Financing the New Venture
Teaching a summer graduate class on the art of getting your start-up off the ground
Earlier this year I was asked to conduct a graduate course as a visiting lecturer at Simon Fraser University’s Beedie School of Business to talk about ‘financing the venture’. I never really think long about these requests and just say ‘yes’ only to realize that it is actually quite a bit of work to put an in depth curriculum together. In this case it covers everything from getting a technology out of the lab to putting a term sheet together to pitching to investors, closing a deal and building a company that can exit at some point and everything in between. The added complexity was that the sessions took place over Zoom and this involved prepping a narrated session of the material ahead of the live session where I then would discuss it in more detail and take questions and answers. Then I had to grade the assignments that I had suggested the students do, something that was made quite easy using the Canvas platform.
It turned out to be fun as the twenty-five graduates attended each session from beginning to end and peppered me with lots of questions, online and offline. I also brought in two highly successful entrepreneurs to talk about their journeys and gave the students a flavour of some seed stage deals as they were being done in Vancouver at the moment. What was even more interesting was that each of the students was to prepare a pitch to raise financing for their venture and present this to SFU faculty where a few were selected for a subsequent event and with me grading each pitch. The results were phenomenal, some twenty rock solid pitches that not only represented great technologies and ideas, all of them could easily compete with ‘real pitches’ that I see on a regular basis in more professional settings where deals get financed.
To me this is evidence not only of how far entrepreneurial thinking and development has come, but also how quickly emerging founders are able to adapt ideas and advice and incorporate this in their plans. Most ventures in the course were still in ‘lab mode’ and it meant getting them out of their comfort zones to address the realities of markets and finance. All of them did well, underlining their ambition and keenness to learn. Of course there are areas where all start-ups struggle and the graduates ran into the same hurdles as most other founders do. Finding the right product-market fit and defining who the actual buyer of your product is one of the hardest things to articulate early on. Once you have that it is equally hard to quantify the financing need - especially for deep tech companies where the seed stage tends to run longer - and then explain your plan with as little text as possible. Probing into these areas early on helped all in articulating their plans and some even had real fun constructing preliminary terms sheets that underpinned the financial ask.
But I learned too. More about new technologies and how emerging entrepreneurs think creatively about their venture and how incredibly resourceful they are in finding answers to their problems and questions. Again, I think quite a few of the graduates will find a way to finance their business and become successful. And finally, most important of all, we made connections and built relationships that will help all of the participants on their journeys to build great ventures.
From SFU I really want to thank Elicia Maine, Bailey Miazga and Casey Yorko for keeping me on task and schedule, and of course Stephen Robinson and Michael Riedijk who were able to join two sessions to share their stories of creating, building, financing and exiting.