Q&A: Dave Hendricks Talks VC Readiness and More Ahead of Panel Discussion
Dave Hendricks, Founder and CEO of Vertalo, will be moderating the panel discussion: “VC Funds: How to Get Funding for Your Blockchain Company” at CIS on Wednesday, April 10 at 2:00pm! The other panelists include Miko Matsumura (Gumi Ventures), Greg Gilman (Science-Inc), Thomas Lee (Fundstrat), and Scott Nissenbaum (Ben Franklin Technology Partners).
Earlier this week, we spoke with Dave Hendricks and talked about everything from what makes a startup “VC Ready,” to the types of companies that should seek VC funding.
What types of companies should specifically seek VC funding?
Companies that need operating capital to develop solutions to attack a large repeatable problem with a large addressable market are generally better candidates for VC money than businesses where consulting revenues, and people’s individual efforts are the primary means of revenue generation. People don’t scale – can you build something that makes money without your personal involvement? That’s VC territory.
When is a startup ready for VC funding?
Startups can generally approach VCs at any point in their lifecycle, but it’s generally understood that unless you are an entrepreneur with a track record – like an exit under your belt – you should wait until you have something more than a great idea. Even the smallest degree of execution – like a signed contract, MVP (minimally viable product) or some revenue makes your startup more ‘VC Ready.’
What are obstacles that startups face early-on that delay VC investment?
The Wrong Team, Wrong Problem, and lack of ‘proof’ points like client traction or revenues are usually the main impediments to VC Investment.
What is the most common reason for rejection?
Bad Pitches are the kiss of death. If you can’t tell a story about yourself and your connection to the problem, that is a good reason for rejection. Then there is also something known as ‘Founder-Market Fit.’ Even if it’s a great problem with a huge market, are you the right team to attack this problem? Do you look like you can execute?
What makes cap tables so crucial in the fundraising process?
When your company becomes successful and is sold for $1 billion dollars, the percentage ownership and the terms that any shareholder has will become very important. Once your cap table has been damaged with bad investors, or even worse bad terms, some investors will just walk away. This can happen early. It’s super important to focus on getting your core ledger, the cap table, right from the beginning.
If you want to learn how your startup can improve its chances at raising VC funding, come see the panel on Wednesday April 10th at CIS on the main stage! Come visit Vertalo.com & sign up for their informative and non-promotional newsletter – it’s read by many of the top VCs in traditional and crypto venture.