Startup fundraising moving up

A few weeks ago I read a blog post that gave me goosebumps.  Brad Feld, another venture capitalist blogger I like, posted an email he had recently received from an entrepreneur on the fundraising trail, describing "the ether" between an entrepreneur and investor:

"In the ether, all things that can make or break a deal exist: idea, market risk, technical risk, team competence, economy, deal flow, competition, VC mood that day, entrepreneur pitch that day, first impression, gut feel, blog post for or against the idea read that morning, breakfast/no-breakfast, bias for or against, smarts or not-so-smarts of the VC and entrepreneur..."

It pretty widely known that raising money can be difficult in the best of times, and almost impossible in the worst.  Despite the economic downturn, I know several startups in the process of raising money. After all, innovation and creativity don't dry up just because the economy has tanked.  As the market has begun to thaw, stories of success have begun to trickle in.

One such example is a local startup and LaunchBox Digital portfolio company, SEC Watch, which has recently experienced some fundraising success. SEC Watch's founder and CEO, Jason Zucchetto, discussed how his methods. 

What was your approach to fundraising?

"I set everything up so that we could go a year without raising money, as a worst case scenario. It involved maxing out credit cards, burning savings, moving out of my condo and more, but we could make it.  This way, when we approached potential investors, it was not about getting a lifeline--I knew we could survive either way--it was about giving them the opportunity to come on board with a vision. 

What has contributed most to your company's success so far?

One of most important lessons for any start up, not just mine, I believe, is to create a feedback loop as soon as possible.  Get talking to potential customers and start getting feedback yesterday. I've seen several companies, and I've done this as well, spend an awful lot of time building a product, then keeping it in closed alpha for ages.  But until you are hearing from your customers and users, you are just speculating.  That's an expensive speculation!

What is the failure you are proudest of, personally?

SEC watch is the fourth or fifth business that I tried to start.  I'd get home after my day job and program all night, be exhausted when I went in the next day.  But I kept going.  It was an iterative process, and I definitely learned a lot from each business. I'm really proud I kept going.

Final outcome aside, what would make you look back at this period and feel like it was a success?

For the company, it would be having users satisfied with the product, and competitors taking us seriously as a threat.  Ona personal level, I already feel like this period has been tremendously successful because I now know 100% that I want to run my own company and be an entrepreneur forever.  I'm very sure of that.

By

Alexis Rodich

 |  November 17, 2009; 3:15 PM ET Save & Share:                 
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