 Hello, my name is Claire Fairfield and I'm the Chairman of the Venture Capital Institute, which provides training to new entrants into the venture capital industry. Thank you for joining us. I will be your moderator for today's Global Innovation through Science and Technology, or GIST TechConnect conversation on how startup investment works. Before we begin, I'd like to share with you an incredible opportunity from the GIST Network right now. We are accepting applications for the GIST TechEye Pitch Competition. This is your opportunity to receive valuable training, network, and to compete for more than $230,000 in startup resources. Applications are open now. You can learn more and apply online at gistnetwork.org. Through the lifecycle of science and technology-based startup, entrepreneurs will need different kinds of funding from different kinds of investors. Whether they're just launching or are preparing to scale startups, there is a need to understand the differences between each type of investment and when those types of investment are necessary. Remember, you can join the conversation by sending us your questions and comments through the chat space next to the video player or through Twitter at hashtag GIST TechConnect. Let me first begin by welcoming our panel of experts. Joining us today is Elizabeth Gore, the president of HelloAlice.com, an artificial intelligence or AI platform that connects entrepreneurs with curated resources, tools, communities, and opportunities to help their business grow. Welcome Elizabeth. Also joining us is Rosemary French, the senior program manager for product development at the Cancer Prevention and Research Institute of Texas, where she helps early stage biotech startups get closer to market. Hi Rosemary, how are you? Thank you Claire. Thanks to all of you for joining me today as well. As we wait for viewers to send us their questions, we would like to kick off the discussion by asking our panelists to quickly discuss the different types of investments startups that are out there that startups can receive. Elizabeth, let's hear your thoughts on the topic. Well thank you for having me and I'm so excited to see all of y'all across the globe. My heart is with you if you're thinking about starting or growing a company and there are. There are so many funding resources and the first thing I talk about with entrepreneurs is give yourself time to really study that because it's a full time job in addition to running your company. But of course there is the traditional, which a lot of people talk about, equity-based fundraising. So if you're giving up a portion of ownership in your company to investors or maybe to an enterprise company and they receive ownership and return to investing. And even with that, there are stages. So people talk about their friends and family stage, which is always tricky, but a good start, which is generally a very small amount of capital. And then it goes up to Angel Seed Series A all the way up the alphabet in a sense. But I really encourage people to also think about other areas. Loans and debt are not a bad thing. So especially when you're starting out, you're really thinking about how to get infrastructure, how to really build your company. Local banks, international banks, I think, are associations, credit unions are very positive areas for loans. I'm also a huge fan globally of microfinance programs as well as some government funded programs. Alice, helloalls.com, we actually started with a small business administration support. So many countries have the equivalent of the US SBA where you can actually go to the government, either get a loan or a grant as you start your business. Some countries also really incentivize loans and grants for women, ethnic minorities, military service professionals. So I would encourage you all to really think about that as well. And then there's a lot of things that don't people think about. In the United States, for example, and I know in the EU, I think we have folks watching from Jordan, they have this program where if you are a for-profit company, but you have a social mission. So you're helping disadvantaged groups. Sometimes you can get a unique tax status that allows you to get grants from nonprofits, even though you're a for-profit company. And then last, I'll just mention most government departments have funding mechanisms that might align with your company. So let's say you're in health and human services. The health department at your government might actually have grants, resources, or even equity-based funding. So, and then last is probably the newest resource for funding is crowdfunding. So if you particularly have a product-based company, I think crowdfunding is very interesting because in addition to getting funding resources from the public, it's a great way to lift your brand. But the best money is the money you have. So I would say make sure to manage your money well. Really think about your existing resources before you ever seek new capital. Great. Well, thank you so much. Sure, absolutely. That's a good start to our discussion here. Rosemary, you work with early-stage startups. What are some of the challenges and opportunities that you see that they face as they try to raise kind of that all-important first capital? Sure, Claire. So there's a common term in entrepreneurship that we're all familiar with. It's the phrase, valley of death. And it's used to describe the difficulty that essentially all startups face in the very early stages of covering negative cash flows in those early days before they've de-risked a technology enough to make it attractive to angel or VC investment. And that's why early-stage startups target many of these investment types that Elizabeth talked about, such as grants, family and friend donations, and even participation in pitch competitions, can help provide some of that early funding to prove your concept and make the technology more attractive to investors. Great. Thank you very much. And one thing that I would like to point out or just a point I'd like to make that builds on what each of you have said is that one thing entrepreneurs, particularly new entrepreneurs, need to understand is it's so important to be actually critical of your own idea because I've been an entrepreneur myself. I funded a lot of entrepreneurs. And when you're a first-time entrepreneur, you tend to think that you've got this one opportunity. This is your one shot at the brass ring, so to speak. And what's important is to recognize that once you've decided you're an entrepreneur, that is a lifelong affliction, right? It doesn't go away until you die and that it is a career, not an event. And as both of you touched on, that early money comes from very personal sources sometimes, your own money, your family's money, your friend's money. And so there are social as well as financial risks to not getting it right. And find those people who can help you in the ecosystem to be very critical of your idea because just because one opportunity may not turn out to be the right one for you, the next one may just be around the corner. So thanks very much for your insight. You said affliction. You said the valley of death. We're surviving. That's right. I love it. Absolutely. You know, I just thought of one more thing. So Chile, I know, is watching our friends in Chile. And they have a really interesting program where they're actually attracting entrepreneurs from outside of their own country to come in. And they give a certain amount of funding. They give space, access to Wi-Fi