This week, I’m moderating a panel at Future Forward 2011. If you live or work near the Boston area, I’d highly encourage you to attend. I’ve attended in the past, and the attendee list is top-notch. If you want to meet some of the best VCs and entrepreneurs in the area, it’s worth your time.
The panel I’m moderating is called “A, B, C, D, E, F, Uh-Oh: Investors Talk About the Challenges of Funding at Various Stages” and includes well-known local investors: Jonathan Seelig, Joe Caruso, David Beisel, and Eric Hjerpe (disclosure: Joe Caruso is an investor in Punchbowl).
It will be interesting to moderate this panel for a couple of reasons. First, more than one of these investors passed on investing in Punchbowl. Keep in mind that these investors are local Boston investors, so it’s not surprising that I spoke with them at one point or another. But it will be interesting to be on the other side of the table from them. I’m also curious to hear what they have to say about later stage investing — again, keeping in mind that one or more of these investors could invest in Punchbowl sometime in the future.
I sent the panelists an email to prepare them for our session, and I thought I would share the list. I plan to take the audience through the stages of investing from an entrepreneurs perspective. I’ll be very interested to hear about some of the objections that each investor has between each stage. After all, Punchbowl has raised a Series Seed, a Series A, and a Series B — and I might be the one needing to convince investors to put their money into a Series C.
Here’s the list I sent the panelists:
Seed stage investing:
– What are some of the structural things an entrepreneur can do prior
to raising seed funding that are deal killers for you? (think corp
structure, taking money from Uncle Joe with strange provisions — what
else?).
– What key proof points do you want to see prior to your investment decision?
– Is user feedback/engagement a requirement for seed investing or will
you invest on the promise?
Series A:
– What key metrics are most important to you to follow-on from Seed to A?
– What signals do you look for that might scare you off?
– Let’s talk about strategic investors: a good idea or stay away?
Series B:
– Financials: Does profitability matter when a company is raising a B?
Why or why not?
– Valuation: Revenue multiple or EBITDA multiple?
– How much due diligence do you require at the B? Do you just trust
the previous round investors?
Series C and beyond:
– Do you expect entrepreneurs to take money off the table at a later
stage rounds?
– How do you get new, outside investors to the table at these later stages?
– What can go wrong in later stage investing?
SWAMI SAYS: Raising one round of capital is really, really hard. Getting investors to step up to follow-on rounds requires knowing what motivates an investor to re-up. Come to Future Forward 2011 to learn more from investors who know.
Startup Swami 