StartupNorth

Tag: startup

  • Fundraising, Valuation and Accretive Milestones

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    I keep having a similar conversation with early stage entrepreneurs about fundraising and valuation. “Do you think a $1.5MM valuation is good?” “How much should I be raising?’ Well, it depends.

    I’m finding more and more, the conversation about valuation is one that resembles not being able to see the forest because of the trees. Early stage entrepreneurs tend to fixate on valuation and assume product is the biggest risk at the seed stage thus defining product launch metrics as key metrics. Often, valuation and risk mitigation are tied together. And the milestones or traction metrics required to mitigate risk can help establish valuation. 

    Valuation

    Fortunately, valuation is a topic that others have covered. Nivi and Naval, on VentureHacks, have provided incredible insight into early stage fundraising over the past 5 or 6 years. The advice is often summarized, “as much as possible is especially wise for founders who aren’t experienced at developing and executing operating plans”. The translation means that founders see rounds of seed stage companies raising $4.2MM at what must be a huge valuation.

     “‘As much as possible while keeping your dilution under 20%, preferably under 15%, and, even better, under 10%.’ ” – Nivi

    You can make some basic assumptions about the valuation. Most seed stage companies should be looking keep dilution in the 15-20% range. The specifics will be determined in fundraising but you can start to do some back of the napkin estimates:

    You start to see a range for how much a company will raise at what valuation. The numbers aren’t set in stone but they provide a framework for estimating the amount valuation. As Nivi points out the difference between a seed round and “a Series A which might have 30%-55% dilution. (20%-40% of the dilution goes to investors and 10%-15% goes to the option pool)”. The more you raise early, the more dilution you can expect. The goal becomes managing the different risks associated with startup. You also see why raising debt early, which allows companies and entrepreneurs to delay valuation until certain accretive milestones, is attractive.

    “The worst thing a seed-stage company can do is raise too little money and only reach part way to a milestone.” – Chris Dixon

    So given the back of the napkin dilution terms, what are the milestones that you will need to hit in order to raise the next round.

    Raising the next round

    So you’ve raised a round, how much should you raise at the next round?

    I like the rule of thumb that Chris Dixon uses. “I would say a successful Series A is one where good VCs invest at a pre-money that is at least twice the post-money of the seed round.” The expectation is that companies are roughly going to double their valuation at each raise. This isn’t to say that a 2x increase in value is your target, it’s the minimum, the floor. The art of raising a round it to raise enough money to get to a significant milestone, and not too much money taking too much dilution too soon. So how do you define the milestones. The milestones

    “partly determined by market conditions and partly by the nature of your startup. Knowing market conditions means knowing which VCs are currently aggressively investing, at what valuations, in what sectors, and how various milestones are being perceived.” – Chris Dixon

    So part of the market conditions, i.e., raising money in Canada is different than raising money than in Silicon Valley, New York , Tel Aviv. You are measured against your peers, and this might be defined by geography of the company or the VC. Being connected with other companies, advisors and investors can help provide insight in to the fundraising environment. The second part is determined by the nature of your startup, but generally expressed as measures of traction. We’ve talked a lot about getting traction and what traction looks like to a VC.

    “The biggest mistake founders make is thinking that building a product by itself will be perceived as an accretive milestone. Building a product is only accretive in cases where there is significant technical risk – e.g. you are building a new search engine or semiconductor.” Chris Dixon

    Entrepreneurs tend to focus on the product early. This is usually because the product is something that entrepreneurs can directly affect. But the product risk, is may not be the  biggest risk that entrepreneurs need to mitigate early. The trick is figuring out which risk you need to eliminate to satisfy potential investors. And you can try to figure this out yourself, but I like to see entrepreneurs engage investors and other founders to get their opinion. The discussion usually is a combination of what other startups are seeing in the market place as milestones from investors (yay, market place data). Then you can work backwards the necessary resources and burn rate to reach those milestones.

    Thoughts?

    Additional Reading

  • Hiring a Growth Hacker on StartupNorth.ca

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    Did you know that we run a job board for startups? It does allow companies to reach an audience that is interested in startups.

    “Amar joined us 3 weeks ago after a long trial of hunting down and applying for the “Growth Hacker” position we posted on StartupNorth. We couldn’t be happier with his progress, hunger and efficiency. Over to you Amar!” – Michael Litt, Vidyard

    There are great stories of people find companies and roles like Amar Chahal (LinkedIn) and the Growth Hacker role at Vidyard. If your a looking for a new gig, go read about how Amar was hired at Vidyard. It will blow your mind how much he committed to the process. I’m actually shocked that no one has socially hacked our job board as a candidate, i.e., it’s not that expensive but you could pay to highlight your resume or portfolio, because it will only work once.

