Funding roundtable: ‘You can’t fake it’ and more funding advice from KC founders

Your company is steadily growing, but it looks like you’re nearing a plateau.

[pullquote]“It also takes grit. It takes an unbelievable amount of fortitude just knowing that you’ll never give up. It’s possible.” – Brock Stechman, co-founder of DivvyHQ[/pullquote]

Perhaps your startup is doing just fine, but a well-heeled competitor just entered your market and slapped a target on your customers. Or maybe you’ve got a solid idea but little dough to get it off the ground.

Regardless of the case, you need an injection of capital to take your business to the next level.

Where do you start? What should you do?

That’s what we asked five Kansas City entrepreneurs that have collectively raised more than $20 million for their companies as part of the final installment of our funding roundtable series. For a more formal introduction on this series and its five participants, please refer to part one on Kansas City’s investment culture and evolving economy.

Below are excerpts from our conversation with five founders on their advice to entrepreneurs on raising funds both locally and nationally.

Brock Stechman, co-founder of DivvyHQ: I think the very first thing is that everybody should read the book Pitch Anything by Oren Klaff. … But also what I’d say is that you can’t raise if you don’t have a good company. You can’t fake it to an investor. You have to build a sound company. You have to focus on every aspect of building the company, which is really hard. You can’t just focus on marketing. You can’t just focus on the product. You can’t just focus on brand development. You can’t just focus on selling. You’ve got to focus on everything, simultaneously. That’s going to put you in the best position to succeed and raise money.

It also takes grit. It takes an unbelievable amount of fortitude just knowing that you’ll never give up. It’s possible. I think anybody can raise (funds) if you’ve got a pretty good product and you’re doing things to build a well-rounded company. Sometimes it’ll come easier for others. But it takes an incredible amount of persistence. Just know that you’ll find it somewhere. All you need is one investor to say yes.

Nick Franano, CEO of Flow Forward and Metactive: Have a sense of mission and focus on the needs of everyday people. I definitely think the Kansas City community is a caring community. It’s not all about money in Kansas City. We are a giving and caring community, which is reflected in the high level of philanthropy and church attendance. People like to help other people in this town.  People seeing that you’re doing this for a reason other than just making money helped us.


Another thing I think that helped us was having a tremendous respect for the investor all the way through to exit. It’s their money and as soon as they give it to you, that matters. You have to respect that and do everything you possibly can to make them money.

Laura Steward, CEO of Video Fizz: There are a lot of resources in the city that are made available to people that maybe aren’t utilized initially. If I hadn’t done Pipeline, I can assure you that I would have burned through a lot more money and my business would still be my old business. That is a resource that’s here in Kansas City that exists and is world class.

I got a lot of information from going to the Kauffman Foundation and going to watch 1 Million cups. … As a person starting out you have to look for resources that exist inside the community and take advantage of those. You’ve got to be open to letting opportunity come your way.

Jeff Blackwood, CEO of ABPathfinder: Focus on creating a sales funnel of investors and go hit as many people as you can out there. Yeah, you’re not going to be able to talk to 70, 80 percent of them. But then you get to talk to that 20 percent and then of those, you get to pitch 5 percent of those. It’s just about how do you keep working the numbers.

Get your story out to as many people as possible and treat every one of these presentations, including the ones to local angel groups, as an opportunity to hone your pitch, learn what they like, don’t like, and just keep moving forward with the ball and go to those people that actually are going to look at writing a check to you.

Callie England, founder of Rawxies: As soon as you start developing your company, find influencers in those groups or those who are investing because you’re going to need to build a relationship with them in Kansas City for two years. Make a conscious effort to let them know that you’re an entrepreneur that is willing to learn, is not bull headed, does not know everything. Meet with them monthly. Have them help you.