Derek Wang has experience fundraising in a few ways. As CEO and co-founder of Stratifyd, he's raised several rounds of capital over the past few years, including a $10 million Series B in March 2021. He's also landed grants as a research professor. Raising capital for a for-profit venture through investors, he says, is a unique experience.
"It's so different," he says. "From academic to industry or to business and then to the venture capital side, it's leap of light years because you don't get that exposure."
He says to get the first check he received from an investor, he flew out to Silicon Valley and spent essentially a month basically knocking on the doors of people with whom he had no relationship.
"It truly became a Valley story in that way. I met (the investor) in a Starbucks from a friend of a friend," he says. "We had a conversation for 45 minutes and she was like, 'I'm ready to cut you a check — you need to talk to my Stanford professor friend the next day to do due diligence.' I was like, that's fine."
He met with the professor soon after and got a quarter-million-dollar check. It was the first deal Wang made. And that deal, he says, pried open a lot more doors for the venture.
"When you're making a deal it's not about just one check covers all. It's all about that network of people," he says. "VCs (have a) huge people network behind them and then over the years that has grown with more exposure with what we have accomplished. Fortunately for me (I'm) surrounded by good investors that will introduce you to great investors."
As he builds out his investor network, Wang says he ensures alignment with his vision in part through transparency. When he meets with investors, he's quick to tell them what his company envisions it can do. The investors then either believe in that story and that vision or don't. For Wang, it's better to quickly part ways and move on to the next opportunity.
He's also learned the importance of building through a strong board.
"Your board is actually a multiplier of your vision to that field where you can align — most of the boards now are investors — you're aligning your vision with them they can also help out to say, here's another company that we typically work together and then broaden that scope for you," he says. "So, it's a one-two punch. It's about building that groups of groups of people and tagging along and bouncing off ideas with them all the time."
Wang spoke at the Charlotte Dealmakers Conference about building Stratifyd, raising capital and growing his investor network. Hit play to catch the full interview.