|
|
-
Q. What is the Venture Pipeline?
A. The Venture Pipeline is a DLA Piper business unit that focuses solely on helping emerging growth companies raise money. Led by business professionals with experience in technology, startups and capital markets, our Venture Pipeline group actively advises entrepreneurs on the business issues that matter to investors.
-
Q. How does the Venture Pipeline group work with companies?
A. The emerging growth companies we work with tend to be at varying stages, with some needing more assistance than others. Typically, we advise on the overall executive summary, business model and fundraising approach. We work from the VC’s perspective – delivering critical feedback to the entrepreneur, with the idea being to rectify potential issues. Our ultimate goal is help the entrepreneur create a defensible, fundable and valid business story, then use it to connect them to targeted funding sources.
-
Q. What is DLA Piper?
A. DLA Piper is one of the largest legal service providers in the world. It formed in 2005 through a merger of unprecedented scope in the legal sector. Today, DLA Piper has more than 3,500 lawyers in every major business and financial market across the US, Europe, Asia and the Middle East. Our clients range from multinational Global 1000 and Fortune 500 companies to emerging companies developing industry-leading technologies. The Emerging Growth and Venture Capital group at DLA Piper represents companies and investors in venture financing and private equity transactions. The group is among the most experienced in the venture community.
-
Q. What are the key components that must be included in the investor pitch materials?
A. We believe the following elements should be addressed in the investor pitch materials:
- Brief history and description of your company
- Overview of market problem and target market (including competitors)
- Overview of products and services that address the market problem
- Discussion of revenue and business model
- Background of management team (summary)
- Summary of company’s financial performance to date (where applicable)
- How much money you need to raise and why
-
Q. What are the most common mistakes we see in the investor pitch materials?
A. Some common mistakes include:
- Grammatical and spelling errors
- Writing in narrative rather than outline format
- Misunderstanding the difference between total market and addressable market
- Approaching the financial model from the top down
- Leaps of faith (unsupported assumptions)
- Focusing on the technology and not the business
- Ignoring or dismissing the competition
- Projections that are too aggressive or too conservative
- Failing to provide your basic contact information
For resources on preparing your investor materials, please visit our For Entrepreneurs section.
-
Q. How long will it take to raise money?
A. The short answer is: it depends. There is no right or wrong amount of time to raise money. We’ve seen deals happen in less than two months, and we’ve seen deals take a year. Typical average is six to nine months.
-
Q. How many venture funds do you send my materials to?
A. The short answer again is: it depends. After the investor presentation materials are finalized, we will help you create a list of all venture funds that fit your particular business profile. We work together to pare it down to a manageable targeted list and systematically approach the agreed upon fund targets. We will not overshop or shotgun your plan out to the investment community. Typically, we send your plan to targeted funds, four to eight at a time, soliciting feedback along the way and refining the pitch, as needed. We seek your approval on every fund we send it to.
-
Q. How do you introduce our plan to the venture capitalists?
A. We know the vast majority of the venture capitalists that will review your plan. Once we have an approved list of targeted funds, we will forward your materials to our contact(s) with a brief overview of your company. Typically, this is an email message that highlights the positives and explains why we at the Venture Pipeline like the deal.
-
Q. Do you decline to work with certain companies?
A. Yes. However, we always provide feedback to explain our reasoning. In many cases, venture capital is not the logical answer for some companies. Often, we’ll suggest raising an angel round or bypassing the venture capital approach altogether. There are numerous alternative routes for raising money outside the venture capital channel, and we’re happy to provide suggestions. The challenge is that raising venture capital is a very time-consuming task. And if we’re leading you on, suggesting you can raise money, then we are taking you away from running your business, wasting your time and the VC’s time – and that doesn’t benefit anyone.
-
Q. How early-stage are VCs willing to go, and when should we seek venture capital?
A. This varies dramatically among VCs. Considerations from their perspective include the industry of the company as well as the experience of the management team. In general, your chances of garnering interest are greatly enhanced if you can show some form of market validation. One mistake many entrepreneurs make is to go out on the venture financing road too early. Nearly every VC maintains a deal database, and when they pass on your plan, it gets logged in as a “pass.” Once this happens, it is nearly impossible to get that VC to take a second look at your plan. Our goal is to work with companies before they start shopping themselves broadly. The good news is that we do know what funds invest very early, and, if need be, we will make a selected few introductions, to test the waters, before too many doors are closed. We adjust and modify as necessary for future introductions.
-
Q. Do you attend investor meetings with the companies?
A. No. We don’t attend the investor presentations with you. We want the investor(s) focused on you and your presentation. After your presentation, we will solicit feedback from you, the entrepreneur, on how the meeting went. We can also get feedback from the potential investors, with their candid assessment. We net the combined feedback and work with you on next steps.
-
Q. How does the Venture Pipeline get paid for its services?
A. The Venture Pipeline is a value-added benefit for DLA Piper clients. There are no fees to the company or investor for services or introductions.
-
Q. Most of my target investors are not located near my company’s headquarters. Can the Venture Pipeline help introduce my company to investors outside my region?
A. Yes. The Venture Pipeline is a nationwide group within DLA Piper. We have representatives on both coasts who can make the right introductions to the right investment sources. There are very few funds where we do not have a high-level contact.
-
Q. How do I get the process started?
A. You can start by sending your executive summary to .
Frequently Asked Questions
The DLA Piper Venture Pipeline’s mission is to provide value-added services to startup technology companies and the venture capital community. These are our most frequently asked questions.
|