Raising venture capital for a startup is not an easy task, however, Jay Jung shares a case study that details the problems involved and the steps taken to ensure successful funding on a non-tech, mid west company seeking investment funding.
Embarc Advisors successfully advised a Client Company, located in the Midwest, with their first external fundraise of $10 million.
The Client Company faced numerous challenges in positioning their story and attracting attention from top investors.
As an industrial company, the client faced difficulty in positioning its story
As a Midwest based company, it was difficult to access top VCs, who are primarily located in the Bar Area or New York
The founders were strong in product development and sales but had limited experience in finance or capital raising
Embarc guided the founders through the entire process from preparation to a successful finish with immense attention to every detail.
The details included:
- Creating a financial model
- Scripting initial outreach
- Preparing a professional data room
- Negotiating term sheets
Access the case study, Raising VC Capital For A Non-Tech, Mid-West Company, on embarcadvisors.com
Umbrex is pleased to welcome Alex Jacobs-Hajian. Alex is a C-Level Strategy and Operations Management Consultant focused on Mergers and Acquisitions, Deep Technical Know-How, and Business & Legal Acumen
• Program and Project Management
• Client Relationship Management and Value Realization
• Digital and Technology Strategy
• Lean Six Sigma Certified
• Resources and Utilities
• Communications, Media, and Technology
• Healthcare and Life Sciences
• Government and Public Service
Tommy Kim provides an article that explains the differences between Private Equity (PE) and Venture Capital (VC).
Private Equity (PE) vs. Venture Capital (VC). You suddenly realize that you are being presented with two similar, yet different types of capital sources. PE and VC investment management businesses offer investors different types of return on capital using unique risk profiles in long-term illiquid assets.
Whether you are interested in this side of the business as entrepreneurs and CEOs seeking capital or as investment managers seeking to expand your investment management franchise, they are two different types of businesses. As you are shopping for capital, here are the similarities and differences between PE and VC investment management and how they add value to our private capital market landscape and the global economy.
You had been confused at one point, not realizing that PE is actually different from VC. As you have met with both PE and VC managers, you now see that the difference is becoming more clear. Both VC and PE firms work with private capital investing in companies, add value over time, and exit investments through private sale or IPOs, public offerings. The biggest differences between PE vs. VC is in investment size and level of risk taken on each investment. In addition, PE and VC are fundamentally different in the number of deals they do and the size of capital they commit to each investment. Furthermore, PE firms seek no bad deals, while VC firms expect some or many to fail and hope that few would become a unicorn, deals that would be valued over a $1 billion.
Key areas include:
- Types of private equity funds
- Private equity target and blind funds
- Return multiples sought in PE
- Working in PE or VC
Read the full article, Private Equity vs. Venture Capital: What is a Better Fit For You?, on Linkedin.
Jay Jung shares a case study that explains how his company helped a client with their fundraising process, and increased their valuation by 80% and doubled the capital raise.
One of our clients received a term sheet from a well-known VC in the industry. Our client was very excited as getting an investment from this firm was a strong sense of validation in the industry. However, the valuation was significantly lower than what they were hoping for.
The client only had one term sheet from this specific investor and was in dire need of a cash infusion to maintain its fast growth trajectory. Discussions with other investors were lagging and unclear if they were seriously interested.
This is a weak hand. In traditional negotiation terminology – what is your BATNA (Best Alternative To a Negotiated Agreement)? Ours was perhaps none existent, at best weak. But as Adam Grant advocates, “The science of the deal reveals that great negotiators refuse to believe in a win-lose world. They care about both results and relationships. They don’t declare victory until all parties win”
If you focus just on valuation, you are not going to gain much in this situation. We refuted their approach to valuation and explained why it was too low (unreasonable). The VC did not push back on our logic, but that doesn’t mean they accepted our higher valuation.
The key to gaining something in this type of discussion is identifying other issues that the investor is solving for. For investors, it is very rarely just about valuation.
Read the full case study, Successfully Negotiating VC Termsheets, on the Embarc Advisors’ website.
Umbrex is pleased to welcome Seline Karakaya with Excelerate Global. Seline Karakaya is Founder and Managing Director of Excelerate Global, a venture capital and private equity advisory group. In this capacity, Seline has worked with closely with companies ranging from start-ups to multi-nationals to support their growth priorities. She works closely with founders, CEOs, and Boards of Directors—often as an interim CXO—on the most pressing issues, from hiring to pricing, strategy to fundraising, organization to business
Prior to founding Excelerate Global, Seline was a Director at American Securities, a New York-based private equity firm with one of the most successful track records in the industry. During her tenure, Seline co-led the development of the Firm’s “Shared Vision” process for value creation and alignment, advised portfolio company CEOs across a variety of industries and business topics, ranging from strategy and growth to talent and change management, and led the execution of a number of high priority initiatives. She also developed and oversaw the Firm’s commercial due diligence efforts.
Prior to American Securities, Seline was a management consultant at Bain & Company, where she spent over 6 years advising Private Equity, Retail, Consumer Products, Tech/Media executives on M&A, corporate strategy, change management, and growth initiatives ranging from product development to new market entry. Seline was among the original members of Bain Los Angeles’s Private Equity Group.
Seline was Chief of Staff at FEI Women’s Health, overseeing all strategic initiatives across the commercial aspects of the business leading up to its strategic sale to Barr Pharmaceuticals. She has also held positions at Amgen, Cerberus Capital Management, and American Express in a variety of capacities.
Seline graduated with the highest honors from the University of Southern California Marshall School of Business Honors Program with a B.S. in Business Administration, Strategy & Finance. She is also an active advocate of children’s causes in developing countries and animal welfare around the globe.
Seline is happy to collaborate on growth strategy and commercial value creation projects in the Western U.S.
Umbrex is pleased to welcome Luke Xie with Lux Advisors. Luke is a former McKinsey Business Analyst with the strategy practice and has been independent consulting since 2013. He has operating experience across early & late stage start-ups including Airbnb, Sentio (consumer hardware), and Coda Automotive (electric vehicles). Luke also has venture capital experience from working at Romulus Capital (early stage) and RocketFuel (blockchain). He has functional expertise in digital strategy, due diligence, entrepreneurship, growth, innovation, and support.
Luke lives in Los Angeles and is an avid racing driver and instructor. He is happy to collaborate on projects worldwide and is conversationally fluent in Mandarin.