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Raising Capital: Before You Raise Equity Capital

Des Moines Startups Before You Raise Capital

April 11, 2017

Square One DSM, an initiative of the Greater Des Moines Partnership, and BrownWinick Law Firm hosted the third bi-annual Raising Capital Seminar on March 30. The seminar allowed startup founders to learn from other entrepreneurs who have gone through the process of raising equity along with angel investors who have made significant investments in startups. The Raising Capital Seminar provided an in-depth view of how entrepreneurs can secure significant equity capital to get their promising startup business to the next level.

Charise Flynn, Founder of c.Results and former Chief Operating Officer of Dwolla, led the presentations at the event and opened up the morning talking about some of the basics of raising capital, including things you should know before getting started.

Key Discussion Takeaways

  • Fundraising takes time. Entrepreneurs should anticipate three months at a minimum for raising their next round, but more realistically six to nine months.
  • Especially in Iowa, investors want to see how a company is going to make money. Your pitch needs to be about more than momentum or growth in users.
  • Setting a good valuation is not an exact science, but don’t get so hung up on valuation that it slows progress.
  • When determining valuation, make sure to interact with potential customers to clearly understand how large your target market segment realistically will be, rather than getting too “academic” in trying to decide.
  • Understand what individual investors want. Some are looking for big investments and potentially more risk. Some are looking for a smaller investment and a lower risk. Either could be right for your company – just know what you are looking for.

Additionally, the following videos may be of interest as you prepare to raise:

For even more information about raising capital, visit the Raising Capital page.

Mike Colwell

As executive director of entrepreneurial initiatives of the Greater Des Moines Partnership, Mike Colwell leads works with startups to build their business model, financial model, marketing strategies and capitalization plan. He is also co-manager of Plains Angels, a group of Iowa-based Midwest angel investors. Mike spends his days coaching, mentoring, consulting and asking tough questions to help entrepreneurs reach their full potential. Mike assists with business strategy, business planning, business plan execution, business model development and capital acquisition strategies.