Venture capital is available, if you know who and how to ask

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By Steve Dinnen

Drake Bauer is a confessed gearhead. He’s loved cars his entire life.

“I think I left the womb with a Hot Wheel in my hand,” said the Colorado native, who grew up in Decorah and now lives in Des Moines.

Bauer thinks he can make money, maybe a lot of it, with a process he is developing to help automobile owners such as rental firms better manage their fleets. “There are a lot of inefficiencies,” he said of oil changes, tire rotations and repairs that disrupt the flow of vehicles through a fleet.

He thinks he can fix that. But first he needs to get some money — again, maybe a lot of it — and is turning to venture capital as he builds a plan. Last month, at a Greater Des Moines Partnership seminar designed to help startups raise capital, he learned some of the ins and outs of venture capital in particular — what it is, how it works, how to ask for it and whom to ask.
Tread lightly here, Bauer cautioned. Ask for too much money “and you might turn people off.”

Or you might not even know how much you’ll need. Google co-founders Sergey Brin and Larry Page were in a breakfast meeting with Silicon Valley powerhouse Andy Bechtolsheim when he cut the meeting short but wrote them a check for $100,000, which they couldn’t even cash because they didn’t yet have a bank account. But that initial investment greased the skids, and when Google went public six years later, Bechtolsheim’s seed capital was worth $1 billion.

We should all be so lucky. Kaylee Williams directs investment at InnoVenture Iowa, a $30 million public co-investment fund, which was funded by the federal American Rescue Plan. She described a balancing act between asking for enough money to help your business succeed and asking for too much, which could dilute your ownership. “The more you fundraise, the more of your company you’re giving up,” she said. “You only raise as much as you need.”

That’s lesson No. 1. But to get that far, you have to have a product, a business plan and a polished pitch you can make to potential investors to convince them that yours is a good idea. This entails wiping out doubts that investors may have by telling them what you know, not what you think, Bauer said.

Williams said that venture capital is available at local, state and national levels, especially for startups that can demonstrate intellectual proprietorship (IP). There are various forms of intellectual property, including patents, trademarks, copyrights and trade secrets. The person who comes up with a concept or idea has the IP — and attracts the venture capital.

Iowa seminar series helps startups seek venture capital

Venture capital is available, but you have to know where to find it and how to ask for it. InnoVenture Iowa, a public venture capital fund, can help you make those connections.

They call it the “Heartland Hustle: How to Raise Venture Capital For Your Startup.” It’s a series of seminars meant to provide budding entrepreneurs and innovators with information they need to successfully attract venture capital. It could be seed money. It could be Series A funding. Whatever it’s called, it boils down to developing a business plan that will attract outside capital to enable your enterprise to thrive.

“We introduce the concept to (company) founders,” said Kaylee Williams, workshop presenter and investment director at the Iowa Venture Capital Co-Investment Fund. “When do you raise it? How do you raise it?”

The series began in April and runs through the end of May, or perhaps longer as more cities sign on as site sponsors. Upcoming events are slated for May 9 in Indianola, May 17 in Oskaloosa and May 30 in Fort Dodge.

The workshops are free, but online registration is required.

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