To continue with Agile Leverage’s podcast and video series with digital thought leaders, Corey spoke with Dave Neal, managing director and co-founder of the StartUp Factory, one of the leading accelerators in the Southeast.
Dave has extensive experience in law, transactional finance, and working with technology companies. He has also held leadership positions at Bloodhound Software, Inc., Infina Connect, and GMA Healthcare.
If you are an entrepreneur or someone with a business idea who wants to start a successful company and potentially raise capital, then watch this interview.
[su_highlight]Click the Play Button Below to Listen to Dave Neal[/su_highlight]
<div class=”content-box-yellow”> Interview Notes
- How has starting a company changed over the years?
- The amount of money required to make companies work is 1/10 of what it used to be 20 yrs ago.
- Today you don’t need the tech centers – you [can start with] $25 a month in Amazon web services. Also, the iterative methods as opposed to the long development periods, and the hope you have the right product, have changed the game & made it less expensive.
- Who should go about looking to raise capital?
- If you need capital, you should go out and raise capital.
- The people in the best position to raise capital, and those that should try to do so, are those who are utilizing the iterative methods and are now in a position to talk with investors about what they know and how they know it.
- How does an entrepreneur decide what kind of capital to raise?
- First, it depends on who they are as entrepreneurs and how much money is needed. It is situational.
- Some companies have proven a lot and need to raise a large round quickly.
- What kind of dilutions should be expected for a company?
- In a general sense – not an accelerator sense – 25%-30% of your company in a round.
- Venture capitalist do not want to take a huge amount of the company each round because [the founder(s) and team] will wind up with very little and “not in the incentive game.”
- What kinds of control do you give up?
- Once you take any material money from an outsider then the absolute control has diminished because it is unreasonable/unethical to ignore someone who has significantly invested in your company.
- It becomes more of a consensus building issue and when there is a disagreement you have to work through it.
- You cannot think you have all the control because that does not make for a workable situation.
- How does someone find a VC, present, and get your attention?
- At The StartUp Factory, they make an effort to figure out who would be the VCs that are of interest to the people in their program and establish relationships with accelerators and VC firms based on what they like and what they do. They help bridge the gap with connections and provide a fruitful place for their people to find capital.
- Is their a combination of skills that are most successful for startups – early stage companies?
- You need someone who is not you – you need the “anti-you.” You have your own skills. You need someone with the skills you don’t have.
- The StartUp Factory likes to see people with tech knowledge/code and a manager who can represent the company in a number of roles and sell what they have.
- How does the region and city you are in effect the idea flow?
- There is no place like Silicon Valley as far as financial and intellectual capital in one place. However, there are a lot of great areas in the US and North America that can be cheaper and easier to operate in. Places such as RTP, Austin, and Seattle.
- As a person with an idea for a company, how do you find someone like Dave without knowing someone like Dave to give you an introduction?
- Go out and socialize your idea.
- Websites such as cofounderslab.com are a good place to connect with people.
- You need to have a substantial amount of interaction with someone to get a sense if you should and could work with them.
* * Notes Provided by Agile Leverage’s Morgan Crowe
Dave Neal is the co-founder and managing director of The StartUp Factory, based in Durham, North Carolina. He has deep experience in law, transactional finance, and building technology companies. He has also worked in high level positions at a number of successful organizations, including Bloodhound Software, Inc., Infina Connect, and GMA Healthcare. In addition, Dave served as an adjunct professor of entrepreneurship at UNC's Kenan-Flagler Business School.