broadband, and so on. So something, it might not be cash. And just think about offsetting. We were just talking about how expensive rent is. That's a way to move money around. So there are ways to get other resources that aren't necessarily cash, but it will in turn help your cash flow. So that's something to think about, too. Absolutely. There's nothing wrong with free equity, right? Absolutely. Well, and you make a very good point. In a lot of early innovation system development, government can play a critical role. And I think what a lot of people don't understand is that in the US, our government through a government-backed program actually laid the foundation for our venture and private equity industries. One of my partners, as a matter of fact, held SBIC license number four in 1959. And funds as big as now like Sequoia actually started as government-backed venture funds. So I encourage governments to learn from around the world to learn from what we've done here in the US. Because I think some of the things we've done well, not all of them, but some of them. Agreed. Well, many of our viewers are early-stage innovators who may be seeking their first type of investments. Some common mistakes I've seen startups make as they raise capital is that they tend to think only in terms of the immediate need for capital. And they don't realize that you have to have a vision for your company, I believe. And I'm certainly open to commentary and disagreement here. But a vision almost to the end of the lifespan of the firm if you're thinking about how you're going to finance that company. Because you have customers in the financial industry just the same as you have customers that you're selling your product or your technology or your service to. Because as you move through the different phases of financing, I think it becomes critical to understand that the way you act today determines how you might be financed tomorrow. So would you agree with that? Disagree? Does that make sense? Absolutely, Claire. I very much agree that when you're going out and talking to investors, an entrepreneur needs to have that end goal in mind and to be able to clearly articulate their value proposition. And to communicate that value, you really need to understand the end goal. Who it impacts, who the payer is, who the user is. And a tool that I like to tell early entrepreneurs about is the Lean Canvas model. It's a one-page business plan that walks through all the key aspects of your business, the revenue stream, competitors, value proposition. And it's important to think through all of these aspects before you go out and fundraise, because investors want to know the whole story. Absolutely, great points. Well, we've got more questions for you, Rosemary. So as you've seen quite a few companies over the years now, what are some of the common pitfalls you see that startups hit along the way, those common mistakes? One thing that I advise entrepreneurs to do is to really build their network and make use of those resources. In the early days, when you don't have a lot of capital, you're going to be relying on the advice of the scientists and other collaborators that you're working with to build your technology, as well as other key industry players who will have insight into how your technology fits into the competitive landscape. And so it's important to build a network even before launching a business. Excellent. Elizabeth? Oh, there's so many pitfalls. I'd say bring a parachute, because they're going to have an everyday for the lifecycle of your company. A lot of bruises. But I would say, particularly in the fundraising strategy, is get to know and know fast. So I think a mistake I made is really being so heartbroken. I think when we did our seed round, we had 160 some odd nos to get to a million point two. And that was seven yeses, I think. And so what I would do is really try to convince folks, like come on, come around the corner again, ask them again when, in fact, getting to know fast and moving on was probably a much better way to do it. And that's because if it's not a fit, it's not a fit. And if folks across the room aren't passionate about what you're doing, if they don't understand it, it doesn't mean you're wrong. But that is not the right money for you. So I think, and that's really hard. I mean, as people know, if you're trying to make cash flow, it is hard to walk away. But it's important to get to know fast and also learn from those nos. So every meeting we had, and now we're in our, we're an A-level company, series A, I would take notes and come back to the team and see the patterns of yeses and nos. And you can learn a lot. When you get asked or dinged on the same thing seven times, you are clearly doing something wrong. And or we really shifted a monetization strategy because there was a huge amount of interest in one part of our company from a lot of folks who didn't connect with each other. And so that meant there is a trend that we're on that very smart people are catching and we need to prioritize. So I think getting to know fast, listening to those nos is as important as the process around yes. Absolutely, great response. Oh, go ahead. And to build on that, the getting to know, I think part of that is understanding the investment philosophies of different types of investors. So, and that can change with market trends. Like I was talking to a VC recently and he was telling me in the healthcare space, when you look at two big buckets, drug development startups and med devices, his firm is really only focused on drug companies. And that's because of the investment cycle of their funds. They only have 10 years to get to a close. They need to raise capital within that period of time. And so for that reason, they are most interested in acquisitions. And let's say they put 3 million into a drug development startup early on, it then grows and is acquired for 60 million. That can be a great win for them. They're actually more interested in those acquisitions than downstream royalties. And that's why they're focused on more on drug development companies than med device. So, if you're a med device company and you get a lot of no's from VCs, you may realize that it's actually more strategic for you to target angels. Right. Great points. Thank you very much. No's come slow and they're painful. And that's I think also we're having that experience. You know why an entrepreneur who's been through it once before is so valuable because they'll know that feeling when it's really going well, right? When you know you're gonna get to that yes, because it's a very different feeling. And to Bill and Rosemary's comment, at least in my experience as an entrepreneur and I've sat on both sides of the table as a venture capitalist and as an entrepreneur, you will not be the exception. So, if a firm tells you this really isn't what we do, but they're still willing to meet with you, that's probably a waste of everybody's time. They're being polite, but you will not be that exception that allows an investor to move outside of their lane, so to speak. So, great, thank you very much. Okay, now after that we've set the stage. Let's take some questions from our online viewers. We're really looking forward to hearing what you are interested in learning about here. So, here's the first question, and jump in as you will. When should a startup start considering raising investments? The day you're born. No. So, I'll say raising capital. So, I don't think everyone should give up equity. I feel very strongly about that, but I do think