Veteran Venture Capitalist Wal Van Lierop Shares His Advice On Building A Tech Startup And Pitching Investors
Wal van Nierop
Nov 1, 2021
Published in BCBusiness
No matter how good its technology is, a company without a strong team will fail, says the Vancouver investor
With Vancouver recognized as a North American hotbed for tech talent, the region is home to plenty of people capable of making big moves in that sector. However, one barrier that prospective founders can face is raising enough funds to launch a startup. That’s why they often turn to venture capitalists and other professional investors to help make their idea a reality.
Wal van Lierop, founding partner and executive chair of Chrysalix Venture Capital, has seen his share of pitches over the years. Vancouver-based Chrysalix, which focuses on industrial innovation, currently has 14 companies in its portfolio, while another 12 have exited via an acquisition or an initial public offering.
Van Lierop, who started his firm in 2001, offers these tips on building a strong team, sharpening your leadership skills and pitching to a venture capitalist.
Believe in yourself, but remember: team is the theme
Van Lierop counsels founders to believe in themselves and their idea. “To convince people to become part of your team, or to convince investors to put money behind you, you have to have an unwavering belief that you’re going to be very successful,” he says. “You really need someone with not just elements of brilliancy in their pocket but also a tremendous tenacity of, I am going to do this.”
Self-belief is one thing, but van Lierop says a successful business also needs a strong team. His motto to drive home that message? Team is the theme.
“That tenacity can go overboard, and people may only believe in themselves. You cannot build a billion-dollar company on your own,” he explains. “It’s all about people. If it comes across that the founder is very brilliant but they’re not a team player, that could be a showstopper very quickly.”
Van Lierop has seen outstanding teams with middling technology make more money than half-hearted ones with brilliant tech. “You go from your individual breakthrough idea to building a company,” he says. “A company is a team, and if you don’t have a good team, your company will fail.”
Don’t be a micromanager
Your team should be able to count on you as a leader, but they also need autonomy, van Lierop maintains. For him, one of the keys to good leadership is not getting in employees’ way. “Let them do whatever they can do in the best way possible,” he advises. “Don’t micromanage; you should let the troops go.”
A tip for building leadership skills: “I would advise many young people to seek a good mentor,” van Lierop says. “Sometimes it’s good to ensure that there’s a little grey hair that can help you. It’s not someone who necessarily sits on your board. ”
Have a T-shaped background
Asked what education founders should have, van Lierop says he’s found that the most interesting people are those with a “T-shaped” background. “That means that they have a very big specialization in one area, but they also have a very wide knowledge of a lot of other stuff.”
This principle applies to founders working directly as well as indirectly with technology, he adds. For example, it would be useful for someone working in the finance department of a startup to know something about its technology so they can communicate better with technical workers.
“Everybody has a little bit of a diamond in the rough, and they should really ensure that it becomes a real diamond,” van Lierop says. “But at the same time, you need to ensure that you know a little bit about all the other things around it.”
Get your pitch ready (and we do mean ready)
Let’s say you tick all the boxes so far: you’re self-confident, with a crack team and a T-shaped knowledge base. To take your business idea to the next level, how should you pitch it to a venture capitalist?
Van Lierop says founders should make sure they’re well prepared before the pitch. Having good answers to these questions is essential:
What do you want to do with your idea?
Why do you need the money?
How are you going to use that money?
What is the size of your market?
How can you ensure that the venture capitalist will earn money?
Is there an outline of how this idea is going to be a big market opportunity?
Venture capital firms like Chrysalix get many pitches, so founders need to present this detailed information clearly and concisely. “How do you stand out from the pack?” asks van Lierop. “We here at Chrysalix get 80 deals a month. That means that we cannot spend days on each opportunity because next month there will be another 80.”
Make sure you’re unique
Van Lierop and the rest of the Chrysalix team look for “platform technologies or services that have a breakthrough element that’s totally new,” he says.
“You need to be unique. If you think you’re unique, you better figure out if somebody else in the world is not doing the same thing,” he says. “If your addressable market is just a few million, or even under a million dollars, it’s not worth our time. But if your addressable market is part of a multibillion-dollar market, now it becomes very interesting.”
In van Lierop’s world, the pitches that fall flat are those where the founder thought too small or “kept things too close to their chest.”
Looking ahead, there’s a big opportunity for prospective founders—particularly engineers—to disrupt traditional industries such as mining and construction, he reckons.
“I urge all engineers in all schools to not just be focused on what is the next app that comes out of Silicon Valley and can I do something similar?” van Lierop says. “I think that in the next 20 years, you will see much more fundamental change in traditional industries. The right engineers and the right founders can build phenomenal companies.”