On The Fundraising Trail: Pitch to Investors

Friday of last week I set out early to Ontario airport for my flight into Oakland International Airport. For those of you who aren’t familiar with San Fran, there are two airports that service the city, one being San Francisco International airport, the other being Oakland International Airport.

Arriving into Oakland through a dense fog, I checked in with the hire car company, boarded my economy compact car and I was on the move.

My first meeting was with my friend Chris, whom I mentioned in an earlier post. The purpose of meeting Chris was to discuss venture capital and finance in general. We met in Palo Alto, which by the way has some extraordinary homes (see photos below).

I sat down with Chris in a great little American diner and he started reading through the business plan. Now, I’ve mentioned before that Chris reads a lot. Well, he began skim reading my 22 page business plan and got through it in less than 10 minutes. He really had no more questions about how MySchoolAct worked, the various revenue sources or how much money I’m looking to raise. Chris’ brain is like a sponge – it really was a sight to be seen.

Chris loved the business and was very excited that we had a proven track record and revenue was already flowing in the door.

Chris cautioned me about the amount of money I was asking. He believed that it may be too much in this economy, especially with me offering stock in only the North American branch of MySchoolAct and not the Global company.

After lunch, and a very successful conversation with Chris, I pushed on to my next meeting with Craig. Craig is a lawyer in Palo Alto and has some great connections with VC and is personally active in two Angel Investor groups. Craig and I talked for close to two hours about MySchoolAct, and he loved just about every bit of the business. He was very positive about the business model, and like Chris, he praised that we have a proven track record in Australia and revenue coming in the door.

The close of my conversation with Craig stalled when it came to money, and in particular the amount of money I was asking for. Chris’ warning had come to fruition. Craig was a little concerned that he may not be able to find someone willing to invest that amount of money for only ownership in the North American branch of MySchoolAct. Investors would want either a small chuck of the global company, or a huge chunk of the North American brand. That posed a problem for investors; if they took too large a chunk of the North American branch what would motivate MySchoolAct staff to run a successful company?

Craig and I talked at length about our financial needs; ultimate goal versus bootstrapping a little further and then somewhere in between. Either way, Craig left the meeting with some good ideas about our funding needs and had the tools to sell our product to investors.

I walked away from my day with mixed feelings. On one hand I was pleased that both Chris and Craig were very excited about the product. On the other hand there I didn’t walk away with funding. I guess a small part of me was hoping that Craig would stop me half way through our meeting, and say “this is great, we won’t have any issue finding money. Investors will be dying to get in”. We all live in a fantasy world from time to time, and the regular knock backs are what pull us back into reality and motivate us more to make that fantasy world become reality.

From here, I will stay in close contact with Craig, and it’s likely that Craig will invite me once again to his office to present to any investors that are interested in forming a partnership with MySchoolAct.

Tonight I fly out to Sydney for the MySchoolAct workshop and Grand Final week and then a little rest and relaxation. With everyone going on holidays shortly, it’s likely that this will be my last On The Fundraising Trail post for the year. There will however be more posts on VC or Bust.