Raising Capital in the Summer – It’s Easier than You Think
It’s hot, humid and you’ve got DJ Jazzy Jeff and the Fresh Prince blasting in your Feng Shui optimized office space. But where is everyone? Most likely they’re on the sandy beaches of Cape Cod, the Hamptons, or Nantucket.
Raising capital between July 4th and Labor day can seem like an arduous task, and more often than not, it is. That being said, it may also be the best time to raise (if everyone says it’s a bad time, take the contrarian view). Deal flow is typically slow, email in-boxes are less crammed and the chances of getting in front of a decision maker are better than any other time of the year (that is of course if they aren’t windsurfing off the coast of Saint -Tropez).
I’ve been at OpenView Venture Partners for almost 3 years with the goal of finding new expansion stage companies to add to our portfolio. During my tenure, OpenView has invested in seven companies; out of those seven 2 closed in July, 1 closed in May, and 1 closed in June. I’ve seen over 50% of the deals close in the summer months. And, as of right now my team and I are working on some very exciting things with the hopes to make a couple of announcements during the current summer months.
While dealing with a less stressed and more relaxed team of investment professionals constitutes a great opportunity to pitch, you’ll still need to be aware of a couple things:
1. Folks are on vacation in the venture world just like any other industry so it may be tougher to get everyone in one room at the same time for a face to face. Conference calls work, but syncing up schedules when one partner is on vacation and another isn’t makes for challenges…be patient here.
2. Performing due diligence is one of the most important aspects of our role as investors. During the summer, because we depend on your customers and employees, along with outside lawyers and other tech professionals to help us with our evaluation, we have to deal with their summer schedules as well (and they are frequently on vacation too). Thus, the diligence process may take a bit longer to get through. Again, be patient.
Given the good moods often on display in the summer months, going out to raise capital may be the best time for your company. If you’re in Boston and want to chat, we’re here and we’ve got a roof deck complete with cold beers…
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