    Post Your Job

    Postings are only $25 for 60 days. Postings are embedded on StartupNorth.ca and all postings are shared on our Twitter account. For example:

    It’s a quick, relatively inexpensive way to post jobs to a targeted audience. Get a little bit of distribution and hopefully find candidates like Amar.

    We are open to discussion about how we can improve the Jobs Board for both candidates and companies. Got a suggestion for how we improve things? We are all ears.

  • ‘Small’ ideas are not the problem

    Editor’s Note: This is a cross-post (possibly some sort of reblogging) from Momoko Price’s blog originally posted on August 13, 2012. Momoko Price  is a web writer, editor and communications consultant based in Toronto. She runs a communications consultancy called Copy/Cat and frequently blogs about startup culture and web communications at http://copy-cat.co/.

    In a recent blog post called ‘Toronto is Broken’, Upverter co-founder Zak Homuth wrote that Toronto’s startup community suffers from an overabundance of ‘small ideas,’ implying that ‘thinking small’ is somehow intrinsically less valuable than ‘thinking big.’

    I’m not a web startup founder, but I am an entrepreneur and many of my clients are web startups. And as a writer, sometimes I can’t help but focus on how the wrong word ends up detracting from the soundness of someone’s argument. This is one of those times.

    So let’s clear something up right now: There is a world of difference between a ‘small’ idea and a shitty idea. Let’s please stop equating one with the other; it’s not helping to solve the problem (ie: a cultural aversion to creative & original ventures).

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    Zak isn’t the first person to complain about small uninspired ideas, and derivative product pitches certainly aren’t unique to Toronto. But trying to combat an epidemic of ‘small ideas’ by being ‘frighteningly ambitious’ instead is, well, not exactly great advice. Here’s why:

    1. ‘Small ideas’ can be built and launched more quickly.

    Creating a successful product involves much more than just the idea, or even the product itself. Testing, marketing, financing, selling, scaling, management — these factors will often end up playing a far more critical role in determining your startup’s success over the long run.

    So rather than worry about whether or not your idea is ‘big’ or ‘game-changing’ enough, why not bite off something you know you can chew now, whatever it is, and start getting some real-market experience as soon as possible? That way, you’ll actually know what to do (and what not to do) when that crazy, once-in-a-lifetime idea strikes you.

    2. Traction, not ambition, defines a ‘world-changing’ idea.

    I often help entrepreneurs structure and refine their pitch decks, and it never ceases to amaze me how frequently they include 5 or more slides about their idea or product, and none about whether the idea is actually taking hold with anyone.

    Meanwhile, most experienced investors don’t really care what your solution is, as much as they care about whether lots of people want it.

    A product or service doesn’t have to be complicated or even tech-based (as Derek Sivers points out in his popular ‘Ideas vs. Execution’ clip). The important thing is to gauge its market traction.

    After all, an idea or product can only change the world if people actually use it. In business, if your solution takes off, then it was a great, world-changing idea. If it doesn’t, then it wasn’t. Simple as that.

    Editor’s Note: This is a cross-post (possibly some sort of reblogging) from Momoko Price’s blog originally posted on August 13, 2012. Momoko Price  is a web writer, editor and communications consultant based in Toronto. She runs a communications consultancy called Copy/Cat and frequently blogs about startup culture and web communications at http://copy-cat.co/.

  • 5 Steps to an Awesome Executive Summary

    Editor’s note: This is a cross post from Massive Damage Inc. written by Ken Seto,  founder of @Massive_Damage & @EndloopMobile.  He is building @PleaseStayCalm, a location based game.. Follow him on Twitter @kenseto where he tweets about Apple, music, games, food, wine & movies. This post was originally published in February 21, 2012 on MassDmg.com.

    Massive Damage Inc Header

    We’ve finally decided to post our Executive Summary to share with other founders as we’ve always had compliments and great feedback from it.

    Some folks wonder how best to use executive summaries.. basically you’ll give it to people who will be doing intros for you. That way, they can forward something that piques the interest of the potential investor without giving away the whole pitch. You don’t want your deck to do your pitch for you, you want to do the pitch.

