John Grange speaks at Cornstalks at the Greater Omaha Chamber of Commerce. Photo by Brittany Mascio.

At last night’s Cornstalks, a monthly gathering for pre-seed and seed entrepreneurs in high growth businesses, tech entrepreneur and investor John Grange shared his experiences with his former company, PowerDNN, and his current stealth startup, Layered Innovations.

Throughout his presentation, Grange delivered lessons learned about raising capital and integrating into the entrepreneurial community.

Here are takeaways from his talk:

Angel funding to solve issues in different stages

Whether you’re in the stage looking for capital or you’ve gained success and need to scale, Grange said, “there’s nothing wrong with initially trying to hit a good single or double and generate revenues. Revenues are really, really important.”

And with the advent of different services like Amazon, the venture capital model has changed, and Grange said companies don’t need as much money for a startup. However, from a founders’ perspective, this is important to bootstrap longer and generate revenue. “Once you have revenues,” Grange said, “a ‘new guy’ can come into the picture … the bank.”

“The bank is cheapest money you will ever find.”

Although it may be hard and the documents are a pain, Grange said entrepreneurs sell themselves short if they don’t go to the bank. “If you can get cash flows, you can go to the bank.”

Gray Hair

About five years ago, Grange said investors, “weren’t really lending money to kids who didn’t really have any money.” And based on his experience as an entrepreneur the game to the bank can be as simple as smoke and mirrors or “gray hair.”

“I can’t tell you how beneficial it is to have someone who understands how to raise capital, revenue models and help you purchase.” Although Grange said it can be hard to think about spending money on seasoned CFOs when you’re building out a product, having someone come in, develop a cash flow model and speak a financial language is important and provides legitimacy and credibility to your project.

“For example … we wanted to grow by acquisition and instead of looking for our investors, we knew our CFO had worked with banks. So, in turn, we got to keep all of our equity in the company.”

Omaha’s “Pockets of money”

Grange said that within this city there are “pockets of money” that don’t always come with the formal title of an investor. “It’s beyond who is angel or a VC, it can be about who has money.”

He said that Omaha is starting to connect but still has a way to go. There are not enough formal places to pitch, so “you have to hustle.” Angel funding makes more sense than the traditional venture capital route.

Grange encouraged finding a way to get connected and reaching into these pockets even if that includes going to these individuals personally. “All these different pockets exist, some are just buttoned up.”

Beers and friends

Grange attributed his success in part to his social skills as a listener. Befriending folks along the way of his career has helped him build relationships with customers and business partners. He said talking to people and becoming in-the-know on what is happening in the city is key. Attending more casual meetups has shaped business opportunities and in his experience has given him a greater comfort level and ease working with people he considers “business friends.”

And for the young entrepreneur, Grange harped on this concept throughout the night: the older folks with “gray hair” love to engage with young hungry entrepreneurs in this city and he urged to find a way to be connected.

Grange said becoming a friend and mentor to entrepreneurs looking for capital will be a way for him to do his part in moving the city forward, as well as encouraging more relationships and entrepreneurial risks.

Mark your calendars for the next Cornstalks meeting: July 28, 6:30 p.m. – A lawyer and accountant will talk about unique startup issues, such as term sheets, formation and intellectual property.

For tips or suggestions regarding what you’d like to see happen at future Cornstalks events, contact Cornstalks organizer Tom Chapman at tchapman@omahachamber.org.