Tips for rasing capital

Last year, venture capitalists and angels who co-invested with them placed $7 billion into seed and early-stage deals, an 11 percent increase from 2009, according to the most recent PricewaterhouseCoopers/National Venture Capital Association MoneyTree report. From the conversations I'm having in the investor community, this year is promising to be even better.

Is this a limited window of opportunity, or more? It's hard to know just yet. But as the stock market edges ever higher and the wealthier feel healthier, there's a good chance that American startups will also get their moment in the sun.

To help you get a jump-start with fundraising, I've gathered tips from active early-stage investors and entrepreneurs who managed to beat the odds by raising capital during and after the Great Recession. Herewith, in no particular order:

1. Meet angels via the entrepreneurs they've funded. Referrals carry weight, but for those without a long list of angel contacts, getting access to angels via entrepreneurs they've already funded can be equally powerful. "While most angel groups don't post a list of members, they do publicize the companies they've funded on their websites," says Richard Sudek, a member of Tech Coast Angels, a group in southern California whose members invested about $6.2 million in 2010. "It's a targeted way to get access to investors and acquire intelligence on the personality of the angel group, all in one pop," Sudek says.

2. Avoid approaching investors in July, August, and December. "The high-net-worth individuals [who] make up the angel universe tend to take extended vacations in the summer and the period between Thanksgiving and New Year's," says Jennifer Naylor, an angel investor with Golden Seeds in New York. Pitching at a screening in slow months can result in delayed response from investors or even lack of interest at lightly attended screenings. The group invested $8.7 million in 2010.

3. Let investors help you refine your pitch. "Don't enter the process blind," says Jamie Rhodes, an investor in Austin with Central Texas Angel Network, which invested $5.5 million in 2010. "Our executive director works with entrepreneurs [who] have been selected to pitch, coaching them to improve their presentations and helping them anticipate questions." Other groups, such as Tech Coast Angels, allow entrepreneurs to sit in on screenings to get a better understanding of the process.

4. Skip the jargon. "Most early angels will not have domain expertise in your industry or technology. Keep your presentation jargon-free," says Anita Brearton, who chairs Golden Seeds' Boston branch.

5. Be coachable. "Angels aren't focused only on ROI," says Tech Coast Angels' Sudek. "Most have a strong desire to mentor and help build companies.

A few links to fundrasing sites.

Causes, the startup that helps users leverage Facebook and other social sites to raise money for charity, has closed funding round led by NEA with participation from Founders Fund, Marc Benioff, Dustin Moskovitz, Ron Conway, Keith Rabois, and Karl Jacob. Scott Sandell of NEA will join as an observer on the Causes board. Causes CEO Joe Green says that the company will be using the money to build out its team, including some senior hires.
http://techcrunch.com/2011/02/24/social-fundraising-site-fundly-raises-2-million-of-its-own/

H360 Capital’s investments will primarily focus on tech entrepreneurs and businesses in their early-stage of development

March 29, 2011 – Hezekiah Griggs III today announced the formation and launch of venture capital firm, H360 Capital. The firm draws on Griggs’ extensive experience as a successful entrepreneur and networking prowess to create a new, early-stage focused venture capital firm designed to support the needs of today’s entrepreneurs. H360’s first fund will be announced in a forthcoming release.

“I’ve long known, that Innovation is the cornerstone to any thriving economy, culture, or environment,” said Griggs. “My partners and I are collectively concerned about the diversity of thought, and the entrepreneurship climate that exists today. However, there is no greater time than now, to fulfill the promise of technology’s burgeoning presence in our lives, and how it will help shape the future of how we live.”

H360 Capital’s philosophical approach to venture capital investing is simple; the firm seeks to invest in entrepreneurs at the earliest stage possible. “We realize that the most critical point of a venture is when it begins to turn its ideas into operating ventures,” commented Griggs. “In order to fulfill that vision, we will change the relationship-based component to venture capitalism, into idea-based investing.” Griggs and his Partners will serve in various capacities to assist in the development of portfolio companies, and at times take board seats to ensure the success of the ventures.