Can you connect me to venture capital in Silicon Valley?

What happens when you can’t get venture capital financing? Anne Howard tried getting venture capital in Canada but to no avail. Turning to the Trade Commissioner Service she asks, "Can you connect me to VCs in Silicon Valley?"

Anne Howard is the Founder, CEO and Editor-in-Chief of RushPRnews, an online multilingual newswire with a press and social media release distribution service.

She asks: "I am seeking new venture capital investment for my company. I have spoken to all active Canadian venture capitalists (VC) but I have had no success. I now want to explore investment opportunities in the strong U.S. venture markets. How can you help me get connected to these VCs?"

Tab Borden, Trade Commissioner at the Canadian Consulate General in San Francisco/Silicon Valley, writes:

Tab Borden

Raising venture capital is a challenging process that has become even more difficult over the past 12 months. The global economic recession has resulted in fewer venture capital firms investing in new opportunities. At the same time the number of companies seeking venture investment has increased. The result is that venture capitalists, or VCs, currently have the luxury of being very selective and have raised their level of expectations for potential opportunities.

Beyond the basic requirement that your company has disruptive science or technology (technology that has the potential to change the norm), raising venture capital is really about building relationships. The VCs need to be comfortable with your management team, business model, ability to successfully execute your business plan and more. In turn you need to be comfortable that the VC will be a supportive partner who not only invests their money but will also bring their extensive network of contacts and sector knowledge, which can be as valuable as the money they invest.

Because raising venture funding is about building relationships, the Canadian Trade Commissioner Service can help. Most Trade Commissioners use a three-step approach to help connect companies to VCs.

1. Are you “VC Ready”?

Ask yourself the following three questions to find out:

Also, be prepared to travel to meet with the VC if they are interested in your company.

However, the most challenging part of becoming VC Ready is creating the best company profile possible. The profile must capture the attention of the VC and tell a compelling story—one that leaves them wanting more. Tell all the best parts of your company’s story and explain why you will be successful within two pages. That’s a difficult task and it’s better to spend extra time creating the perfect profile than to send out a document that closes more doors than it opens.

We can provide advice and work with you to ensure your profile meets the expectations of the VC. Remember the VC will only spend five minutes conducting the initial review of your profile so you have to give them a document that captures their interest right away. Send them a 20-page report and chances are they won’t open it.

2. Which VC is right for you?

We’ll identify the VC’s that are most likely to be interested in your company. It’s important to ensure that the VC’s investment strategy (stage, sector, etc) fits with your company’s situation. We’ll then be able to match your needs against the interests of the VCs.

In addition, we can determine if a specific VC is “Canadian Friendly”. This simply means they are interested in investing in opportunities in Canada without the expectation that your company move to the U.S. Generally, Trade Commissioners focus their efforts on Canadian Friendly VCs.

We’ll then be in a position to share your profile with the VC’s that have been identified. We can expect one of two responses:

  1. No thanks (at which point we thank them for their time and obtain any feedback they are prepared to share); and
  2. They want more information. That means they have reviewed your profile and are intrigued. You captured their interest and now is the time for the real work.

You have made it past the first significant hurdle—getting in the front door.

3. We’ll connect you directly with the VC.

This is also when Trade Commissioners will step back and takes on a supporting role. Only you can effectively pitch your company and give the VC the level of comfort they need to make an investment. The Trade Commissioner Service process will help you open doors with the right VC’s.

The process has been designed to minimize the cost to you. We can help you get to step 3—a face-to-face meeting with a VC—without you leaving your office. Everything can be done electronically or by phone, including your initial conversation with the VC. Now, when you get on that plane to meet with those VCs, you can rest assured that they know you and they’re interested.

For more information on how to get connected to venture capital, contact the Regional Office of the Canadian Trade Commissioner Service nearest you.

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