The Journey to Impact: Equity Investors and Updates
Rana K. Gupta formerly served as director of faculty entrepreneurship at Boston University. He helped BU researchers bring technology and other research breakthroughs to the marketplace to increase their impact through programs and workshops, one-on-one consulting with faculty, educational resources, and community building among BU innovators.
This fall we launched a new program titled Invasion of the Equity Investors. I specifically named the investors ‘equity investors’ to ensure there’s no mistake about the nature of the transaction in the offing. Equity investors (Angels and venture capitalists) purchase shares in your company in return for cash. The ‘invasion’ was chosen to attract attention, perhaps make you smile. They are one source of funding. There are many, many additional and alternative forms of funding besides equity (click here for a posted presentation on the subject), but that’s a conversation for another day.
We had three investors scheduled thus far this semester. We’ll invite more next semester.
Following are a few quotes from researchers who met with investors this fall:
What did you learn? It was the first time pitching the idea so I learned the examples and stories we used to set the tone, the stories we’re using, while great examples, are too narrow. We need ways to tell people what the idea is and get that across better. -Doctoral student
Benefit of the meeting? Benefit is educating me on the issues investors are going to drill into: what is my investment buying. -Faculty member
Benefit of the meeting? I had a raw idea and he helped me think about how to move forward. Recommended customer analysis before engineering analysis: “decide what market you’re shooting for”. That was good advice. I got exactly what I needed from this meeting. -Faculty member
What did you learn? Different investors value my capabilities differently. Some want me to talk about financials, markets, etc. [this investor], for example, wanted to focus on the tech and value proposition. He assumes I’m NOT going to be CEO. So I learned there’s no uniform “investor perspective” when giving a pitch. He was focused on my technology’s competitive advantage and was knowledgeable about other incumbent solutions. He needed my tech to be superior for him to be interested. -Doctoral Student
Noting the fourth quote above, I’ll offer some perspective on that doctoral student’s insight; it’s a goodie (technical financial term). Wrong question: what do investors want to see? If you’re raising equity funding and meeting with multiple investors, there is no consistency across investors’ preferences as to what they’re going to accentuate and value in (i.e. want to hear from) your presentation. Here’s an opportunity to use a marriage, dating and parenthood (MDaP) analogy. This one is dating. No two dates are going to want to talk about the exact same topic: one may wish to talk about family, another career, and another Nietzsche (good luck). Analogously one investor may want only to talk about your technology and the market need. Another may be interested in the business model and competition. Yet another may be interested primarily in the size of the market. One investor may want you to find a CEO now. Another may want you to reach a certain milestone before looking for a CEO.
Contrary to popular opinion, investors are people too. They have individual preferences, styles, and certain ways, methods and approaches to investing that work for them. If you’re going to pitch to investors, be prepared for this. Do not go to the meeting assuming you know what their priorities will be; investors will not value, prioritize or advise the same. Fun, yes? Dating.
This is but one of the reasons for bringing these invading investors to campus: to give you good researchers practice at pitching to different parties. I hope the above quotes pique your interest in signing up for subsequent opportunities to pitch your idea.
Please watch the program webpage in coming weeks as I populate it with Invading Investors for spring 2022.