Talking about money can be an uncomfortable topic, but the Founders series was designed to touch on all the different topics entrepreneurs have to face, and that includes talking about getting financing or funding for your business.
Our panel of entrepreneurs shared the highs and lows of securing capital for their businesses and the lessons learned along the way.
In addition to the highlight video included above, you can also watch the entire event here to learn more about how to get funding for your business and how these entrepreneurs approached raising money for their own businesses.
Attendees were able to gain valuable insights and get answers to their burning questions from Colin Knox, CEO and Founder of Passportal; Kelby Price, VP Corporate Development at Labrador Technologies; Amanda Hehr, Co-Founder of UNDRCARD Boxing Studio; and Helcim’s own Nicolas Beique.
Here are some of our favorite insights on the difficult topic of raising capital and approaching investors for your business:
Question 1: Do Investors prefer investing in a partnership vs. someone who is a solo entrepreneur?
Kelby – Having co-founders has been beneficial, but there is a difference in having two or three co-founders and having four or more co-founders. I found that the accelerator programs in the tech space put an emphasis on the companies that have two co-founders.
Colin – If you can find the right founders it’s amazing, but you’re not at any disadvantage as long as you can recruit and hire good people and build a strong management team.
Question 2: When you’re taking your first investment, how do you come up with the number you need? And how do you come back and ask for more if you run out of money?
Nic – That original seed money, especially coming from angels or family, is a valuation that is completely made up.
Colin – As long as your pitch is passionate, that’s the biggest thing about getting the money. When you run out of money, you better have a good reason.
Amanda – Complete your evaluations using proforma financials. Usually, investors want to see 2-5 years and using your earnings EBITA number you have a valuation based on a multiple that is an industry-standard.
Question 3: What are everyone’s hot tips on finding resources on grants and other funding options that are available?
Nic – The SR&ED tax credits, if you’re thinking about doing anything tech-related, the Canadian Government will give you back some of your development costs.
Colin – The best starting place for us when it came to grants was the NRC (National Research Council), and they can help introduce you to other government funding programs. Other options are Western Economic Development and OCIF (Opportunity Calgary Investment Fund).
Kelby – Accelerate Alberta and Alberta Innovates have provided excellent representatives to support you and who can help introduce you to other people.
Question 4: If you could go back and do it all over again, knowing what you know now, what would you do differently?
Nic – Today, I would do it quicker and go get investors. But for the beginning there’s something to be said about seeing how far you can get on your own, this helps you understand yourself and your pain tolerance.
Colin – I would still tell myself to take the money earlier, but I do believe that everything has happened at the right time and as it was supposed to. Timing is very important, and I don’t believe the market was mature enough for what we were doing at the beginning.
Kelby – My biggest piece of advice is to choose your partners wisely, they can make or break your business and your ability to raise capital and finance yourself.
Amanda – I probably wouldn’t change anything because I’m sitting here today, having learned all these lessons and I am stronger for it. But I love the idea of vesting equity and ensuring people pull their weight before they can unlock additional equity.
A huge thank you to The Ace Class for being our event partner in this series and helping us share these entrepreneurial stories with everyone. We hope to see everyone at the upcoming events!