    Here are the following guidelines I followed to create ours:

    1. Keep it to one page if possible, it’s a summary, not a pitch.
    2. If you have no eye for design, hire one or get a designer friend to help out.
    3. If you have metrics, put the good stuff front and center. Feel free to use vanity metrics for big impact but make sure you also have engagement metrics.
    4. Leave enough room for your Team section. Use pictures and previous startups/accomplishments.
    5. Include awesome visuals. Sure you can’t use zombies for every startup but give it some personality. Use bold infographics or charts.

    Here’s our Executive Summary:

    Massive Damage Executive Summary

    View more documents from Ken Seto

    Editor’s note: This is a cross post from Massive Damage Inc. written by Ken Seto,  founder of @Massive_Damage & @EndloopMobile.  He is building @PleaseStayCalm, a location based game.. Follow him on Twitter @kenseto where he tweets about Apple, music, games, food, wine & movies. This post was originally published in February 21, 2012 on MassDmg.com.

  • When Does a Startup Stop Being a Startup?

    Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in January 11, 2012 on MarkEvansTech.com.

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    This may be a question of semantics but here’s a question for you: When does a startup stop being a startup? At what point does a startup become a small company or a plain and simple company?

    It’s an interesting question because it’s easy – and probably lazy – to describe less established high-tech companies as startups. As well, the word “startup” is lot sexier and appealing than “small business”.

    So how should a startup be defined? Does it have to do with the evolution and life-cycle of its product? Is it the number of employees? Is it linked to revenue? Does it have to do with how long a company has been around? Can a startup have 10s of thousands of customers even if none of them actually pay for a service?

    For example, is Freshbooks a startup despite the fact it has been around for several years, it has 80 employees and sales of about $10-million give or take a few million dollars? It’s sometimes called a startup but it’s more accurate to call it a small company.

    For the sake of argument, here are some possible criteria for startups:

    1. Less than 20 employees. Once you get more  than this number of employees, a company starts to have “departments”
    2. A product still in development (pre-launch) or in market as a beta for less than six months.
    3. No sales or sales of less than $1-million, which means it’s a mini-business as opposed to a small business.
    4. It’s less than a year old, although there are companies that do go from zero to sixty in less than 364 days.
    5. No customers or only a handful of customers, who may or may not be significant clients dollars-wise.
    6. It has raised more than $5-million in venture capital. With this kind of cash, a company can support having a large team.

    For more thoughts, check out this Q&A on Quora, as well as a recent blog post on Business Insider.

    Editor’s note: This is a cross post from Mark Evans Tech written by Mark Evans of ME Consulting. Follow him on Twitter @markevans or MarkEvansTech.com. This post was originally published in January 11, 2012 on MarkEvansTech.com.

  • Under the Hood: The Technical Setup of Upverter

    Editor’s note: This is a cross post from the Upverter blog written by Zak Homuth (LinkedIn, @zakhomuth, Github). Follow him on Twitter @zakhomuth. This post was originally published on August 1, 2011, I was just negligent in posting it.

    Who doesn’t love tech porn? And what’s better than an inside look at the architecture and tools that power a startup? That’s right, nothing. So we thought, why not put up our own little behind the scenes, and try and share a little bit about how we do what we do?

    At Upverter, we’ve built the first ever web-based, the first ever collaborative, and the first ever community and reuse focused EDA tools. This meant re-thinking a lot of assumptions that went into building the existing tools. For example, clients and servers weren’t an afterthought, but instead a core part of our architecture. Collaboration was baked in from the start which also meant a whole new stack – borrowed heavily from guys like Google Wave, and Etherpad.

    http://en.wikipedia.org/wiki/Apache_Wave
    http://code.google.com/p/etherpad/
    http://techblog.gomockingbird.com/archive/5/2010

     

    Apache-wave

    On the front-end, our pride and joy is what we call the sketch tool. Its more or less where we have spent the bulk of our development time over the last year – a large compiled javascript application that uses long polling to communicate with the API and Design Servers. When we started out to move these tools to the web, we knew that we would be building a big Javascript app. But we didn’t quite know what the app itself would look like and our choice of tech for the app itself has changed quite a bit over time… more on this later!

    On the back-end, we run a slew of servers. When it comes to our servers, there was a bit of a grand plan when we started, but in reality they all came about very organically. As we needed to solve new problems and fill voids, we built new servers into the architecture. As it stands right now, we have the following:

    • Front-end web servers, which serve most of our pages and community content;
    • API & Design servers, which do most of the heavy lifting and allow for collaboration;
    • DB servers, which hold the datums; and
    • Background workers, which handle our background processing and batch jobs.

