Preparing Founders for Success and Connections at Happy Hour in Irvine
On a loud and rambunctious Wednesday night, a crowd of nearly 40 founders squeezed into a packed private room at the Left Coast Brewery in Irvine. Over the noise of nearby pub trivia, founders sought answers to questions about fundraising by listening intently to a diverse panel of investors and accountants share their insights about raising venture capital. The “Fundraising in Today’s Market” networking and founder education series hosted by the Alliance for SoCal Innovation celebrates and connects startup founders in local SoCal communities like Orange County, Santa Barbara, Los Angeles and everywhere in between.
The panel discussion, moderated by Jade Tran, SVP of Venture Banking at Banc of California, revealed how drastically the fundraising market has changed in the last year. For example, Bruce Hallet of Miramar Ventures explained that investors are much more diligent and disciplined this year because of market corrections since 2022. The specific impact of a longer due diligence period means founders may need more time than in previous years to secure funding.
Following this train of thought, Scott Fox, member of TCA OC Angels and founder of the OC Startup Council, encouraged founders to embrace a season of discipline by doubling the amount of research on potential investors and cutting in half the number of outreaches. A founder spending more time learning about the investors before reaching out will have a better chance at matching because they will know in advance how well they are aligned with the investment thesis. To also aid in the matching process, the panel suggested leaning on warm introductions to cut through the mountain of unsolicited emails investors receive each day. Such steps, the panel encouraged, could lead to a more successful venture raise.
Madeline Fraser of Sway Venture Capital and Nex Cub encouraged the founders to remember that the funding is still out there, even if investors are more selective in this current market. She agreed that staying disciplined in researching investors before reaching out and planning ahead for the due diligence process will set up founders for the best success. Kei Mortita of accounting firm HCVT brought this point to life when he shared stories from his experience with startup clients that missed out on key opportunities during the due diligence process because their bookkeeping wasn’t in order. Now is the time, the panel agreed, to make sure the startup is set up as a C Corporation (ideally in Delaware) with clean books and solid references on hand.
As the market corrects from the funding levels of two years ago, each founder who is fundraising will increase their chances for a successful raise through careful planning, taking more time to research than outreach, building relationships for warm introductions and solid references, and getting/keeping your books clean. The extra time spent on the “important but not urgent” tasks within the upper right quadrant of Stephen Covey’s “Time Management Matrix,” may shorten the due diligence process because the founder will be better prepared for the requests from a potential investor.
At the Alliance, we believe in supporting your entrepreneurship journey with highly curated events and our match-making with investors in our network for warm intros. We hope to assist with the investor research process and warm introductions. If we can help you plan ahead for your current or upcoming fundraising, please apply to the SoCal Venture Pipeline or reach out directly to Jay Velasco with any questions. Jay can be reached at jay at alliancesocal.org.