that it is a founder's job to really think ahead of the game on raising capital, and that might be your own financial management, that might be loans, that might be equity-based, but I do think you need to wake up every day really understanding that. And I also think about cash flow and that. So, that is a constant. One thing I just wanted to share that my co-founder Carolyn Rodds and I learned early on was we, I didn't mention earlier, I think something important is lines of credit. So, in most countries you can get a type of loan that's a line of credit that you can use or not use. So, let's just say a bank lends you half million dollars and it could sit there forever, or you can pull it in and push it out and there's a percentage on that. It's the best time to get a line of credit is right after you've just raised money, and that is not intuitive at all. It's certainly not something I thought of, but banks don't wanna give you a line of credit when you don't have any money in the bank. And so, the reason I bring this up to answer this question is you're always thinking about your capital needs and the second you raise a significant amount of money or you bring a lot of cash in the door because you've got a really good quarter in sales, I mean the best money is coming from your customers, right? Think about capitalizing on that for lack of a better term and getting more money and it can sit and then when you, there will be a time, I don't care how successful you are when you have cash flow needs to get more. So, that's one learning we had was we should have gotten a line of credit when we had a bunch of money in the bank and now we're doing very well, but at that time. So, I think you should always be thinking about your capital from the first day you start till you're about to IPO. Yeah, bankers only loan you money when you don't need it, right? That's exactly right. Yeah, yeah. Rosemary, any comment along those lines? One suggestion for entrepreneurs is they're building their fundraising strategy is to keep in mind that the type of investment you target often evolves over time. So, for example, at my last startup in the early days, we were funded almost exclusively through grants, funneled most of that into developing the technology to further build out the proof of concept. Then once we had that validation, we were able to attract VCs and raise a series A and a series B, but we needed those grants in the early days. That's a great point. There is a time and a place for the right type of investment. And I tend to equate, everybody gets enamored of venture capital, right? They want to raise VC money. Well, it's very expensive and it's very dangerous. It's sort of like rocket fuel, right? And not every vehicle needs rocket fuel and at different times. So, all right, we'll move on to our next question then. The question is, what specific information do investors tend to look for in a new investment opportunity? Want to start this time, Rosemary? Well, it depends on the technology, of course. In a healthcare space, of course, they want to see strong data for a drug, for example, safety, toxicology. You'll really want to understand what data points an investor is looking for and that's dependent on your technology. But in addition to the technology, the investor is really investing in you and you need to keep in mind that often coming in as a one-person show is not what an investor wants to see. It takes village, as they say, and you really want to bring in the right people with the different kinds of expertise to build your technology. And it's often important to bring those people to the table in your early discussions with investors. I mean, for me, it's one word and it's money. I mean, an investor's job is to make money for their LPs, a banker's job is to make money for your shareholders and so it's really important to walk in the door with six or seven ways that you're going to make them money. The one subset of that that I'll just say is there is a growing group of investors who believe in impact as well, which we care about a lot. So whether it's, I agree with you on data and numbers and that numbers might be focused on projected sales, value, equity, so on, or it might be on impact, which I really believe in social entrepreneurship as well. But having your numbers, presenting those first, I do believe in teams, I think that's really important. But I really think folks get so passionate and I do too about what your belief is and what you're doing, but you have to start even on the impact space with what are your financials, what are you projected to make, what are different scenarios for those and just open with that every time. Great, thank you. And often that involves communicating the understanding of your timeline. So this is how long we're gonna get to point A, point B. At this point, we're gonna launch an initial version of our product, showing those revenue streams and when they're gonna come in. Great, thank you. Interesting question. The next one in question is what is the difference between an angel round and a seed round? I feel like you should answer that, Claire. You're the expert. Fair enough. My opinion on that is that it really is just the nature of where you get the money from. Usually angel investors are seed investors because seed is the very, very first money that you raise. And then there are angels who then do seed investing. There are funds that do seed investing as well. So what's really an angel is really sets that investment apart simply by being from usually an individual or a group of individuals as opposed to professional investors. Sound good? Yeah. All right. We have a question from Ecuador and the question is, based on your experiences, which ones are the emerging areas that investors prefer? Do they consider minority ownership, for example, by women? So I guess we'll take the first part of that question. What are the emerging areas? I'll take the women's side of it. You take the emerging areas. There's all kinds of hot areas in investment and it depends on what kind of investor you're seeking. You see so many examples in the news of blockchain being really hot, AI, but it may or may not make sense for you to try to target one of those areas. Investors really wanna see community impact, how it's gonna affect people downstream and how it's really gonna move the needle for patient care and the case of healthcare. And then going to women or to your words, minority-owned and thank you for the question. So what I'm excited about, I have a nervousness and an excitement. So we'll call it a problem opportunity, is that we are seeing just exceptional data, much of it from your organization that shows that when women get equal amount of capital as their male counterparts, they generally outperform, and which is really exciting because there's the social values of knowing the absolute important, importance, excuse me, of investing in women, ethnic minorities, underrepresented founders, but then I like the narrative changing to show that they're very good at their jobs, they're gonna make a lot of money for investors, so I think that's very important. My nervousness is venture capital has gone down even with all this great data in women and globally, which is not good. And frankly, if you look at it from a capitalistic standpoint, it doesn't make sense because women outperform, and if you look at it from a social values standpoint, it doesn't make sense. And then also women put 90% of their income back into their communities and families. So from a social