My Library and Courses
Last Update: Tuesday June 25, 2019

Key Idea: Find The Right Investors

Brian Kissel says that when you look for investors go first to people who already understand your idea and how it might impact existing business.  More...

Key Question:

A: 

Brian says you should look for people who already operate in the field.  We believe that the more complex your idea is the more important this idea will be to you.

Q:  Why does this simple idea make so much sense?

A:  You don't have to spend time educating a potential investor. 

Think about it

Can you make a list of people you know who could lead you to potential investors?

Clip from: The Enterprise Network

Santa Clara and San Jose, California: Silicon Valley is famous for technology startups and its goal is to never lose the distinction of being "the place" for innovation. The Enterprise Network (TEN) houses over a dozen start-ups working to bring new technologies to the marketplace. At TEN they find low-cost office space and mentors who guide them. You will meet the men who run the incubator and a number of the entrepreneurs who depend upon the leadership and camaraderie offered here.

According to the National Business Incubation Association, there are about 5,000 incubators worldwide with about 1,100 in the US. 

We chose this incubator because it became famous during the dot-com boom and it is situated  close to Stanford University. 

Stanford was early to the idea of technology licensing.  Technology licensing has assisted faculty and students in the process of launching companies which in turn have created thousands of jobs and brought millions of dollars into Stanford University.  Stanford enjoys the "success breeds success" principal so things are popping there.   In this program we go to the campus to see how one PhD student is working to commercialize his discoveries.

Go to all the key ideas and video of this episode...
Go to the homepage of this episode...

The Enterprise Network (TEN)

Mark Godwin, President & CEO

Access Growth LLC
2953 Bunker Hill Lane Suite 400
Santa Clara, CA 95054
408-893-4500

Visit our web site: http://accessgrowth.com

Office: 408-893-4500
Toll Free: 877-256-4500

Business Classification:
Business Incubator - NGO

Year Founded: 1993

Find The Right Investors

BRIAN KISSEL (CEO, Paraform): I'd say we probably ended up talking to six or eight different investment groups. And, of those, there were some that didn't think it was a good idea, didn't think it was big enough. One of the things that you're seeing now is with a lot of investors, because the funds have been so successful, the amount of money that they have and the amount of money they need to invest, kind of predetermines the size of the opportunities that they can invest in.

HATTIE: So if you only want $10 million, and they want to invest $30 million, you're not the right idea.

BRIAN: Exactly. And what we found to be important was finding investors who had already bought off on the notion that 3-D digital imaging was going to be an important area going forward and had already made investment decisions in that area, had made investments in other companies that were pursuing similar opportunities.

HATTIE: So piece of advice you would give someone looking for capital is to go to someone who's already familiar with that industry.

BRIAN: Absolutely. Absolutely.

HATTIE: So you don't have to educate them on the industry.

BRIAN: Exactly.

HATTIE: How are you making a living?

BRIAN: Right now, we're living off the investment. As is true of most first round . . .

HATTIE: The first round of capital that you've raised?

BRIAN: Exactly. Exactly.

HATTIE: OK. Because what I want people to try to understand is you don't just in a month or two get venture capital.

BRIAN: No, it took us a good six months, and I think we're probably about average, at least for the Bay area here in San Francisco.

HATTIE: Mm-hmm. (thinking to herself), "Only in Silicon Valley!)

BRIAN: It generally takes between three months and 12 months, you know, assuming you have a viable business.

HATTIE: OK. So you got your first round but you're still in the incubator . . .

BRIAN: We are still in the incubator.

HATTIE: OK. So what happens next? What's the next plan or step?

BRIAN: So the next step for us is to staff up to kind of a core group of people that's big enough to really get us through the milestones that we've laid out for ourselves and for our investor group, and have a working prototype of our software and have it being used by some customers.

HATTIE: OK. That doesn't exist yet. There's not a working prototype yet?

BRIAN: There is. But not a commercial version of the software that we can distribute more widely to a number of customers.

HATTIE: So your installs are still beta sites . . .

BRIAN: Those would be beta sites.

HATTIE: And then once you get all the kinks worked out then you roll it out to everyone.

BRIAN: Correct. We'll roll it out, and that's where we will probably go back to the investment community and ask for our next round of investment.

HATTIE: OK.

BRIAN: The pitch that we made to the investors was, there's a range of investment you can make that will get us through various stages in our business development.

HATTIE: How do you keep yourself hyped up, energetic, enthusiastic?

BRIAN: I think part of it's the energy among the founders and the employees of the company, because we all have pretty complementary skills, and we see that together, we can do more than any of us could individually, and that's kind of exciting. I think the other thing is, we have some really good customer contacts already, so we have people using our product and giving us really encouraging feedback.

Not a member yet? Learn!  Be empowered! Join us!