Raising Early-Stage Capital and Securing Meaningful Investments

Dejana Dua
June 27, 2024
ventureLAB News

Money is money, except when it’s not. This is something most founders come to learn as they go through the process of raising early stage capital. Finding the right kind of investor who’s aligned with the founder’s vision and strategic needs takes time and patience, but the rewards can be manifold. 

The startup ecosystem in Canada thrives on innovation, collaboration, diversity, government support, access to capital, and a vibrant community of entrepreneurs and investors. This has been both exciting and challenging for founders as they embark on the journey to raise capital across all phases of their venture lifecycle, particularly those looking to secure funds in the early, pre-seed to Series A stage. There are many reasons why it has become increasingly more difficult for startups to raise capital, from the ever-changing trends, to investors having higher expectations when it comes to demonstrated track record, to name just a few. One of the biggest challenges for both investors and founders, however, is market saturation and increased competition - it’s just harder for new startups to stand out and attract investor attention. This means that startups need to have stronger value propositions and more compelling business models to secure funding. Another reason for investor hesitance is the looming economic uncertainty, not just in Canada, but in the US and abroad. Over the past several years we’ve all experienced uncertainty about global economic trends, trade policies, or geopolitical events. This can make investors to be more conservative with their investments and take fewer risks, particularly in early-stage startups. So, what’s an early stage founder to do? 

My name is Dejana Dua and I lead the Capital Investment Program at ventureLAB. Our team of advisors works closely with founders who are ready to raise capital, offering guidance and support as they begin to navigate this process, often daunting for many. Backed by decades of collective experience and industry insights, we often caution our founders that they only get one chance at making a good first impression when pitching to an investor. Working hand-in-hand, we help them master the art of story-telling and focus on presenting a compelling case for their startup’s potential, while demonstrating adaptability, resilience, and a willingness to learn and iterate based on feedback. It is important for founders to know their investors in order to tailor the pitch to resonate with the investors’ specific criteria and objectives. They should also ask themselves what benefits besides financial investment could an investor bring to the table. Do they have subject matter expertise in an area related to the venture? Can they provide introductions to other investors? Would they advocate for the startup’s needs and offer strategic guidance? Investors, on the other hand, look for founders who can demonstrate resilience and adaptability when faced with challenges, setbacks, and uncertainties. It is easy to lose track of what matters most - founders who listen to customer needs, adapt based on feedback, and deliver exceptional experiences stand out in the market.

Finding the right founder-investor fit can be difficult, but not impossible. Some investors are passive, while others offer a more hands-on support, such as introductions to other investors, providing industry expertise, mentorship, and other value-added services. Again, finding the right kind of investor whose values align with those of the founder’s is an important factor to keep in mind when raising capital at any stage. Staying optimistic during the funding round can also be challenging. It’s a stressful and often nerve-racking process that tests not only patience, but relationships, sanity, and purpose. Many founders start the process on a high, exhilarated from the prospect of securing capital that will elevate their venture to new heights. But they quickly learn that it’s a very slow, sometimes tedious, time- and energy-consuming process that makes it hard to focus on actually running the business.  As an angel investor and advisor, I always remind founders to try to stay grounded in reality and understand that rejections and setbacks are common and they don’t define the overall potential for success. It’s important to celebrate milestones and achievements that are often taken for granted, such as gaining customer traction, reaching product development milestones, or securing partnerships. It’s also more than okay to ask for help and lean on one’s support system during challenging times. It sounds cliche, but it is so crucial to have a supportive network of friends, family, advisors, and mentors to rely on. 

One of the easiest ways for founders to start building a list of meaningful investors is to join a structured support program, such as one of the many we offer here at ventureLAB. Our advisors can provide not only strategic guidance and mentorship, but also access to industry connections and other resources that can be invaluable for early-stage startups. As they start to build and grow their network, founders should identify investors who can provide value beyond money - strategic advice, industry connections, mentorship, or operational support. Investors whose portfolio companies are aligned with their business, offering potential partnerships or customer opportunities. A meaningful investor is one that can and will use their network to get warm introductions to other potential investors, adding credibility to the pitch. 

When dealing with rejection from investors, founders need to keep in mind that every “no” is one step closer to a “yes” from the right investor. 

About Dejana Dua

Dejana is an early-stage investor and advisor to technology startups in cybersecurity, biotech, clean tech, med tech, fintech, immersive learning, fashion, and other sectors. She partners with exceptional, passionate founders with extraordinary vision, set out to define and tackle the biggest challenges across industries. As a mentor with a dynamic communication style, Dejana continually develops practices and processes to inspire, innovate, and harness new ways of thinking. With over twenty years of experience in technology and innovation, Dejana is a partner at Anexa Capital and the Capital Investment Program Lead at ventureLAB. She is also an angel investor and advisor at the Firehood and IgniteGTM, member of the Board of Advisors at the George Washington University School of Business, mentor, speaker, guest lecturer, panelist, and champion for girls and women in STEM. 

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