Raising Private Capital Event on November 19 Attracts Over 200 A Continuum of Sources: Seed, Angel, Early and Later Stage Venture Capital, Mezzanine and Debt The Collaborative hosted a morning meeting Thursday, November 19, focusing on raising capital in today’s difficult market. Over 200 entrepreneurs, CEOs, executives, professionals and others were attracted to the event to learn about attracting investors and determining what types of capital make sense for their company.

The panelists included:

• Rich Lunsford, CEO, Anulex Technologies – Veteran Medtech CEO; $10 Million VC Round 2009; $48 Million Total
• Brad Cleveland, CEO, Proto Labs – $40 Million Manufacturer; $52 Million Private Equity Financing
• Paul Knapp, CEO, Space Center Ventures – MN Early & Later Stage High Tech & Medtech VC; Active Board Member
• Mike Moore, Director, University of St. Thomas Norris Institute – Early-Stage & Seed Investor
• Dan Carr (moderator), CEO, The Collaborative – 20+ Years Serving Growth Companies & Investors; Co-Founder of 4 Businesses

Panelists started by discussing the most important factors in raising capital. In this economy, it is more important than ever to catch an investor's attention. Everyone is trying to get money and investors are inundated with deals. Lunsford said, “The key to success is differentiation. Make connections through your board. Referrals are precious - use the relationships that you have developed in the past. The best meetings we have are from referrals from our board.” It is important to ask questions of your trusted advisors and to get perspective. Try to present yourself to investors in a way that is appealing and will be a deal that is hard from them to pass up. Cleveland noted, “From a growth equity perspective, the best time to raise money is when you really don't need it, or can at least live without it.”

Panelists (L-R) Mike Moore, Brad Cleveland, Rich Lunsford, Paul Knapp and Dan Carr

Often times entrepreneurs can get caught up in their product and forget to tailor their pitch to the investor. From an investor perspective, Moore said, “Don't over estimate the investor's attention span. If you don't capture their attention in the first minute, you've lost them forever. Hit them with the business proposition and how your going to execute it - hit the high point, and hit it often.” Panelists also emphasized the importance of relating to the investor and making a clear value statement. Knapp added, “Put me in the shoes of the customer and why they would buy this product. Many people don't know who is going to be making the buying decisions. Know who is making those decisions and tell me why it will improve their life.”

Next panelists discussed the importance of gathering a solid management team. Finding high-level talent is important and speaks volumes about the quality and potential future success of your company. A good management team can not only provide you with great advice and experience, but also makes investors more comfortable. “Right now is the single best time ever to assemble a good management team. It is much easier to put in money if someone at the company has already been through the process,” said Knapp. Lunsford added, “Investors want to know about your management team - differentiate your company by your management team: past success, why the group was pulled together. A good management team builds confidence in investors.”

The discussion wrapped up with panelists noting the tough economic climate and strategies to weather the storm. Be sure to communicate with your board - early and often. Also be prepared for investors. “It is never too soon to start getting ready for investors. Get the systems in place and get your homework done. Have a continually improving business plan in place and have a very clear value proposition,” said Cleveland.