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Here’s what some Iowa investors have to say about raising money


As we cover the Iowa and Midwest innovation community, we hear a lot of perspectives about the difficulties behind raising money, a lack of available capital or why investors choose not to invest.

So, to provide some insight into how investors evaluate deals, we asked some in Iowa three questions related to how they decide who or what to invest in and advice they would give to entrepreneurs seeking funds:

  1. When you’re evaluating an investment, do you look to invest in riskier prospects or ones that have more stable traction?
  2. What’s more important for you when looking at an investment: the people/team behind a startup, the product itself and its sale potential, or the market/industry the startup is in? What order of importance would you put these in?
  3. What advice would you have for entrepreneurs looking to raise money? What would it take for a startup to convince you they were worth an investment?

Here’s what they each said, in their own words. Answers may be edited for conciseness or length.

This survey is not meant to represent the views of all investors and shouldn’t be viewed as a checklist to guarantee startups they’ll receive money. Instead, this is to provide a general sense of how some Iowa investors approach deals and the advice they have for entrepreneurs.

We’ve reached out to other investors and hope to include more views in the future.

Next Level Ventures – VC fund, $1 to $4M

(answers via Scott Hoekman)

Risk vs traction

“NLV looks for Iowa businesses which provide a great management team, innovation, at least $1M of sales, and a growth story.”

People, market or product

“All of the above are important, however, “people/team” ranks the highest. An investor has to have a good relationship with management and the team that builds the company.  A great team will pivot around product/market challenges making great decisions.”


“We would suggest six things:

  • Consider selecting a handful of trusted advisors/mentors/board members who can assist you (these individuals likely could be some of your first investors).
  • Find a lawyer who understands angel/VC investing and startup formation.
  • Read ‘The Lean Startup‘” to consider how you should strategize about commercializing your product.
  • Read ‘Venture Deals‘ for advice on dealing with term sheets and other legal docs.
  • Try raising more equity than you think you need (it almost always takes more money and time than you believe).
  • Watch and/or research ‘how to pitch a VC.'”

Tej Dhawan – angel, Plains Angels/Mango Seed Investments

Risk vs traction

“The more I personally know the entrepreneur, the riskier. The less I know them, the more I need to see product — market fit, team, customer traction, discovery and formality of operations.”

People, market or product

“All are important. Product/market fit, team and industry in that order.”


“The startup has to have shown goals they created, met, and progress since. An idea on its own is largely worthless in an investment presentation. Similarly, a technical team without a product that can be experienced seems suspect of achievement.

The statement about a billion dollar idea usually kills the deal. If the startup hasn’t taken a risk with their product, why would I.”

Prairie Crest Capital – early stage VC (ag-tech focus)

(answers via Mark White)

Risk vs. traction

“We invest in early stage companies in Ag Tech that have demonstrated a proof of concept of their solution … Ultimately, the company needs to demonstrate that their solution will work in a commercial application, and, preferably have demonstrated it in a commercial application, often known as a beta or minimally viable product test.”

People, market or product

“We view these issues as symbiotic rather than on a scale of relative importance. For us, the solution (product) and team fulfill conditions of necessity and sufficiency.  The solution, or product, must address a problem for which people will pay for, address a problem that is of sufficient scale that it will have a global market, technically work and demonstrate significant theoretical economies of scale.”


“First, consider your goals as a founder.  What kind of problem do you want to solve, what personal goals do you want to achieve from the business (satisfaction, holistic, financial), and what do each of the founders see as an end point.  There are different investors for every type of situation, from lifestyle businesses, to legacy businesses, to social ventures, to high growth potential solution focused enterprises.

As a venture capital investor, we focus on founders that wish to establish problem solving, sustainable, scalable commercial businesses that will have an exit at some point in order to leverage their solutions. We need that exit for our investors.”

Mike Colwell – angel, Plains Angels

Risk vs. traction

“I look for traction. I see idea-stage as too early unless there is a very experienced team that have successfully built and exited startups in the past.”

People, market or product

“I look at the people first, the market/industry potential second and the product last.”


“First, (entrepreneurs) have to impress me as being the right team. There is a lot involved in this, but it starts with team first, individuals second.

Second, they need to show traction. Even if they do not have an MVP, they need to show that the market will react with purchase intent.”

River Glen Private Capital/Venture Partners – VC and private equity

(answers via Matt Busick)

Risk vs. traction

“River Glen specializes in making seed stage investments (the former).”

People, market or product

“All of these attributes matter, and we rank them equally essential as seed investors.  If forced to rank them in order of importance, we’d respond as follows: product, sales potential, team, industry.

Product must offer its intended buyer at least a 10 times improvement over status quo.

Business must be able to grow to an enterprise value large enough for us to earn venture equity returns (40%+ annually) on our investment; thus, the company’s sales potential and  corresponding future enterprise value must be large enough to match such an outcome.

Teams must possess requisite knowledge, skills, and abilities given goals for the business, and also loads of soft skills like vision, grit and tenacity.

We prefer industries requiring relatively little capital to reach scale.”


“Conjure your innermost Stephen Covey.  Seek first to understand, then to be understood.

Be organized, punctual, and thankful.

Do what you say, say what you mean.

We’ll invest when a business crushes our scorecard!”

Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at


  • Wade Arold
    Posted March 9, 2017 at 9:50 am

    Lets update this article with a response from Matt Kinley

    • Clay & Milk
      Posted March 9, 2017 at 10:01 am

      Hi Wade. Matt is one of the other investors we have reached out to for comment. If you have additional suggestions on other funds or investors, let us know.

      • Jordan Kaufmann
        Posted March 15, 2017 at 8:16 am

        Great summary. The Dreamfield Ventures team would also be good contributors. Brian Mitchell, Todd Smith, et al.

Comments are closed.

Here's what some Iowa investors have to say about raising money | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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