     

     

    So let’s talk tech…

    • We use a lot of Linux (ub) (arch), both on our development workstations and all over our servers.
    • We use Python on the server side; but when we started out we did take a serious look at using Node.js () and Javascript. But at the time both Node and javascript just wern’t ready yet… But things have come a tremendously long way, and we might have made a different choice if we were beginning today.
    • We use nginx (http://nginx.org/) for our reverse proxy, load balancing and SSL termination.
    • We use Flask (http://flask.pocoo.org/) (which is a like Sinatra) for our Community and Front-end web servers. We started with Django, but it was just too full blown and we found ourselves rewriting it enough that it made sense to step a rung lower.
    • We use Tornado () for our API and design servers. We chose Tornado because it is amazingly good at serving these type of requests at break neck speed.
    • We built our background workers on Node.js so that we can run copies of the javascript client in the cloud saving us a ton of code duplication.
    • We do our internal communication through ZMQ (www.zeromq.org) on top of Google Protocol Buffers
    • Our external communication is also done through our custom RPC javascript again mapped onto Protocol Buffers. http://code.google.com/apis/protocolbuffers/docs/overview.html/
    • We used MySQL () for both relational and KV data through a set of abstracted custom datastore procedures until very recently, when we switched our KV data over to Kyoto Tycoon ().
    • Our primary client the sketch tool is built in Javascript with the Google Closure Library () and Compiler ().
    • The client communicates with the servers via long polling through custom built RPC functions and server-side protocol buffers.
    • We draw the user interface with HTML5 and canvas (), through a custom drawing library which handles collisions and does damage based redrawing.
    • And we use soy templates for all of our DOM UI dialogs, prompts, pop-ups, etc.
    • We host on EC2 and handle our deployment through puppet master ().
    • Monitoring is done through a collection of OpsView/nagios, PingDom and Collectd.

    Our development environment is very much a point of pride for us. We have a spent a lot of time making it possible for us to do some of the things we are trying to do from both the client and server sides and putting together a dev environment that allows our team to work efficiently within our architecture. We value testing, and we are fascists about clean and maintainable code.

    • We use git (obviously).
    • We have a headless Javascript unit test infrastructure built on top of QUnit () and Node.js
    • We have python unit tests built on top of nose ().
    • We run closure linting () and compiling set to the “CODE FACIEST” mode
    • We run a full suite of checks within buildbot () on every push to master
    • We also do code reviews on every push using Rietveld ().
    • We are 4-3-1 VIM vs. Text Edit vs. Text Mate.
    • We are 4-2-2 Linux vs. OSX vs. Windows 7.
    • We are 5-2-1 Android vs. iPhone vs. dumb phone.

    If any of this sounds like we are on the right path, you should drop us a line. We are in Toronto, we’re solving very real-world, wicked problems, and we’re always hiring smart developers.

    Reference

    Editor’s note: This is a cross post from the Upverter blog written by Zak Homuth (LinkedIn, @zakhomuth, Github). Follow him on Twitter @zakhomuth. This post was originally published on August 1, 2011, I was just negligent in posting it.

  • FounderFuel cohort explodes onto the scene

    Disclosure: I am a mentor at FounderFuel, and I traveled  to Montreal in August 2011 to see most of these companies during the mentor matching. I’ve also mentored Willet as part of my role as Entrepreneur-in-Residence (EiR) at Velocity (@UWVelocity) in Waterloo. 

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    I am/was impressed with the teams accepted into the 12 week FounderFuel program. Today is #FFDemoDay where after the past 12 weeks the companies get a chance to show the world what they’ve been working on. I love the art of the demo, it is so different than the pitch. I met all of the companies in August 2011 at the Mentor Matching Day, unfortunately I wasn’t able to travel to Montreal to see the demos today. It looks like the team at Founder Fuel is continuing Montreal Startup Up’s great track record of identifying and growing very early stage ventures.

    I’m apparently having a bromance for the Real Ventures team.  John Stokes (@iamjohnstokes), JS Cournoyer (@jscournoyer), Mark MacLeod (@startupcfo), Allan MacIntosh and Ian Jeffrey (@ianjeffrey) are putting together programs and the funding to support a strong early stage technology ecosystem in Montreal. Keep up the phenomenal work guys.