economic bet, it is very critical. So if you are asking this question and you are a woman and I encourage you to hit it hard, you're gonna kill it, knowing that we do have to work a little harder, show your numbers first and get out there, but you're gonna outperform and you're gonna do great, so. Thank you, great comments. All I just, a couple of comments of my own. I think another topic for a completely different discussion the other day is the irrationality of the venture capital markets right now. Everybody looks to Silicon Valley as this land of milk and honey, so to speak. It's been a fundamentally broken model for quite some time and it's reflected in what you're describing about with female entrepreneurs because I'll just put my investor, a mercenary hat focused on money. What I think is fabulous right now in terms of investing in women entrepreneurs is that there is such a pent up demand and there are female entrepreneurs who have waited so long that almost by a Darwinian mechanism, they're going to be the cream of the crop for quite some time, right? Because the fact that they're there actually shows a determination that historically VCs would really enjoy. And then also to build on your answer about the hot areas. One thing entrepreneurs I think need to understand is the areas that are hot today, they're exciting and maybe they attract investment. But what we look for when I say we, I think kind of the entrepreneurial based VCs, we look for passion in what someone has and you don't really have passion if you're trying to game the capital markets at the end of the day. And even if you get really excited today, the challenge of venture capital, the challenge of innovation, the challenge of entrepreneurial growing companies is we invest today, but we actually have success and harvest many, many years in the future. And it's really the exit markets that matter. It's very easy to start companies. The other end can be a little bit more difficult. So great points, thank you. We have another viewer who asked, when someone wins a pitch competition, this is a great question. What happens next? How can winning a competition be leveraged into additional investment? And I think that's a bit of an open question. Yeah, yeah. I go back to your point about networks and relationships. So pitch competitions, I think are great for a lot of reason. They build your brand. So you're pitching in front of an audience, whether you win or lose of potential customers, investors, partner. So I'm a big fan of them. Part two is let's say Salesforce is, Salesforce and Dell are giving a sponsorship for that pitch competition of $10,000, right? And you win. The first thing I would do, the money's great, but I would say, can I come in and sit with you and meet with you? This is so exciting. I would love to learn more. And you leverage that entry point into, you know, $100,000 later or a bigger relationship. So I really think use those pitch competitions as an entry point to the people in the audience, the judges, the folks that are sponsoring you and then, you know, be really smart about social media. Generally things will be trending around a pitch competition. I'd have someone on your team grabbing onto that hashtag from your company's social media and pushing all day long as you're in that pitch competition to raise your brand profile. And we have on HelloAlice.com a lot of resources for folks that are, how do you enter a pitch competition? What does my deck look like? How do you leverage? Because we do feel that it is a really interesting model that helps and they're all over the world. I mean, I guarantee you there will be, there's some in your city or near your city. So. Absolutely. To build on that, one CEO I was talking to recently, she's told me that she's used pitch competitions quite a bit to raise money for her company, but the real value that she's seen in that is the network that she's been able to build. Coming from the technology side, she did not have many people on the business side in her network and she knew that she needed to build that. And so when she would go into these pitch competitions, whether she won or lost, she would make sure to introduce herself to the judges. And some of those judges who were angel investors later became mentors for her company. Great answers and I can't emphasize enough what you both have already emphasized. This is a people business and it comes down to relationships and any access you have to creating a new relationship, that's a huge step forward. Okay, a little bit of a chicken and egg question here is our next viewer is asking us and that is how can we get seed investment when we don't yet have a company established and we can't establish the company without seed investment? I mean, I don't think you should be going personal opinion after seed investment without an established company. I mean, that's kind of a tough thing. So I think you should have a very well-informed business plan where you're headed. Hopefully you have advisors on your team already. I would really struggle just giving money to an idea that's not a well-educated idea. On the flip side, particularly in technology, to get to an MVP minimum viable product, so pre-product launch, many folks including ourselves get investment but that didn't mean we didn't have a well-formulated plan, a plan that changes but plan nevertheless. What is our product market fit? Where are we heading? What's the funding we're looking for? Who's our customer based on this? And so I think there's a lot of steps before you go after any kind of investment. It doesn't necessarily mean you have a product in the market but you should be very well-established. Right, to build on that, I would advise entrepreneurs to build on their network as we've been talking about. And one mechanism to do that is to join an incubator where you'll be surrounded by other entrepreneurs like you hitting the same pitfalls, looking for capital that may be specific to your region. And also leveraging partnerships. You may be able to access grant funding for example through a university by partnering with a technology developer there. So depending on the type of technology you have, you may be able to leverage your network in that way. Great, thank you very much. And I think at least in my experience, sometimes if you're at that level where you need to have seed capital just to start a company, you can really start the company by being very well-prepared and just talking about it. You don't necessarily have to have spent money with an attorney or an accountant or anything like that. We have another viewer from Windhoek Namibia who asks, how can I meet my obligations to show my investors the returns they want while still maintaining a socially responsible posture when sometimes those two things may come into conflict? That is a tough one. I love Windhoek High Namibia. So they shouldn't come into conflict. I know that's a very idealistic thing to say, but the day that you step back from your values, your morals, the heart and passion of your company, you will not be successful. You might get money, but I think the long term of that will go downhill fast. And so I think really good investors, you should be very transparent about we are not gonna make XYZ benchmark, which I guarantee you one time in your company or 50, you won't for a million reasons, but being transparent, being very clear on that. We call it failing fast, failing forward. Here's where I'm not gonna meet my objectives. Here's how we're gonna pivot. This is where we're headed. And