2015 California Society of CPAs
Startup Business Conference
I recently moderated a panel on fundraising for startups. The panel was part of a California Society of CPAs conference which was a CPE event for CPAs. The panelists were:
- Mark Straub, San Francisco, California Venture Capital & Private Equity
- Steve Goveia, Global Head of Strategy and Business Development for NCORD Healthcare
- Benson Yeung, Lifetime Entrepreneur & Non-Linear Thinker, San Francisco , Information Technology and Services
- Abram Kottmeier, CEO at Grow Huge Inc., San Francisco Bay Area Internet
A couple things really stood out to me. First, in an email discussion a few days before the event Abram told me that he is always pitching. The result of this is that when he’s ready for funding he already knows who is a good fit to fund a particular type of business, and how to approach them to streamline the process. Abram is a little more outgoing than I am (this is an understatement), but the advantages of his approach are clear.
If you’re pitching and the questions are very broad, you’re at the less-fundable end of the stack ranking
The second gold nugget was a deeper description of a process smart investors use when evaluating a new and popular startup concept. When several startups approach a fund with similar but cutting-edge (and therefore relatively unknown) businesses, the investors research the teams and their approaches for the purpose of stack ranking them. They claim to be very good at this, rarely getting the companies out of order. Then they invite the companies to pitch in order from least fundable to most fundable. The less-fundable teams educate the investors so that by the time they get to the more-fundable teams, they understand the industry, market, and technology and can ask deeper questions. If you’re pitching and the questions are very broad, you’re at the less-fundable end of the stack ranking.
Fiction v.s. Reality
We also talked about the difference between what you see on Shark Tank and the reality of startup fundraising, the importance of telling a compelling story, and how VC has changed since the mid-90s. The panelists were all very knowledgeable and I enjoyed talking with them.