In order for an entrepreneurial ecosystem to thrive, there needs to be a mix of successful entrepreneurs and investors within the community. Successful entrepreneurs bring a hard dose of reality (and experience) to those looking to create companies. And good investors not only bring money, but also provide value to entrepreneurs through introductions, recruiting, partnerships, and mentorship. Charleston is lucky to have both through David Mendez.
David is a successful entrepreneur turned venture capitalist. Over the course of his career he started and sold a company for $300M+ and created the Southeast's first venture capital fund. On September 23, Startup Grind Charleston hosted David Mendez for a fireside chat. During the event David shared details of his past investment decisions, tips on how to prepare for investor meetings, and gave advice on how to learn from his mistakes.
During our chat, David mentioned several tips for startups looking to raise capital, including:
- Have your financials and cap table ready to share within 24 hours. VC's want to invest in people who are good stewards of money. If you can't keep track of your expenses pre-investment, you're probably not going to keep track of your expenses post-investment. This is a huge red flag for investors.
- Be confident, yet humble. Throughout the due diligence process investors are going to ask a lot of questions. Take pride in answering the difficult ones, but don't shy away from saying that you don't have all the answers. At the end of the day, making investments comes down to trusting your gut - and humility is a great way to connect with others and earn respect. Demonstrate that you're open to listening and that you're willing to learn.
- If you want to prove that you're building something the market wants, go get revenue. It doesn't matter how much market research you've conducted, nothing is more impactful to an investor than having paying customers. Save the business plans, market studies, and research reports for internal validation. Want to impress an investor? Go build something and get a customer!
These takeaways stand true whether you're trying to get investment from Cap A Partners (David's firm) or from any venture capital firm.
At the end of the event, David shared that Cap A Partners is raising a second fund with a $50M target. This surge of capital will certainly serve as a catalyst for entrepreneurial activity in the region. It's now up to us, fellow entrepreneurs, to disrupt the status quo and go build innovative companies. Let's get to work!