I hope the majority of your investors will be okay with that. The ones that don't and want you to creep away from your values, I don't think you want them in your cap table. So this is something I feel incredibly strong about. And I think you see companies that are winning today because they did not walk away from their objectives, their morals and their passions. Obviously I feel very strong about this. Just a quick editorial point. When Elizabeth says cap table, what she's talking about is the list of owners in the company and what percentage they own. That's one of our little terms of art here. Do you have a comment along those lines, Rosemary? Or should we move to the next one? I'm trying to remember. Sorry, what remind me of the topic? What happens when sometimes when the goal of profitability or income conflicts with social responsibility? All right, so I agree very much with Elizabeth that the two things are very much not mutually exclusive. Arguably, if you're a good steward of your product and your business, you want to build a very profitable business. And that business will create more jobs. It will stimulate your local economy. So capitalizing on your technology and having a social impact can come together in tandem. And I think this illustrates a point also that Elizabeth touched on a little bit. And that is, pay attention to who your investors are. And it sometimes can be hard to walk away, right? Because you're always starved for cash. But usually if you spend time with people, they will show you who they are. And if there's clearly somebody who is wants to cut corners or is just entirely motivated by money, that could be a dangerous partner long term. And I'll get a little bit more granular into legal for a minute. And please have a good lawyer no matter who. Every company needs a good lawyer that you trust. But we do have a code of ethics in what's called basically our agreement, our term sheets, when an individual, a VC, an enterprise company are investing in Alice. And we're very clear in what those code of ethics are. Alice's entire objective is to help small business owners launch and grow, but particularly people of color, women, folks who are just generally not supported. And so we're very clear about that in our code of ethics. And if that investor does something in their own life or in their own objectives or asks us to breach that, we can legally break that agreement. So I really encourage folks to think about that, because otherwise it can be technically hard to walk away. And so I think that's getting to be a lot more common practice, which excites me. And it can't be fluffy. It has to be very clear. But it is something I would encourage, because some folks put on a great song and dance even the first couple of years, but when things get hard, you want that in writing of what are your values, what are your ethics? I mean, in health care, this is a huge deal. So I would just encourage folks to get into the weeds when it comes to values, because it does make a difference later. Well, and not only will your investors be doing due diligence on you, you should do due diligence on your investors as well. Particularly if you could find entrepreneurs where they were in deals that didn't go so well. There's an old quote from an American Civil War general who said that war is the ultimate test of character. It makes good people better and bad people worse. And what we do for a living actually illustrates that on occasion. I agree. Yes. I think the kind of investment that you target can also help you with those decisions. So looking at non-dilutive forms of capital, such as grants, can help a CEO maintain, control the company for a longer period of time. Often, an entrepreneur might be enticed by the big dollar signs offered by VCs. But what they don't often realize is that the CEO role becomes more replaceable once you lose control, so to speak. I've known CEOs, for example, that have funded their companies all the way to product launch on the international scale entirely through the use of grants prior to the company being acquired. Great. Thank you. Well, we're going to take a little station break here just to say hello to those of you who are just joining us now if you didn't have a chance to join us right away. Welcome to the Just Tech Connect conversation. And we look forward to getting your questions and input on how startup investment works. I'm Claire Fairfield. And I'm chairman of the Venture Capital Institute. And I'm joined by my fellow panelists, Elizabeth Gore and Rosemary French. We're still alive and taking questions here. So any viewers out there, please submit your questions through the chat space next to this video or on the Twitter using hashtag Just Tech Connect. Here's a question I have for you, for each of you. When would you recommend a startup not raise funding for their venture? Let's start with you, Elizabeth. So we're talking about giving up equity. No, I think the question is along the lines of, when would you recommend just not looking for investment? Maybe it's, are you ready for investment or is the timing right? I'm interpreting a bit here. Sure, sure, sure. Never if you don't need it. I mean, listen, again, the best funding you can get are from your customers. So if you can start cashline to your own product that is a million times better scenario, than getting any type of investment. And so, and that also means how you manage your own money. I'm really not a fan of the folks who, you asked about their company and they say, we've raised $30 million. I'm like, I don't care. How much money have you earned from your customers? So I would say, if you are cash flowing in a way from your customers and or from other reliable sources of capital, there's no reason. I think when you start, even if you are cash flowing, start looking in that direction as you wanna jump. It's you wanna blitz scale, you wanna head towards an acquisition or IPO. So it is time to infuse a larger amount of capital. But I completely agree that the longer you can go and maintain control, focus, and then the biggest thing for me is time. It takes a lot of time to raise capital and find any type of investment. I find it as a full-time job in top of my full-time job. And so, if you can put that time and energy as a leadership team into your product, your customers and your employees, versus into third parties, I mean, that alone is a reason to wait. So, you know, so I'm a fan of waiting as long as you can. Great. Rosa Barrett? You know, you don't have to go out and be actively worried about investors, but there are predatory investors. There are bad deals. My advice to early-stage entrepreneurs is before you sign on to a new investor, talk to your advisors, talk to seasoned serial entrepreneurs about what a good deal looks like. The choices you make in the early stages can have serious downstream effects. For example, when you're looking at taking a loan from a family member, you wanna think about very carefully whether that's gonna look like a gift or a loan. Oftentimes, that's more advisable over giving a family member equity. If you have a cap table that already has a lot of people on it, before you go to angels or VCs, that may make it more difficult for you to raise angel or VC money. So, being a good CEO is thinking about being strategic and what kind of investments you bring on even in the early stages. Great. Thank you. Oh, now we'll go back to some viewer questions and some of our online participants. We have a question from Grace and our Greek friend is wondering, is