After picking up and moving to San Francisco last year, Australian entrepreneur Dean Kelly and his Heylets co-founder Justin Parfitt are facing the prospect of raising $4.5 million from Silicon Valley investors.
The pair started pitching for their series A round this week, after releasing their travel recommendation app on Android and being globally featured by Apple last week.
The duo recently closed a $1.65 million seed funding round from Blue Sky Venture Capital and a handful of angel investors.
But pitching in the tech capital of the world has taught these two Aussies a thing or two. Here’s Kelly’s advice for other Australians looking to raise capital in San Francisco.
1. Be selective with which VCs you target.
“Don’t only go for the big names, but think about firms that have an interest in your company’s space, and moreover, whether there are particular partners at those VCs that you want working with you over the next three-to-five years.
2. Have a pitching strategy.
“Classify your VCs into three buckets – 1. Warm up 2. Target 3. Fall Back, and try to arrange meetings in that order. However, there is a chance that you will simply need to meet VCs whenever they can…”
3. Have thick (but healthy, good avocado-type fats) skin.
“Just because a VC may pass on investing in your company, doesn’t mean it isn’t going to become a multi-billion dollar company one day. Many VCs passed on Uber and AirBnb, and are kicking themselves now. VCs make mistakes too. However, this does not mean if you get an email from the VC saying ‘thanks for your time, but we will pass for now’, you should reply with a meme of a photo of Travis Kalanick, saying ‘You just passed on the next Uber’, or a meme with Julia Roberts in Pretty Woman saying ‘You work on Commission? Big mistake’.”
4. Never judge a meeting based on how friendly the VC was during the meeting.
“Sometimes, the harder they question you, and the more they challenge you, the more likely they are to invest. And sometimes, the ones you feel like hugging/kissing gently at the end of a pitch, may never get back to you again!”
5. You may have to move back home with mum.
“Don’t be surprised when the first hurdle to you raising from a VC, and the difference between you having a $20 million company and you running out of money and moving back home with your mumma, is an employee who looks young enough to still be at school. Avoid the temptation to steal their lunch money or give them a ‘wedgie’.
These entry level associates know exactly what the investment committee is likely to be looking for, and will scare you at how intelligent and experienced they are.”
6. Be prepared to ask friends, friends of friends, and strangers in the street, for introductions.
“VCs will rarely look at ‘cold’ pitch decks sent to general inboxes. And remember – always pay it forward, and help out other entrepreneurs in any way you can. It’s the startup way. And, it helps you feel a little less bad when you contact an old high school friend whose sister walks the dog of someone who used to work at one of the top VCs in the valley, asking for an introduction.”
7. Keep your slide deck short and sweet.
“Try to predict any concerns VCs may have, and openly address them in your deck.”
8. Even though you may be nervous, be confident.
“Believe in your idea, believe in the market, believe in the product, believe in your hard work, and believe you will raise from a VC. Remember, VCs are not only betting on the market, the product, but also, and most importantly, the founders. The night before, watch Grease and think about how Danny Zuko would go about pitching.”
9. You will see the most amazing bathrooms.
“With products in there from stain removers to Q-tips. As they say, ‘always have clean ears before you pitch’.(I am not actually sure people say this…)”
10. You will get stuck in traffic on Sand Hill Road.
“Leave early, use that time to perfect your pitch, and make fun of people on Segways riding to work.”