By Kati Suominen
On January 5, I had a chance to be a panelist at a discussion titled Enhancing Opportunities in the Transatlantic Market: Best Practices for SMEs and Startups Including Innovative Finance, organized by the European-American Enterprise Council and the U.S. Commerce Department, alongside the Consumer Electronics Show in Las Vegas.
TradeUp director Kimberly Benson moderated the seven-member panel of people who help make business and investments flow across the Atlantic. The tips I offered to U.S. and European entrepreneurs that look to alternative financing platforms to raise capital include:
- Do your homework. With financing platforms proliferating, companies need to do their homework to find the right fit in terms of sector, size, size and type of raise, types of investors (e.g., angels vs. institutionals), and preferred monetization model (e.g., commission vs. subscription). Household name platforms are not necessarily the best bet: research the market for providers that are working on, and have investors for, companies like yours.
- Consider alignment of interests. If you want the platform to be on your side, follow the money. Consider how the platform is paid. If the platform makes money on raises that succeed, it is interested in helping you raise; if it makes money on monthly subscriptions, it has an interest in filling the platform with companies like yours. You may want to work with the former set — and make sure you work with a team licensed to market your raise (act as broker-dealer) and is in compliance with U.S. financial regulations.
- Be proactive: Advertising your raise on a platform is just the start. It gets you 5 percent of the way to your goal. Even if you have an expert platform team promoting your raise, they are not inside your business. It is your job to keep the fundraising team up to date on developing within your business and with your clients. It is also your job to market and do PR for your business and generate buzz useful for your raise. And it is your job to close an investor coming through a platform — so do perfect your pitch.
TradeUp is keen to work with European companies coming to the U.S. market and U.S. companies expanding to Europe. Headquartered in Los Angeles, the firm also has a presence in London and staff that speaks seven European languages. Contact TradeUp if you are looking to cross the Atlantic and need capital and counsel alike.
Kati Suominen is a visiting assistant adjunct professor at UCLA Anderson and founder and CEO of TradeUp. Her post originally appeared on the TradeUp blog. Suominen will travel to Davos, Switzerland, this month to participate in the Economist’s keynote discussion on digital ecosystems, coinciding with the 2016 World Economic Forum.