it common for startups when they get their money to spend through that money quickly? I mean, what is the pace of spending that is typically seen by a startup? And I think there are many facets to that question, but let's take a shot at it. Well, it shouldn't be the goal. I'll start there. I mean, your goal shouldn't be to spend it down. I have two thoughts on that. Well, our CEO, Carolyn Rodds of howwells.com says, I wanna stay as lean as possible as long as possible. I've always really respected that. So, I do think you always should raise a little bit more capital than you think you need, particularly women. We tend to be a lot more frugal, longer. And so, there is no perfect number here, but I would up at least 10% of what you think you probably will need. If you don't need it, don't spend it. And so, but again, the time you're gonna take to go out after that capital, adding a little bit more on is probably not gonna hurt your equity too bad and it gives you time back later. Now, before you ever step foot out to raise that money, I hope you know the pace at which you're probably gonna spend what is gonna be spent on and so on. And so, it is not a bad thing at all not to spend all the capital. And I really don't think investors expect you to spend that down. And so, on the flip side, if you are just growing fast and you need to spend it and you're moving quickly, then fine, but hopefully that is the plan. So. You also wanna think about how far down your development timeline that money's gonna take you and be careful about what you spend the money on. I've met CEOs who've gone six, seven, eight years without paying themselves. Brandon, some entrepreneurs may not have the capability to do that, but the reason that those CEOs have made that choice is because they want to get the technology to a significant milestone for that next round of funding. Another piece of advice is to raise money before you need it. So before you run out, it's you need to be actively fundraising typically all the time. Like you were saying, Elizabeth, it's a full-time job. I would agree with all of that. And I think that was a great job on that because that was a difficult question to answer because it really comes down to how did you raise the money and for what purpose? So it could be raised based on milestone funding to be burned through fairly quickly, but that may mean a smaller amount of money. So like many things in the world we're talking about, it all depends, right? So we have another viewer in One Hook, Nambia, Namibia, excuse me, who would like to know what a startup should look out for when searching for investors. How can we tell if an investor is a good or a bad match for our startup? You know, you wanna look for an investor who's gonna be a good mentor, someone who's been in this game for a while, someone who ideally is from your industry. If they're new to your industry and don't know the space very well, it may be unlikely that they'll be a very good mentor for you. A mentor can be someone who gives you advice. It can also be someone who makes key introductions for you for corporate strategic partnerships, other investors, maybe access to key industry players who can really inform the avenue that your technology may go down because often you may target one market segment and then once you've done some of the early validation work, you may realize that your technology is a better fit for a very different market segment. And so having those right mentors early on to help you identify some of those key aspects of your business plan will be really important. I feel very strongly about this one. I'm gonna sit up in my chair. All right, let's go. And so the money is important and obviously that's first, but we talked early about values and I cannot iterate that enough. And then to your point, what are they bringing to the table in addition to that money? Obviously their Advising Council is critical. Can they open doors that you can't? I think that is big. So what are their relationships? Who do they know and so on? Can they bring other money to the table? So and are they valued in the investing space is really important. I had no idea how much our first couple of investors would influence. This is like the second question you get asked. Who else is on your cap table to your point? The chart that says you own your company is big. But the last thing I'll just say, particularly for a president or a CEO, your bigger investors are your bosses in a sense. Now you make the final decision, but they have a lot of influence and it is very important that you have a communication style with them that's gonna work. You have the ability to interact. You have the ability to disagree in a very positive way. We had an affirm that we wanted so bad. And we got to where there was an offer on the table and the person on the other side called me on a Saturday night and screamed at me and that person knew that my daughter was sick that night. And it was, and we had not signed a deal yet even. And it was so shocking to me and it was heartbreaking because we really liked this firm. And we liked, even like their values, I mean, everything was there, but the point of contact that we would be working with for years did not share the same, the way we would wanna be treated. And so we had to walk away. And I am so grateful to that because what I had now heard that that's pretty common with this VC and this firm and this human. And so, and I wanted that money really bad. And so I say that because when, not a grant or so, but if someone invests in you, they have equity, they have ownership, it is really like your boss at work. And so ensuring that you're on the same page of how you're gonna work together and so on, I feel is it critically important. And we're lucky at Alice, we have awesome investors now. And some of that is by, we were not savvy on all this when we started, by any means. So some of it's a bit of luck. And now we're really very choosy, but the values that communicate in style and then to your point in a huge way, what is the network and the entry points that they're bringing? Great, great comments. Oh, go ahead, Rose Brown. It's good to keep in mind too that once you have investors, you then have to figure out how to manage them. So let's say you have 500 angel investors, right? I've talked to CEOs who have a lot of investors and I asked them that question and they tell me the reason, the way they do it is they get them involved in the company. They'll send them periodic updates. They'll have quarterly calls where all of them can call in. They will ask specific questions to different investors depending on their backgrounds, getting their advice. So getting them involved in the company and having them not just be invested monetarily, but be invested in other aspects of the business. Can I add to that? You just reminded me. One of the things that we've started unintentionally is now that our team is larger, some of our investors are directly engaging with some of our team members because there is an expertise there, whether it's technology-based or it's marketing-based or so on. And I think that's very positive that, again, there's a, to your point, in a personal investment, you're getting to know the team, there's that, takes a little time off my plate and they are directly engaging with someone they're mentoring and impacting. So I found that to be a very positive move. Not everyone's gonna do that, but the folks who are, I think it's great. Yeah, and I think one of the points to take away from what both