What Investors Look For In Startups

Posted On: 2006-09-26
Length: 53:28

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So you have a technology start-up in today's hottest area. You look for investment to accelerate growth of the business, because we all know speed to market is important. But you don't know where to start when talking with investors. What do you say? How do you say it? And what in the world do these investors want from us? Well today's guest has some answers. My guest today is Kathy Panzica of Panzica Investments. She is also a corporate lawyer and an ordained priest. In the last year, Kathy and her investment team have closed eight investments and started two companies. Well welcome to the show Kathy.

Thank you for having me.

Well it's great to have you hear. Now we know entrepreneurs can be highly accomplished, highly successful and driven people. But talking with investors I have to admit can leave us uncomfortable, even floundering. What is the single worst thing you could say to an investor if you're an entrepreneur looking for funding?

I think the worst thing that you can say is that you're going to promise them an early return on investment or look for an IPO. I think people come into an investor and assume that the first thing on their mind, at least it certainly isn't on mine, is how am I going to make the quickest exit possible, and do I even want an IPO. Typically I don't want an IPO. So, leading with the wrong result, or perceived exit from an investment can really show a sense of immaturity about the investor. And it just sets the stage the wrong way.

Mmm. Well I want to talk about that a little bit more later. But first, Kathy, you have a very intriguing background. You do not fit the typical venture capitalist mode or mold, if you will. Would you tell us a little bit about your background, I think it's so interesting.

Oh, you're very kind. Thank you. I actually developed a huge passion for technology in London in the 80s and early 90s when it really wasn't very cool to be passionate about technology. And I built a corporate transactional practice on technology and then decided, you know, what I really want to do is consult with businesses and entrepreneurs who are starting businesses to show them how technology can drive new outcomes, new companies and really transform then what was Great Britain with technology clusters. And so that's what I did. And I built some models for transforming government and transforming business, transforming schools, for starting businesses, and really what was so interesting about the context of this radio interview and our discussion, is that it just pained me how the young entrepreneur with this fabulous idea or technology just couldn't get traction, and it frustrated me enough that...