Venture capitalist Jeff Bussgang explains steps for entrepreneurs seeking venture funding in new Kauffman Founders School series
Entrepreneurs may recognize venture capital as a potent source of startup funding, but many are inexperienced about how to tap into VC funds. A Kauffman Founders School video series released today teaches entrepreneurs how to find, approach and negotiate with venture capitalists to secure funding that matches their business needs.
The “Financing Your Venture: Venture Capital” series features insights from Jeff Bussgang, who uses the knowledge he gained as an entrepreneur in his current role as general partner of Flybridge Capital Partners. Bussgang, a senior lecturer at Harvard Business School, recommends entrepreneurs research the mindsets, goals and track records of venture capital firms before negotiating with them.
In his seven-video Kauffman Founders School series, Bussgang explains the steps that will set up entrepreneurs for a more successful pursuit of venture capital funding. For example, startup business owners seeking or contemplating VC funds should:
- Consider whether venture capital meshes with the entrepreneur’s personal goals and management style. VC firms can provide much-needed funding, guidance and networks, but the business owner will have to share control of the company.
- Find the kind of venture capital firm that aligns with current business needs in terms of type, size and stage of development.
- Research VC firms to make sure they have a reputation for hanging in there and helping businesses work through problems.
- Never “cold call” a VC firm. Arrange for an introduction from someone the venture capitalist knows and admires.
- In the initial meeting with VC fund representatives, don’t downplay the risks, but lay out a plan for mitigating those risks. Be prepared to brainstorm.
- In negotiations with a venture capital firm, focus on issues involving control and the economics of the deal.
- A well-thought-out exit strategy is crucial. The best time for business owners to exit a company may be when they don’t need to.
Teaching entrepreneurs best practices in areas not typically covered in other training programs, the Kauffman Founders School enables entrepreneurs to learn anywhere, anytime, and to immediately apply the lessons to their businesses. Other Founders School topics include:
- Startup Boards, presented by Brad Feld, a serial entrepreneur and early-stage investor since 1987.
- The Lean Approach and Startups, presented by Silicon Valley serial entrepreneur Steve Blank.
- Entrepreneurial Selling, presented by Craig Wortmann, CEO and founder, Sales Engine, and clinical professor at the University of Chicago’s Booth School of Business.
- Powerful Presentations, presented by Nathan Gold, founder, The Demo Coach.
- Entrepreneurial Marketing, featuring Anita Newton, a long-time marketing expert and vice president of corporate marketing with Adknowledge.
- The Art of Startup Finance, featuring Bill Reichert, who founded several Silicon Valley-based software companies and now runs Garage Technology Ventures, a seed-stage and early-stage venture capital firm.
The online education program is housed on the Kauffman Foundation’s Entrepreneurship.org web platform, which offers resources, educational information and tools for entrepreneurs. It can be accessed at http://www.KauffmanFoundersSchool.org or via http://www.Entrepreneurship.org.