of you said is, oftentimes people tend to define what we do in terms of money. And while money is the most important catalyst, it's the least important success factor, right? It's all those other things that came along with the money that really contributed to the success more than just the money itself. And so those are great points, thank you. We have a viewer in Venezuela, a very relevant question for them. How do you recommend predicting a sales forecast in a country with high inflation in order to secure some of your seed capital or your early capital? Well, you get out a crystal ball. And then you, no, I'm kidding. Oh yeah, that's a hard question. I think being realistic and transparent and then having multiple scenarios in, you know, Venezuela, ups and downs, but also a lot of opportunity, a lot of innovation. But in any company, I think looking at if the economy goes this way, this is the scenario we're gonna work. If the economy goes this way, this is the scenario we're gonna work. Same thing with inflation, same thing with value of your currency. And so as an owner, it is really important that no matter what, I feel like you're working multiple scenarios. And, you know, savvy investors will understand that, but they're gonna wanna see plan A, B, C and D and F, you know, as you go through that. So I personally think that that, no matter what market you're in, is the appropriate way, but you might have other ideas. Right, I think it can really depend on the technology too. If you have a technology that has broader impacts beyond your local community, you may want to look to what other kinds of investment is out there for you outside of your country. So let's say you have a technology that targets a specific disease, you could go towards the foundations that have money for that disease and see if they may be able to make an early donation. Also, looking at the broader impacts of your technology may help you find avenues for where that's gonna go. And so you may be able to pitch the technology to other markets that are similar to yours in that sense. And one thing I might add to that is, if you can measure it, and usually we can measure, whether it's products or services, there are units of delivery to be measured and make sure you project both financially as well as focusing on the units and that attempts will be made of course to price it at the then current market rates based on inflation and that, but making sure you set up some milestones that show success or at least progress that may not be in those situations easily measured in a highly fluctuating currency market. So now a question from Ecuador. What are the most important market and economic indicators that investors look at when they evaluate funding of business for the first time? So I guess a little bit more of the macro question there. Economic indicators. They're usually looking at how much they can profit and how soon. Yeah, speed. How quick are you gonna get to market? How many units are you gonna sell? What price? In terms of the larger market, they wanna see how you're, they wanna see both your understanding of your market and how you're gonna impact that. So let's say you have a technology that's gonna be used in the hospital setting. The end user is gonna often be different from your payer. So maybe the hospital's paying for it, but it's being used ultimately by a patient. And so they're gonna wanna see your understanding of that whole complex landscape. Yeah, I think every pitch deck should have a slide that's called product market fit. And that's really showing when your product is gonna get to market, who is going to use it? Are there products like it already out there? I mean, those are things that I would look at as an investor very quickly. But I think that's, understanding what those indicators are and making sure that you're educating that investor on those is important. A lot of times, investors wanna see in a pitch deck a slide that shows your competitive landscape. So like you were saying, so who are the key competitors? And then what advantages do you have over the competition? You wanna be able to check the boxes across the board for all of the product specifications that you lay out. Yeah, and competitors, by the way, are a good thing. I always thought, oh, we don't wanna show competitors, but in fact, I think it gives a sense of comfort that this is a product, software, whatever it is, a service that is understood by the market. We really struggled with Alice because we were at the time so unique of finding competitors, but we were pushed really hard to find pieces of them then and put them in because it helps people understand. What's already out there? And so that confused me early on is why would I wanna put my competitors in there? But I think it does give a sense of product market fit. This is a adaptable technology that's already out there. And then who are they benchmarking you against, which they're gonna ask their associate to do the second you walk out of the room anyways. I think those are great points because, I can tell you, putting on my venture capitalist hat, somebody says we don't have competitors 99% of the time, that's the end of the discussion. But also there's always, even if you truly have something unique, the customer can still choose to say no. And so there is a competition in that form as well. And to your point again, Elizabeth, customers are great because they allow you to compare yourself to those customers and why you're better, right? And that's a big part of it. Okay, we have another viewer who wants advice on how to formulate investment strategies for targeting big time investors. I assume that means large institutions are big named individuals that at the same time, won't cut off opportunities for bringing in smaller investors. And I think that's a little bit difficult, but maybe I'll take a stab at that one, is that okay? I would say they aren't necessarily in conflict because unless you need a, and maybe in Rosemary's world, this can be the case, you need a fairly large amount of money upfront, but with many opportunities, you need smaller money upfront to get to where you really need the big money. And so I think Parvath is saying, looking at that opportunity and saying, do we really need this huge amount of time, or excuse me, huge amount of money right upfront, or does it make more sense to use smaller money? And that's how we actually validated ourselves up for the larger investors, because in my experience, if I'm understanding the term big time investor properly, you have to simply be of a certain weight and mass, oftentimes, for those investors to be interested in the first place. And usually that takes a little bit of smaller money to get there and just tell your story that way. I guess that's my response to it, if that makes sense to any thoughts on that? Only relationships, the only thing I would add, you said build your network. I mean, there gets a point in a level of funding where immediate trust is just gonna speed things up. So cultivating relationships with the big time operators before you need them, going to events where they're at, going to networks where they are meeting them to get advice and counsel before you're asking them for money. I do think that you need to put in your time before you get there. So while you're getting the small money, start developing those relationships so that it is not a cold approach when you do head towards that. I think in the early stages, as well as later, you're gonna wanna get counsel from seasoned serial