Startup company founders have an opportunity to learn how to raise capital from entrepreneurs and investors at a seminar in September.
Speakers will include local entrepreneurs and angel investors.
Alec Whitters, CEO of Higher Learning Technologies—an Iowa City-based technology company—said he’s raised capital three times totaling $15 million.
“It’s very time consuming but also very valuable to have done,” Whitters says. “Because usually the people who have money, are also smart. Not always, but in most cases there is and being able to tap into a bunch of smart people is really valuable.”
Whitters says entrepreneurs underestimate how long it will take to raise capital.
“I think a safe rule to tell people is that once you have all your stuff together, it takes about three months,” Whitters said. “But usually it takes two or three months to figure out how to present your company. And the more money you raise the longer it takes.”
He’s raised over $500,000.
Bailey explained that the initial round of funding to get the idea off the ground was called the, “Friends and family” round—where personal capital is also invested. The second round is where Bailey and his cofounders pitched to investors.
Bailey says that second round can take anywhere from three to six months.
“The first guy I pitched here in Des Moines ended up investing,” Bailey said. “I thought wow this is going to be really easy, and then the next three to six months I was pitching to other types of investors around Iowa and none of them ended up investing.”
Bailey said they have investors in Missouri, Texas and California.
He remembers where we was for the Texas call.
“It’s a high-five moment,” Bailey says laughing. “I’ll tell you I can vividly remember that I got a call from the executive with the Insurance company out of Texas on my cell phone at 7 p.m. on a Friday with my kids and my wife.”
Bailey says plan on having twice as many meetings, “As you think you’ll have to and plan on it taking twice as long as you think it will take.”
“The people that you go into a meeting thinking they are a sure bet typically are not,” Bailey says. “Just don’t get emotional and keep going.”
Whitters uses the saying, “Ask for advice, get money twice. Ask for money, and get advice.”
“Build real relationships so that people sit on the same side of the table as you,” Whitters says. “If you go up to people and just give them your pitch, they will almost always say no.”