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Everything You Need To Know Before Approaching a VC

Career

Building a business makes you independent of investors, which is a good thing. But venture capital is a way to scale yourself up and grow rapidly. Here, Tamar Donikyan, a corporate and securities partner at the prestigious law firm, Ellenoff Grossman & Schole, gets down to the nitty-gritty of how you should use an investor for being conducive to where you’re trying to get with your company.


Tamar A. Donikyan

Diversity will take you further than you think it will.

More diversity, whether it’s more diversity in the boardroom, company, or even thought – leads to better outcomes for companies. Founding teams with a woman on it perform 62% better than all-male teams.

Nothing takes the place of experience.

No matter what you’re selling, you’re selling it to large corporations, and there’s a process to do that. The most effective people are the ones who have already done it in some capacity.

The VC firm will research you.

While they don’t necessarily use specialized software, investors like to make sure they’re betting on the best of the best by doing some market research. There are databases and other resources for doing this; for example, there’s App Annie for understanding how big an app is. Fortunately, the databases the investors use are the same ones you can use: Mattermark, CrunchBase, and Pitchbook are all readily available to give you information about your competitors. Only good can come out of being well-read.

"…on the order of 4000 ‘fundable’ companies a year, that want to raise venture capital...…about 200 of those will get funded by what’s considered a ’top tier VC’; about 15 of those will someday get to a 100M in revenue…" - Marc Andreessen

Get to know the VC firms and vice versa.

Investors expect you to know about them and what assets they have. Really understand the person you’re talking to and what other deals they’ve done. What are the things that investors should want to know about your company, and how can you expose them to that? You need to know why the investor you’re selling to is perfect for you, and be prepared for feedback. People want to invest in people who listen, so make sure you listen.

Keep networking.

Non-database research is all about building a relationship. Irrespective of whether you’re ready to get the money you seek, try to access individuals that have the expertise to bring value to your company. Remember, value is more than just based in dollars and cents. Add investors to your mailing list and send meaningful updates. Just because they weren’t interested at first doesn’t mean they can’t become interested later – people come around.

An investor-entrepreneur relationship is not a Hollywood marriage; you can’t just call it quits after a few months.

The relationship between an entrepreneur and her investor is a 7-10 year commitment. Make sure the people with whom you want to work are people that you’re excited to work with in the long term. Make sure you know the motivation behind their decision, and that their ideas of the larger picture are aligned with yours.

Don’t think crowdfunding will take the place of venture because you’d be betting your chips on the wrong pony.

At best, crowdfunding is great for the first round of financing, not the later stages.

Tenacity is the best quality an entrepreneur can have.

Like anything, raising capital is a numbers game. Getting a dozen rejections doesn’t mean you should be discouraged. If you believe your business has value, then persist like there’s no tomorrow. Make sure your tenacity matches with that of those you are asking for backing.

Not all investors are right.

You know your product, and you’ve done your research. You know more about your product than they do. A lot of the time, investors can be wrong.

Venture isn’t the only option, and it’s not always the best option.

For those individuals who have special financing needs in order to build a larger idea, VC makes sense. For others, it may be exactly what they don’t need.

At the end of the day, investors want to know that you have a big vision and are thinking about a large opportunity, but that you’re also thinking strategically. Show all of the potential – show where you are today, and include in that your experience and in your team. It’s a balance; you must both demonstrate that you have a tremendous opportunity on which you can capitalize in the future, but you must also be able to convey that you understand the small steps and the harder, less fun things you have to do.

Culture

A Modern Day Witch Hunt: How Caster Semenya's Gender Became A Hot Topic In The Media

Gender divisions in sports have primarily served to keep women out of what has always been believed to be a male domain. The idea of women participating alongside men has been regarded with contempt under the belief that women were made physically inferior.


Within their own division, women have reached new heights, received accolades for outstanding physical performance and endurance, and have proven themselves to be as capable of athletic excellence as men. In spite of women's collective fight to be recognized as equals to their male counterparts, female athletes must now prove their womanhood in order to compete alongside their own gender.

That has been the reality for Caster Semenya, a South African Olympic champion, who has been at the center of the latest gender discrimination debate across the world. After crushing her competition in the women's 800-meter dash in 2016, Semenya was subjected to scrutiny from her peers based upon her physical appearance, calling her gender into question. Despite setting a new national record for South Africa and attaining the title of fifth fastest woman in Olympic history, Semenya's success was quickly brushed aside as she became a spectacle for all the wrong reasons.

