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On tonight's episode, my co-founder (and brother) Ben and I pitch to Palo Alt- based venture capitalist Jeff Clavier of SoftTech for an investment of $500,000 for our health-care startup, Ignite. We talk him through our pitch deck just as thousands of entrepreneurs do in Silicon Valley every year hoping that he'll believe in our idea and give us the cash we need to grow our start-up.
But after exerting all our energy into a one-hour meeting, Clavier tells us the investment is not right for him, given his investment in our potential competitor Fitbit, and gives us a big, fat "NO" on investing capital in our start-up.
This is hugely disappointing and also the second "no" we've had after pitching to well-known VC Dave McClure of 500 Startups on last week's episode.
But we are not alone, thousands of start-up entrepreneurs pitch to investors every year and 99% will fail, even at this stage, unable to raise capital for their start-up. Finding the right investor is almost like finding the right person to marry. You have to date a few to get the right match and understand that your relationship with VCs will be a 5-10 year commitment, and so you need to make sure you pick the right match.
I know start-ups that have been in the Valley for two years and still don't have funding. A friend of mine took six months and talking to 54 angels and VCs before he raised half a million for his start-up. Some entrepreneurs even live in their cars to get exposeure to Silicon Valley investors.
Sure there's other ways to fund a start-up: crowd-funding, bootstrapping, and having paying customers are all great alternatives to getting capital, but we are building hardware and need a large amount of upfront capital to get our hardware to the production stage.
We need capital so whether it takes us 10 or 10,000 pitches to raise investment we will keep going until we get a "yes." At this stage of the game, perseverance is key, and we are going to keep on going.
So what are we doing wrong? Tune in to find out!