Indochino

The hunt for the first suit may be a rite of passage for men, but for Kyle Vucko it was more of a tribulation. While a University of Victoria student years ago, he wanted to look sharp at a conference. He was quickly disenchanted with out-of-reach prices and uninspiring cuts. He and his classmate and current business partner, Heikal Gani, decided to do something about it. “We assumed there were other guys out there like us.”

They were right. Since writing their business plan in 2006, they’ve recruited more than 100 employees and raised $18-million to make their vision come true: to make custom suits accessible for young men like them, while avoiding the trap of snotty sales staff and price tag paralysis.

In the same way Mr. Vucko needed money to transform his wardrobe from cheap to chic, his business needed to go from bootstrapped to investor-backed to prosper. “Venture funding enables you to grow your biz ahead of the curve.”

But beware, wary entrepreneurs: a trip to the market isn’t for the faint of heart. Indochino didn’t jump into last year’s Series B without a lot of deliberation.

“Fundraising is a full-time job,” Mr. Vucko says. “You’re already, typically as a CEO or founder, living a full time-plus life running the company.”

Here are some tips from Mr. Vucko and other founders whose startups were among those that attracted the highest amount of investment dollars in Canada last year.

Kyle Vucko

Chief Executive, Indochino

Know how to manage yourself and your team The fundraising drive can last up to six months so it’s important to have the energy to make it until the end, Mr. Vucko says. His team also needs to be aware he won’t be as readily available to manage day-to-day operations.

The deal may be over, but he’s still spending about a quarter of his time tending to the books. “I think a lot of people get excited about building a venture-backed and money-raising company, but the reality is it’s a lot of work.”

John Schwarz

Chief Executive and founder of Visier

Raise what you need Venture funding may seem like a buffet where startups have free reign to pile up their plates. But it’s important to know how much money it’s going to take to run the business and not raise beyond that, says John Schwarz, chief executive and founder of Visier, which breaks down data to help manage staff.

Mr. Schwarz’s goal last year when he settled on $15-million in a round led by Boston-based Summit Partners, the lower end of his target range, was to be able to run his company for the next 2½ years. “There’s a fine balance that you need to strike between raising just enough to run the business and not so much that you dilute yourself too much.”

Mr. Schwarz chose Summit because he knew the management team, mitigating “the risk of bringing someone on board who is going to be a pain in the neck,” and also because the firm specializes in analytics.

A longer courtship to negotiate the right amount of cash can help avoid a hasty return to the markets, he says, although he’s learned that fundraising milestones aren’t static. He’ll likely raise another round this year to keep pace with Visier’s growth.

Lakshmi Raj

Co-CEO and founder of Replicon

Don’t get vain over valuation All startups fret over valuation, but it’s important to realize other criteria rank ahead of your firm’s worth, says Lakshmi Raj, co-chief executive of Calgary-based Replicon.

Ms. Raj’s time-tracking software company scoured both sides of the continent for the right venture capitalists and eventually settled on a $20-million agreement with two investors that were close to the Bay Area, where they’ve maintained a presence since 2010.

“We ended up picking the right firms even though the valuation was much higher from the East Coast VCs,” Ms. Raj says.

Aside from proximity, another reason she selected Social+Capital Partnership and Emergence Capital Partners was because they shared her vision of aggressive growth. “They were interested in swinging for the fences.” It’s important to plug into a network that best aligns with your firm’s industry and culture, she says.

Cam Carver

Chief Executive of Mississauga, Ont.-based Temporal Power

Know your network Beyond providing a mine of knowledge, your contacts can bolster your profile, and that becomes valuable when approaching future investors, says Cam Carver, chief executive of Mississauga, Ont.-based Temporal Power. “The more references and contacts you can provide them offers you credibility that you otherwise don’t have.”

Mr. Carver, who founded Temporal in 2010, had few options to fuel his capital-intensive energy storage business. Even so, he doesn’t see last year’s $10-million Series B round, financed by Northwater Capital Management and Enbridge’s emerging technology investment vehicle, as a necessary evil.

“We had to make a decision pretty early on: Are we going to maintain complete ownership of this thing and turn it into a legacy family business or are we going to access capital and grow this business as quickly as possible?”

Kyle Vucko

Chief Executive, Indochino

Nail down your pitch Indochino’s Mr. Vucko, much like Mr. Carver, took the route of raising capital. In the process, he was able to fine-tune his pitch to investors. “You really have to identify the top three things that are going to drive the success of your business and explain them in really basic terms: not using jargon, not using industry speak, in ways that an average person off the street can understand.”

Original Source: Financial Post

Get started today.
Set up a free trial based on your business needs. Start Free Trial

Global Compliance Desk – Ireland

New Unpaid Parental Leave Entitlement The Parental Leave Acts allow parents to take parental leave from employment in respect of certain children. Under the Parental Leave Act 1998, parents of…Read More

Global Compliance Desk – Germany

Annual Leave Entitlement During Unpaid Special Leave  An employee who is continuously on unpaid special leave for a calendar year is not entitled to holiday leave in the absence of…Read More

25 Employee Payroll Tips for Small Business Owners

Recruiter | July 05, 2019 By Lakshmi Raj, Co-Founder and Co-CEO, Replicon Payroll can be a challenging task for any small business but with the right tools, it can become…Read More

The five reasons employees work overtime

Very few people enjoy working overtime, and even fewer companies want their employees stretching their hours. Besides the costs of paying overtime (and a few extra costs), research has shown…Read More

The 7 must-haves for choosing the right professional services management solution

Not too long ago, if you asked any professional services organization to tell you how they managed client projects, resources and utilization rates, the answer was always the same: spreadsheets.…Read More

Seven critical ways to achieve global project success

There was once a time when managing a project at work was fairly straightforward. Everyone was in the same location, or at most a mere phone call away. You’d set…Read More
  • Cloud
  • In The News
  • Corporate
  • Professional Services Management
  • Project and Program Management
  • Shared Services Management
  • Time and Attendance Management
  • Workforce Management
  • Customer Feature
  • Feature Update
  • Time Intelligence
  • Industry News
  • Webinar Recap
  • Global Compliance Updates
  • Chat with us
    How can we help you?