativity, and collaboration. It is a feeling Hartford hasn’t felt in a long time.

Innovate Hartford, with its reserved seats, traditional membership and reserved offices is 27,000 square feet of innovation. It has special amenities such as free coffee (think about the caffeine savings!) juice and snacks. Need a mouse? A notebook or USB drive? No worries, at the Honesty Market you can get what you need to work.

Here, you can be part of a multi-generational creative community where everyone can learn something from each other. Innovate Hartford is teeming with opportunity. If you’re working a 9 to 5 and you’re also plugging away (or really want to) on your own personal project, being a part of the new co-working community can provide amazing connections to the entrepreneurial world. And to be honest, connections can mean the difference between a good idea and a billion dollar company.

It can be mentally exhausting sitting in a cubicle all day or even worse a leaky basement or lukewarm garage. The loneliness and isolation can be slightly overwhelming.

The co-working space at Innovate Hartford is a thriving ecosystem for startups and is also a great environment for other professionals. Think about it. If you’re surrounded by 17 other people who are in the same boat, heading in the same direction, the trip isn’t so lonely.

At Innovate Hartford you have access to mentors, a wide range of business experts, a variety of 3D printers and prototyping machines, and even a yoga/meditation studio!

It is access to shared resources which has become second nature to millennials, however. Why? Many millennials graduated university/college in the middle of the recession. We then entered the working world to face an extremely tough job market — and this has made them cautious and, more pointedly, has led to a shift in behavior. For example, many millennials are putting off large purchases such as buying a home or car, even putting off getting married.

But how has this impacted the workplaces we are choosing? The sharing economy has shown itself as the answer — with shared transportation, accommodation and workspaces amidst the “chipping-in” economy.

Co-working spaces are no different. It is more of a co-movement. And you can be in the middle with connections to co-founders and interns and the ability to have a “speed-dating” like experience with well-established tech companies. It is all right downtown at Innovate Hartford.

For more information call 860-785-6510 or email [email protected]

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