Semenya's gender became a hot topic among reporters as the Olympic champion was subjected to sex testing by the International Association of Athletics Federations (IAAF). According to Ruth Padawer from the New York Times, Semenya was forced to undergo relentless examination by gender experts to determine whether or not she was woman enough to compete as one. While the IAAF has never released the results of their testing, that did not stop the media from making irreverent speculations about the athlete's gender.

Moments after winning the Berlin World Athletics Championship in 2009, Semenya was faced with immediate backlash from fellow runners. Elisa Cusma who suffered a whopping defeat after finishing in sixth place, felt as though Semenya was too masculine to compete in a women's race. Cusma stated, "These kind of people should not run with us. For me, she is not a woman. She's a man." While her statement proved insensitive enough, her perspective was acknowledged and appeared to be a mutually belief among the other white female competitors.

Fast forward to 2018, the IAAF issued new Eligibility Regulations for Female Classification (Athlete with Differences of Sexual Development) that apply to events from 400m to the mile, including 400m hurdles races, 800m, and 1500m. The regulations created by the IAAF state that an athlete must be recognized at law as either female or intersex, she must reduce her testosterone level to below 5 nmol/L continuously for the duration of six months, and she must maintain her testosterone levels to remain below 5 nmol/L during and after competing so long as she wishes to be eligible to compete in any future events. It is believed that these new rules have been put into effect to specifically target Semenya given her history of being the most recent athlete to face this sort of discrimination.

With these regulations put into effect, in combination with the lack of information about whether or not Semenya is biologically a female of male, society has seemed to come to the conclusion that Semenya is intersex, meaning she was born with any variation of characteristics, chromosomes, gonads, sex hormones, or genitals. After her initial testing, there had been alleged leaks to media outlets such as Australia's Daily Telegraph newspaper which stated that Semenya's results proved that her testosterone levels were too high. This information, while not credible, has been widely accepted as fact. Whether or not Semenya is intersex, society appears to be missing the point that no one is entitled to this information. Running off their newfound acceptance that the Olympic champion is intersex, it calls into question whether her elevated levels of testosterone makes her a man.

The IAAF published a study concluding that higher levels of testosterone do, in fact, contribute to the level of performance in track and field. However, higher testosterone levels have never been the sole determining factor for sex or gender. There are conditions that affect women, such as PCOS, in which the ovaries produce extra amounts of testosterone. However, those women never have their womanhood called into question, nor should they—and neither should Semenya.

Every aspect of the issue surrounding Semenya's body has been deplorable, to say the least. However, there has not been enough recognition as to how invasive and degrading sex testing actually is. For any woman, at any age, to have her body forcibly examined and studied like a science project by "experts" is humiliating and unethical. Under no circumstances have Semenya's health or well-being been considered upon discovering that her body allegedly produces an excessive amount of testosterone. For the sake of an organization, for the comfort of white female athletes who felt as though Semenya's gender was an unfair advantage against them, Semenya and other women like her, must undergo hormone treatment to reduce their performance to that of which women are expected to perform at. Yet some women within the athletic community are unphased by this direct attempt to further prove women as inferior athletes.

As difficult as this global invasion of privacy has been for the athlete, the humiliation and sense of violation is felt by her people in South Africa. Writer and activist, Kari, reported that Semenya has had the country's undying support since her first global appearance in 2009. Even after the IAAF released their new regulations, South Africans have refuted their accusations. Kari stated, "The Minister of Sports and Recreation and the Africa National Congress, South Africa's ruling party labeled the decision as anti-sport, racist, and homophobic." It is no secret that the build and appearance of Black women have always been met with racist and sexist commentary. Because Black women have never managed to fit into the European standard of beauty catered to and in favor of white women, the accusations of Semenya appearing too masculine were unsurprising.

Despite the countless injustices Semenya has faced over the years, she remains as determined as ever to return to track and field and compete amongst women as the woman she is. Her fight against the IAAF's regulations continues as the Olympic champion has been receiving and outpour of support in wake of the Association's decision. Semenya is determined to run again, win again, and set new and inclusive standards for women's sports.