Venture Capitalists Tips: Navigating Investment Opportunities

Venture capitalist panels judged companies from the defense, environment and technology spaces and offered advice to entrepreneurs pitching their ideas during AFCEA TechNet Emergence, an event hosted by AFCEA, held between March 11 and 12 in Reston, Virginia.

One of the most important points covered concerned well-rehearsed presentations and deep market knowledge.

Still, too much enthusiasm could derail first impressions and a PowerPoint presentation about changing the world does not change it.

“I hope I never hear the phrase ‘we're going to change the world’ again. You meet these founders, and they drank a lot of Kool-Aid, obviously,” offered Mark Walsh, founder and managing partner at Ruxton Ventures.

He stressed how such thinking underscored a siloed mentality in a business team.

Projections should not be stunning but should offer reasonable, well-estimated figures that make sense within the broader market targeted, explained Paul Singh, CEO of Rezon8 Capital.

There is always someone who can compete with the product or service on offer.

Entrepreneurs can score points when presenting if they understand who the players are or who they could be.

“I wish I had a nickel for every time I've seen companies miss two things: one, competition; just blows me away,” Walsh said. The second consideration companies omit is ownership dilution after successive investment rounds, according to Walsh.

“I think that shows a lack of concern and lack of sophistication, which we see a lot,” Walsh added.

Once a company is marketing its products or services, it is important not only to attract new clients but to keep them.

“One of the greater indications of the strength is your ability to keep customers' net retention and your gross retention,” said James Quigley, partner, Osage Ventures. A business team that can stay in business with clients shows attributes that gain importance in the long term.

Once a business is proven to be viable, founders managing operations are another indication that a company is on a positive path.

“The ones that become home runs are usually with the founder as a CEO,” Quigley told the audience at the event. And among the leaders who excel are those who find people who are better than themselves.

“We love it when a founder hires somebody who bluntly frightens them with their capacity, their skill set, their domain expertise, because that's what drives people to stay the extra hour, to make the extra call and drive revenue,” Walsh said.

The winning CEO was portrayed as someone who can learn and leverage those around them and capitalize on other experiences. “Someone who is creatively curious, constantly curious and willing to be wrong and vulnerable,” Quigley said.

These investors gave these insights during their opening remarks before a startup competition. The panels were moderated by Tien Wong, founder and host, Big Idea CONNECTpreneur.