Stan Garber and Alex Yakubovich have sought venture capital financing more than once and each time they’ve done it, the stakes have been higher. Their most recent round of investment for Scout RFP has drawn the attention of companies like Workday and Salesforce. That’s not only a huge boost of confidence for them but also a good sign of how effectively these two guys are at building the relationships that result in funding.
Listen to hear how Alex and Stan have gone about seeking venture capital financing for their startups, how it’s happened for Scout RFP most recently, and what they recommend to anyone who is interested in seeking VC funding for their venture.
Outline of This Episode
- [2:55] How the Scout RFP team discovered and solved for the needs in procurement
- [6:40] An elegant and simple tool makes for wider adoption within an industry
- [9:22] How to navigate the venture capital financing maze
- [12:30] The most important part about raising money
- [15:19] How does it feel to give up equity to venture capital firms?
- [20:56] The confidence that comes the second time seeking venture capital financing
- [27:31] What is Spark?
- [30:24] What can procurement people learn from salespeople?
Venture capital financing: What to expect
Anytime a startup seeks venture capital, it’s a long road with many twists and turns. But going in with an understanding of what to expect is incredibly helpful. Alex and Stan say that much of what your firm is being assessed for in the first conversations are track record, who introduced you to them, and who you are as individuals. That’s why you have to prepare intensely for those meetings and put your best foot forward.
Alex says it’s particularly important to set lots of meetings and to get rejected a lot. It’s these meetings that enable you to refine your pitch, articulate your vision more clearly so that when the high stakes meetings come in the future, you’ll be ready. He says that once you find the financial partners who get who you are and support what you’re doing, the funding fit will almost take care of itself.
Build relationships first, the venture capital will come in time
When Alex and Stan began pursuing venture capital financing, they started from a slightly different perspective than many who are seeking VC financing. They began making connections with potential investors and management companies long before they were ready to make any sort of pitch. In their mind, the relationships they were able to build set the stage for the pitch when it was time to make it.
They say that their success was built on trust, progress, and time and that it’s a sequence that can’t be shortcut. Listen to hear how they used this approach to make the right connections, weed out potential financial partners that weren’t a good fit for their startup, and find the investors who aligned with their vision long-term.
Steps to take when you’re ready to seek VC funding
A venture capital pitch meeting is one of the pivotal points in a startup’s history. You want to go into those conversations fully prepared, ready to answer every question, able to demonstrate your value proposition in simple, non-confusing terms. It can’t be stressed enough: be prepared when you go into those meetings.
Stan also recommends that you set up many, many meetings and try to do the non-critical meetings first. Why? Because your first pitches will be a wreck. You need time to perfect them. Alex and Stan found the most success came when they were genuine and simply demonstrated their product in a clear, simple manner. The right investors appreciated their no-nonsense approach and decided to back them.
What can procurement professionals learn from sales professionals?
Sales professionals typically have a limited number of prospects to pursue and therefore need to prepare intensely for sales calls so that they can put their best foot forward when they finally get a meeting. They have learned that preparation is key. Alex and Stan say that procurement professionals, on the other hand, don’t typically have to prepare as much because they are overwhelmed with options. But preparation on the procurement side is something they believe will enable them to make better decisions that have lasting impact. Tools like Scout RFP have made that possible for the procurement industry.
Resources & People Mentioned
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