    The 2011 FounderFuel Cohort includes:

    • Playerize
      Playerize grows social and mobile games by providing player installs from diverse channels at huge scale.
    • OOHLALA
      A mobile platform that helps students take control of their college life by powering the events, conversations and deals on campus.
    • Willet
      Willet is the missing step from social browsing into shopping, and converts the mindsets of people without intent to buy into paying customers.
    • Vuru
      Vuru takes complex financial statements and distills them down into clear, transparent reports that show investors the fundamentals that matter.
    • Seevibes
      The TV Ratings For Social Media Audience – measures engaged audience to provide relevant data that media and advertising industry need.
    • BlameStella
      Is your Internet contrivance up to snuff? Find out with BlameStella, the future of Web Monitoring .
    • PlayerTakesAll
      A viral campaign & referral management platform that enables advertisers to extend the reach of their marketing efforts by 50%.
    • Wavo
      wavo.me is the easiest way to collect, manage and play the music and videos being shared on your social networks.
    • Editola
      Editola uses the community to build the most accurate view of every news story. The best articles, videos and opinions, all in one place.

    Apply for FounderFuel 2012

    The spring 2012 FounderFuel session is scheduled to start on February 20th 2012, and applicants may apply directly online at founderfuel.com until January 7th 2012. An early review of candidates will begin on December 12th 2011.

    FounderFuel DemoDay #FFDemoDay by deniszgonjanin
    Photo by deniszgonjanin

  • The Upside Of Canada’s Startup Buying Binge

    Editor’s note: This is a cross post from StartupCFO written by Mark MacLeod, it is a response to Mark Evans’ post The Downside of Canada’s Startup Buying Binge. Mark MacLeod is a Partner at Real Ventures, Canada’s largest seed VC fund. He is also an advisor to some of Canada’s leading startups including Shopify and others. Follow him on Twitter @startupcfo or StartupCFO.ca. This post was originally published on September 14, 2011 on StartupCFO.ca.

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    Mark Evans posted recently about the downside of Canada’s recent startup buying binge. Year-to-date, we have had 22 exits in Canada. But save for outliers like Radian6 and Algorithmics, most have been relatively small. Mark correctly argues that there are long term negative implications to these early exits: losing talent to the US and not building mid to large scale companies that can really bolster our tech scene.

    Can’t argue with that and I have posted in the past about the importance of large tech companies to our ecosystem. But, exits are like pizza, even when they’re bad (small) they’re good. Why?

    Returns to LPs: Returns in the Canadian venture industry since inception are negative. Some funds have delivered returns, but the industry as a whole has not. That won’t work if we want to attract non-government LPs who are motivated by returns vs. policy, job creation. So, any exit that contributes towards fund performance is good.

    Generating repeat entrepreneurs: The reason (I believe) why many of our exits are relatively small is that the founders behind those companies have not had a positive exit before. As an investor, you should not bet against human nature. And I think it’s perfectly natural for an entrepreneur that has the opportunity to sell early and pocket a few million to do that. The trick is to keep that entrepreneur in the system and working on the next company. The next time, that same entrepreneur will set his or her sights much higher.

    Eliminating borders: It used to be an uphill battle to convince US investors to come up here. Now with the elimination of witholding taxes on exit and with our companies doing great things US investors are coming up here more often and earlier in the startup lifecycle.

    So when you think about what’s happening now, my hope is that we are setting the stage for long term success and the creation of some tech giants right here in Canada. To enable that, investors need to do more of the following:

    Give Canadian Startups more capital: This might be ironic coming from a guy at a seed fund, but it’s a well known fact that Canadian startups raise less than their US counterparts. I think it’s fine to operate with small $ before product/ market fit but as soon as you are ready for goto market acceleration you need serious fuel. Canadian investors and entrepreneurs need to continue building strong syndicates that include US investors that can write big cheques.

    We did that at Shopify. The investor group there includes two large tier 1 funds that can help Shopify become a giant in its industry.

    Enable founders to take cash off the table: As a founder you’re more likely to “go for it” if you can sell some shares and not have to worry about cash. This is common practice in the US. We need to do it more up here. It does not make sense early on but series B and up, I think it makes sense.

    Surround our CEOs with mentorship: When you look at the truly giant tech companies, they are almost always founder-led. So that tells me that we have to surround our founders with peers, mentors, coaches, advisors to help them make that transition from founder to CEO.

    We also need tech companies going public here in Canada, but that’s another topic for another time. So, I say bring on these early exits and realize they are setting the stage for great things to come.

