On October 16th, Peekapak hosted an EdTechTO Meetup for EdTech leaders in the Toronto area. Ami Shah, CEO and Co-founder of Peekapak, led a panel discussion with industry leaders Shayn Diamond (Partner, Whitecap Venture Partners), Kevin Taylor (Associate Director, SVX), and Kathryn Wortsman (Fund Manager, MaRS Catalyst Fund). Through an informative discussion about how social ventures can find the right funding for them, Shayn, Kevin, and Kathryn gave their views on how ventures can be successful in securing investments. Here’s what they had to say:
Impact is just a barrier, not a lever
Having a social impact isn’t enough when it comes to securing funding. Yes, if you don’t have impact, social investors won’t even meet with you, but just having impact isn’t enough. You still need to develop a good business model to be successful.
Before seeking funding, you should make sure you really understand the problem your company is setting out to solve and how you are trying to solve it. Kathryn highlighted six important questions that ventures should continuously ask themselves:
- What problem are we trying to solve?
- How are we delivering value to our target customer?
- What stage is our product/service at?
- Who is our team?
- What is our path to market?
- Why do I care about what our venture is trying to do?
Although the answers may seem obvious, she stressed the need of having a good understanding of these areas. In addition to these questions, you should have a plan for what you want to accomplish in the next 6 – 12 months, what you need to get there, and how you will use the funding to help you. Having these answers will put you in a good position to begin looking for funding.
It’s all about the relationship
No matter what type of funding you’re looking for, Shayn, Kevin, and Kathryn agreed that it’s all about your relationship with the investor and that that relationship is a long-term one. Even if you think it isn’t the right time for your venture to bring on investors, it is the right time to meet them. Investors themselves want to meet and develop relationships with ventures before they reach the funding stage.
If you want to secure funding from a certain investor or fund, you should get to know the key people ahead of time. Whether that means looking them up on LinkedIn, asking mutual connections about them, or meeting with them in a casual environment, it is sure to help you be successful. As Shayn stated: “You’re never going to get to the term sheet if you don’t have a coffee first.”
Your relationship with the investor is a two-way street. To be successful, there needs to be alignment between all the parties that are involved and what each party’s goal is. You shouldn’t only focus on getting them to understand what you’re doing, but should also try to understand what they are doing. Investors tend to approach the first meeting with the goal of learning more about the person: they want to know who you are and why you’re doing what you do. It’s more about personal facts than business ones – although you should still have your business plan ready.
Where to start looking
Begin your search by looking for Venture Capitals that invest in what your business does. By directly going to highly aligned social funds, you will have a higher chance of being successful in securing funding.
Pitch events are also a great way to be exposed to lots of investors and provide an opportunity to receive feedback. Kathryn highlighted the DMZ and National Angel pitch events as a good place to start. It would also be beneficial to take advantage of Regional Innovation Centres (RICs). In Toronto, MaRS offers startups with free advice and support as well as grant and funding opportunities.
The panellists also stated that the Venture Capital space in Canada is very connected. They are always talking to each other and there’s no better way to meet someone than through a mutual connection. You should always be talking about your business – not selling, but talking. Don’t limit yourself to people within the social investments industry; talk to anyone and everyone about what you do because you never know who others know. Don’t discount anybody because there is always the chance that they could be the “beacon of connection” to the investor you’ve been looking for.
How to shine
All three panellists offered a different view on how a venture can make itself stand out from others and appeal to investors. Kathryn said that the social venture’s representative is attractive when they have “the energy, passion, and conviction backed up with hard facts, realistic plans, and a team that can execute.” Shayn stated that honesty and integrity can go a long way because the way you treat your customers and your business show how you will treat your relationship with the investor.
Kevin highlighted the need to be knowledgeable about your business and the industry. That being said, you don’t need to know everything. Being responsive to what investors are saying and asking can help you stand out. Incorporating their feedback into your plans, asking questions, and following up with them on questions they asked you that you didn’t initially have the answer to help show that you are invested in building a strong relationship with them. He also advised focussing on your passion for your business: “When you are pitching, it’s going to be nerve-racking. Focus on the business and how excited you are about telling the story and that will come through and make you shine.”
Join us for our next EdTechTO event!
Peekapak hosts regular meetups for EdTech leaders in the Toronto area. If you are interested in joining our invite list, send a message to hello@peekapak.com and we will be sure to invite you to future events! Our next meetup will be on November 20th.
