Local experts share their advice for getting venture capital

According to an end-of-year report from research firm Pitchbook, venture capital investments globally rose 5.4% in 2024 to $386.5 billion in 2024 from the prior year, with Philadelphia-area companies raising over $1 billion during the last quarter.

Getting this type of investment is not easy, but it can be instrumental in funding a company’s growth. How can business owners take advantage?

Bruce Peacock, a 35-year-veteran of the venture capital industry who has served as chief financial officer at a number of successful Philadelphia-area biotech and pharmaceutical companies, says candidates need to narrow down their potential venture capital investors. Not all companies are suited to venture capital firms, who generally invest large sums and expect significant returns, he said.

“If you’re looking to raise $5 million, venture capital’s probably not the right place for you to go,” he said. “You need to be prepared to tell your story, and it has to be: ‘If you give me the money, here’s how I’m going to get you a significant return.‘”

Peacock also stresses the importance of finding a venture capital firm that has experience with similar companies.

“Go where investors understand your technology and business,” he said. “You’re going to get nowhere if you go to a venture capital firm that doesn’t specialize in your industry.”

Mical Jeanlys-White, founder and CEO of WealthMore, which received more than $1 million in funding last year, said investors should align with the company’s vision and whom the founders enjoy working with.

“The dynamic between founder and investor matters deeply when challenges arise,” she said. “You want investors that you would like to have lifelong relationships with.”

Usually venture capital deals involve a syndicate of investors, led by one firm.

Justin Vogel, the chief financial officer at Tolerance Bio, which raised more than $20 million in a seed round of financing last December, said their lead venture capital firm helped them build an investment plan and brought in other investors to form their syndicate.

Jeanlys-White said having a lead investor is critical, particularly at the earliest stage of your search.

“A lead investor brings credibility, momentum, and opens doors to other investors,” she said. “They become your net promoter.”

Peacock advises firms looking for this funding to optimize their pitch around certain fundamentals like being clear on how much money you’re looking to raise, what you’ll do with it, how you’ll execute, why you will succeed, and how the investor gets an exit.

And although a typical pitch will include both historical (if any) and projected financial information, the most important elements in the pitch, according to Peacock, are the company’s founders and key technical people.

“They’re the ones with the story,” he said. “It’s not necessary to get hung up on details, particularly when making your initial pitch. Focus on telling a compelling story that answers the investor’s core question: Why is this worth betting on?”

Finding the right investor takes time. Cold calls rarely work. Most connections happen through constant networking.

“You never know where these investments are going to come from,” said Vogel. “What feels like a waste of time might be the meeting that changes everything.”

Peacock says founders should be “prepared for a long, multistep process that typically takes at least six months” even after you get a term sheet.

“Syndicates, data rooms, and due diligence all take time,” he said.

Vogel said that it took him nearly a year to land his financing and that he attended “countless meetings” during that period. His pitch deck changed constantly, shaped by investor feedback. For him, it was critical to stay in touch with interested firms even when they said he was too early.

“Persistence is crucial,” he said. “It’s going to take longer than you think.”

Vogel worked hard to keep his investor prospects up to date on his funding progress.

“A lot of firms loved our story but said we were too early,” he said. “Now we have quarterly calls with them. It’s part of fundraising long-term.”

Jeanlys-White used a “customer relationship management” approach, complete with data that ranked potential investors based on their likelihood and interest. This included months of calls, emails, and other follow-ups to build investor enthusiasm.

“It’s important to target venture capitalists who invest at your stage and in your industry,” she said. “I’m dumbfounded when I hear someone met with 300 VCs. … My approach was super surgical.”

There are countless companies looking for capital, and many VC firms receive hundreds of pitches every week.

Vogel wound up with five investors after pitching to more than a hundred firms. That shouldn’t be a discouragement, he said, as investors can pass on your proposal for “all kinds of reasons, like your growth state, their risk tolerance, or your strategy not aligning with theirs.”

Jeanlys-White warns about giving up too much equity by diluting your ownership. However, Peacock is less concerned.

“Dilution is real,” he said. “But so is value creation, and if things are done the right way, many founders may end up with 15% of a much larger pie.”