Practice might make perfect when it comes to pitching your budding mobile startup to potential investors, but everyone knows there’s nothing quite like the real thing.
Unless, of course, you're like a handful of companies from Canada's The Next 36 entrepreneurial program whose practice involves travelling to New York City to meet with four of the east coast's top early-stage venture capital firms.
By sending five of its most-promising teams on a two-day trip to Broadway this past June, The Next 36 is applying its proven "learn about entrepreneurship by being an entrepreneur" formula to business development and funding, helping these young companies get both the capital and mentorship they need to grow even after the eight-and-a-half-month-long initiative ends on Aug. 13.
Christian Lassonde, chief venture advisor at The Next 36, coordinated this year's trip. He set up group meetings with RRE Ventures, Raptor Ventures, Union Square Ventures and Lerer Ventures—tech-focused firms that have backed the likes of Bitly, The OpenSky Project, Etsy, Twitter, BuzzFeed, and Refinery29—in the hopes that two days in the concrete jungle would inspire the entrepreneurs to imagine what their own ventures could become if they broadened their target market beyond Canada's borders.
"Canadians are like Americans. The two markets act and react almost identically. Why would you not sell to them?" asked Lassonde, who spent nine years in San Francisco as a programmer and serial entrepreneur before joining The Next 36 last year. "[The students] are hearing me bang that drum continuously."
The trio behind Needle, one of the 12 startups in this year's cohort and one of the five invited to join Lassonde in NYC, is indeed hearing the music and listening to their advisor.
Since launching less than two months ago, the online portfolio and search engine for creative professionals has begun indexing 60,000 profiles of designers, animators, photographers, copywriters and art directors per day, according to internal statistics. It has amassed a user base of more than 2,000 employers and design agencies from more than 110 countries and profiles from more than 200.
The company, which claims to be the largest searchable database of creative talent in the world, has already garnered interest in their seed-funding round from multiple angel investors at a $2-million valuation. While in New York City, one partner even told Needle’s co-founder Michael Cheng that the creative hiring industry is “wide open” right now.
"It validated what we’re working on and the direction we’re taking," said Cheng, who added that Needle is now building an integrated messaging system, project and time management tools, and a payment function into the platform. "The VCs are thinking [about] what our company can be worth in the next five years and what we have to do to get there. They were envisioning the potential, and that’s very inspiring."
Phashtag, short for “photo hashtag,” was also represented in the Big Apple. The company is developing image recognition technology that lets brands analyze how people interact with their products through photos uploaded to social media websites.
“We were quite surprised with how familiar a number of the VCs [venture capitalists] are with image recognition technology, as it isn’t something the average person knows a lot about,” said Steven Wellman, one of Phashtag’s three cofounders. “This trip really stressed how important it is to align your business and what you’re trying to do with venture capital firms whose investment thesis fits that.”
Joshua Liu of Seamless Mobile Health, an app that helps patients stay healthy at home, echoed Wellman’s statements about fit and how customizing their investment deck to align with the potential investor’s preferences is crucial.
“We researched all the firms we met with and looked at their portfolio to see if they had invested in a company like Seamless before,” added Liu, whose start-up won top prize at the national eHealth 2013 Apps Competition in May.
The four VCs may not have been equally interested in each of the five companies—which also included an app that helps construction contractors track on-site deficiencies (Bridgit) and a concert listing app that aggregates videos and photos taken at shows (Encore)—but a lack of interest doesn’t necessarily mean the business isn’t interesting, Lassonde contends.
“I think the right companies will get funded by the right people,” he added. “That’s the scenario we always look for.”
He expects half of this year’s ventures to raise additional capital on or before the final day of the program, known as “Venture Day.”
“I can’t give you a resounding yes, “Lassonde said, “but I certainly think we’re pretty damn close to that."