Christopher Kape is a serial entrepreneur and Vancouver venture capitalist who has over 20+ years of experience in business strategy, financing, mergers and acquisitions, and providing other strategic advisory services.
In 2001, Chris founded JAMCO Capital Partners Inc., an early-stage investment and strategic advisory firm that focuses on a number of industries, including gaming, high-tech, food and wellness. He also maintains officer and director positions with a range of firms and businesses including Riversol Skin Care Solutions, The Pie Hole Holdings and Midnight Paloma, among others.
We spoke with Chris Kape to gain his perspective on building a business and some of the common mistakes that entrepreneurs make when raising capital.
How did you get your idea or concept for JAMCO?
Christopher Kape: By the end of 2001, most dot-com stocks had gone bust due to overly optimistic expectations in their potential. During the dot-com bubble, raising money was easy with sky high valuations and an exhaustive list of successful and profitable go-public transactions that lead to capital abundance. Eventually, realistic expectations started to set in and investors realized that the dot-com companies, for the most part, could not deliver on their promises. Everyone who was involved in Internet-related businesses found themselves in an all of a sudden unique situation – raising capital was once again difficult – as it had traditionally always been. As a participant in the dot-com industry, I rode out the highs and the lows, having raised capital in both markets, and saw an opportunity to take a calculated risk leading to the founding of JAMCO Capital Partners (www.jamcocapital.com).
Our first investment was a telephone-based dating service named Telematch. I was able to manage that business, which I bought from a trustee in bankruptcy, and grew it to a formidable operation for its time and industry. The successful exit from the dating services business provided JAMCO with its sizable pool of capital to use going forward.
From your experience, what is a common mistake an entrepreneur makes when searching for capital to fund their businesses? How do they avoid such mistakes?
Christopher Kape: There are many common mistakes that entrepreneurs make when raising capital – but there are a few that seem to stand out and I see them time and time again. They are:
1- Practice delivering the pitch to enough people in your ‘friend and family’ network first and be very open to receiving critiques and comments when doing so. Every person you pitch to is an opportunity to learn something new – even people that you know cannot invest in your business. Listen to their comments, have a dialogue and really try to understand if there is something you can get out of it to further equip yourself for when these pitches really matter. When you are more polished and eventually make your pitch to larger and / or a more qualified investor, you will see better results.
2 -Don’t rely too heavily on friends and family for start-up capital if you don’t have to. While the friends and family route is the most common and easiest way for new entrepreneurs to raise money, it has a lot of drawbacks. If you do raise money from this group, make sure they understand the full risks involved in a startup investment. While the rewards are generally quite large for investing in something at an early stage that succeeds, most businesses will fail and you will likely lose their money. Make sure they understand this, and that you will likely have a bumpy road getting going. Planning is one thing but once you switch from theoretical to practical (and are running the business), you may have to pivot a few times, no matter how well you plan in advance.
3 – Lastly, oftentimes entrepreneurs don’t network with the right people who are seasoned at analyzing and understanding startup investment opportunities. If they can connect with at least one angel investors in their city, chances are they’ll be introduced to a network of them who are willing to listen to their idea and who have the experience to provide proper feedback. It is also a good idea to check for angel network gatherings where multiple projects can pitch to multiple people at once. If this route is taken, make sure you are very well prepared – these people are sharp and will ask the tough questions. Try to have pitched many, many times beforehand such that you are well rehearsed and experienced in answering tough questions.
If you had one piece of advice to a young entrepreneur just starting out, what would it be?
Christopher Kape: Create your own future! You have to work for what you want because no one is going to give it to you. In order to win big, you have to take risks – but try to make them as calculated as possible.
Though I’ve worn many hats in different areas and industries, my advice is to focus on one area and become an expert in that field. As an investor, that is the type of entrepreneur I look for when choosing to make an investment.
Outside of your work at JAMCO, you have made it a focus to lend your hand to service organizations, both locally and abroad. What valuable experience have you gained on some of these trips?
Christopher Kape: Many entrepreneurs have used their success as an opportunity to do some good in the world. Once you become more established, you can relinquish some of your work responsibilities to your employees and explore the many service opportunities that are available. Traveling to other countries has been a humbling experience for me, especially seeing a lack of what we take for granted such as clean water, health services, paved roads, etc. It puts your worries as a business owner into perspective – that’s for sure. I recently went on a business trip to Bulgaria where I pre-planned a day of volunteering with a local NGO that provides meals for homeless people. I ended up working with many volunteers who were from a vast cross section of socio-economic life in Sophia, the capital city of Bulgaria. I learned much about language, culture, government, economy and life in Sophia and Bulgaria, which assisted greatly in my business meetings throughout the rest of the week. It was a remarkably rewarding day to be able to arrive in another country and immediately immerse myself in service work, make new friends, and gain a totally different perspective on the people and the country than I otherwise would have being in office boardrooms. These types of experiences that I gain from service work are just as important as any work related ones.
To what do you attribute your success?
Christopher Kape: There is an expression I used to like that went something like this: “success is 10% hard work and 90% luck”. In today’s day and age, that has changed. The new expression should be more like: “There is no success without hard work – it’s the only required component. The rest of the formula is 25% motivation, 25% intelligence, 25% luck and 25% timing”. This really says it all. You don’t have to have all the components to be successful except to be willing to work hard.