    Editor’s note: This is a cross post from StartupCFO written by Mark MacLeod, it is a response to Mark Evans’ post The Downside of Canada’s Startup Buying Binge. Mark MacLeod is a Partner at Real Ventures, Canada’s largest seed VC fund. He is also an advisor to some of Canada’s leading startups including Shopify and others. Follow him on Twitter @startupcfo or StartupCFO.ca. This post was originally published on September 14, 2011 on StartupCFO.ca.

  • The Next 36

    The Next 36The Next 36 is a new program at the University of Toronto that “aims to transform Canada’s most promising undergraduates into high impact entrepreneurs”.  The program is founded by Reza Satchu and Tim Hodgson. Mr. Satchu was the founder of SupplierMarket which sold to Ariba in 2000 (for a reported $581MM) and founder of StorageNow Holdings sold to InStorage REIT. SupplierMarket was a Sequoia Capital company and was eventually acquired for approximately $581MM. Mr. Hodgson was CEO of Goldman Sachs Canada and is connected on the finance and banking side.

    The program is aimed at identifying 36 high potential undergraduate students that are in entrepreneurship. It provides a program that includes:

    • Personal mentorship from Canada’s top business leaders and entrepreneurs (think Anthony Lacavera, Kevin O’Leary, Nadir Mohammed and others)
    • Support for the development of your own mobile app company
    • Combination of academic theory, business mentorship and practical entrepreneurial experience
    • A powerful peer network with 35 of Canada’s most talented and innovative students
    • $25,000 scholarship for each student selected

    It’s an interesting opportunity to build a mobile application, get a $25,000 scholarship, build the personal network with the most powerful business folks in Canada. It’s an interesting opportunity for the Next 36 team to partner with other local organizations like MEIC long with their existing corporate sponsors.

  • How to pitch to corporate VCs

    One way to segment  the world of  VC is into two camps: (1) financial investors and  (2)  corporate investors. My guess is that a lot of the VCs lurking around here are what you would call financial investors; meaning, they take other people’s money, invest it in start-ups and try to make more money.

    But there is the other type of investor, the corporate ones. These investors tend to work for a large corporation and invest the company’s money. Their goals are also to make a lot more money off of their investments but they are also tasked with producing a strange and esoteric thing called a “strategic return”.

    In a nutshell, these investors have to invest to make money, and to make their company smarter by learning from you, the clever start-up.

    For start-ups, having a corporate VC as an investor can have many benefits if the relationship is correctly managed including credibility, access to the corporations sales and engineering teams,  access to go-to-market channels, and opportunities to conduct joint R&D.

    So it is important that start-ups realize that pitching to strategic investors is not like pitching to financial investors. So here are a few ideas to get you started on your corporate VC pitch:

    1. Prepare a pitch: Sounds obvious, right? You’d be amazed at how many start-ups show up without a pitch. I guess  they think they can come in and talk shop for 30 or 45 min and that will be enough to land a deal. It isn’t. Show up prepared and ready to go.
    2. Know the company’s investment thesis: Companies aren’t shy talking about their investments, so there should be a lot written about past deals. Don’t come in with a canned investor pitch, read up on past deals and come in with a pitch tailored to the company’s investment thesis.
    3. Tell them why you’re relevant: Corporate VCs often have to get support from a BU for a deal, so help them position your company with the BU. Figure out which part of the company will be most interested in you and explain that in your pitch.
    4. Better yet, have traction: Come in with a history of working successfully with a BU. Show how investing in you will help you scale/innovate and make the BU relationship even more successful
    5. Don’t come in as a competitor: If you’ve built a competitive product that is better than theirs (or so you think), don’t think you’ll get money from them to keep you off the market. They won’t invest in you. They’ll probably just try to crush you. It is easier.
    6. Come in as a partner: If you and the larger company are in the same space, it doesn’t mean they will necessarily be interested in you. “You do software, we do software” is not a compelling reason for a corporation to invest.  Rather, tell them how your software (product, service) will help better position their software (product, service) in the market.
    7. Finances: Oh yeah, nothing drives corporate investors battier than being treated as  dumb money. You’ll need to come in and talk strategic alignment, but very soon the conversation will turn financial. Remember, these people live and breathe your markets every day,  so they can tell if your market sizes/growth assumptions are for real

    Meeting with corporate investors can be a maddening, time consuming process. They will ask a million question not only about your business, but on how your business relates to their business. So you need to know your business cold and their business cold. But if you come prepared with insight and some existing wins under your belt, this crazy process may have a profitable outcome.