entrepreneurs on building that cap table. And different investors are gonna have different mindsets. An early stage angel may look at their investment as a bit more philanthropic, knowing that they're gonna get diluted down once bigger money players come in. And so talking to CEOs who've done this before about how they've structured their cap table, talking to VCs, talking to angels about what they wanna see as the outcome for the investment, what they wanna see on their return can help you in building that strategy. Okay, great. All right, it looks like we're down to our final question. The time has certainly flown by. Our question comes in from Guatemala and says, what is the most difficult and valuable lesson you have learned as an investor? And what caused you to learn that lesson? What was the situation that generated that learning, I guess, and what can you do to prevent it from happening again? So many difficult lessons. Right. Wow. I think I'll go back to the walking away piece. I love to win, y'all. I love it. And I want people to love us and hello Alice. And so you can certainly bring the wrong investors to the table when you have that kind of fervor and passion. So, and I also, I move at the speed of light. So I'm just, I want things to happen so fast. And my co-founder is more thoughtful than I am. And she's really thinks things through and wants to take time. So we're a good balance for each other. But I think we've both learned that the biggest mistake you can take is, do is taking the wrong money. And the wrong money might be based on a human. It might be based on the type of funding. It might be based on the fact that there was better money over here that could have gotten us a lot more leverage. So, I would say, and I'm sure I'll make that mistake again, but I'm trying to get better at it. And winning means different things to different people. But sticking with the values piece, making sure it's the smart money, I think is a really way to say it, is what I've learned. So, still learning every day. I'm sure I'll learn something today. I think one of the greatest takeaways that I've had is the advice people have to fail fast and fail often. And to understand that failure is actually a positive in this business. It's looked at as experience. You have a CEO standing up there pitching, saying, I started three companies and I lost all of the investor's money. But then my fourth company, I had this big exit. Those are the ideas that investors pay attention to more so than that first idea. Because they know that the CEO will learn from those mistakes and build on them. And so, it's important to know that you may take the technology in a direction you may have not thought of the first time. You may abandon the first technology and take on a second one. It's good to be open to pivoting in this business. Yeah, great comments. I would agree with each and every one of them. It is an experience-based business and good judgment comes from bad experiences don't kill you, right? And as some of my colleagues would say, they'd prefer to invest in the type of entrepreneur that Rosemary was describing because somebody else got to pay the tuition for that education along the way. Yeah, I want to teach her. It says, I'm a successful entrepreneur because I have bad judgment. Wouldn't be great. That would be a good t-shirt. And from an investor standpoint, what I have seen over the years, and I am fortunate, I get to spend a lot of time with a lot of the senior members of the industry and I always ask those questions. Now that you've got, in some cases, 50, 60 years of experience, what are those mistakes you make? And typically they will say two things. They didn't trust, they didn't listen to their instinct. Now there was something in the back of their mind saying there's something just not quite right here, but they were so in love with the entrepreneur or so in love with the technology, they rationalized it away. Rationalization is a dangerous thing. And then also that typically they stayed with a CEO too long because they built up great relationships and they probably didn't make a change soon enough because of that personal relationship. One quick story from, I probably shouldn't, I won't tell you who he is just in case he wouldn't want this out there. I think he, I don't think he'd care, but he's literally one of the few surviving founders of Silicon Valley and he tells a story about an entrepreneur he really liked and the guy without question was given it his all, but it just wasn't quite enough. And he let it kind of drag on too long until he went over to the entrepreneur's house on a Saturday morning and said, hey, we need to talk. He said, I really think, I'm sorry to tell you this but we really need to make a change. He said the entrepreneur actually just dropped his head and said, oh, thank God, I've been waiting for you to fire me for almost a year but I didn't want you to think I was gonna quit on you. So I didn't resign. And because most people know when they're not getting the job done, right? And so that, I've never forgotten that story. And they remained friends, right? They worked through it. So yeah, it's one I carry around with me all the time because we think it was- If you are investors, I'm not ready. Yeah. So all right, well, with that, it looks like we're almost out of time. But before we conclude, I'd like to ask each of the panelists what you would say of what we've talked about here today. What would be the one single most important takeaway if they ignore everything else we said, what should they take away from this conversation? Smart money. Smart money, okay? Leverage your networking, always build it. And I would say trust your instincts in whatever you do. So, well, thank you both for joining us. Elizabeth Rosemary, it's been a real pleasure. And I've been doing this for over 30 years now in terms of being both being an entrepreneur and a venture capitalist. And it's always great when you actually bump into people who know what they're talking about. So I really appreciate the experience and the value you brought to the discussion. Thank you very much. And a special thank you to everyone who's viewing today. And especially to the hosts of the viewing groups around the globe that have helped bring the entrepreneurs together today to be a part of this conversation. We've had audiences all around the globe, including the American Space and Cultural Center in San Pedro, Honduras, the Walt Whitman American Center with locations in Guatemala City and Quetzaltenango, Guatemala, the El National Center in Chion Chile, the U.S. Consulate General in Gawaiakil, Ecuador, the American Space in San Salvador, El Salvador, Lead Africa, the Development Institute in Jamina Chad, the American Cultural Center in Windhoek, Amibia, the Youth Network for Reform in Liberia, ASU Innovation Hub in Cairo, Egypt, and El Space Social Innovation Hub in Tunis, Tunisia. I would also like to recognize viewing groups around the world who will be watching this program at a later time at American Spaces in Sri Lanka with locations in Colombo, Kandy, and Jafina, the U.S. Embassy in Islamabad, Pakistan, and the U.S. Embassy in Kigal, Rwanda, and the U.S. Embassy in Tbilisi, Georgia. Please continue the conversation on Twitter at hashtag JustTechConnect and check back here on JustNetwork.org for information about other upcoming Just events, including programs like this. I hope you enjoyed our discussion today. I know the panelists and I had a good time and thank you again for joining us. Goodbye.