Richard Vague: ‘Bootstrap for as long as you can’ and more advice from the Gabriel Investments managing partner

Richard Vague, managing partner at Center City’s Gabriel Investments, says he immediately warms to startups that have bootstrapped and been resourceful.

Richard Vague has a few words of advice for entrepreneurs looking to raise capital, and he has the experience to back it up. The managing partner of Center City’s early stage fund Gabriel Investments said he remembers when a company of his had $20 million in unpaid bills with nothing in the bank.

“No one would take our calls,” said Vague, who co-founded two credit card companies.

How’d he get past the tough period? “Perseverance,” he said.

Vague spoke at the University City Science Center‘s monthly Coffee & Capital event yesterday, which allows entrepreneurs to chat with a local investor.

He heads up Gabriel Investments, which mostly invests locally and counts TicketLeap, DailyWorth and Center City marketing company Sidecar as its portfolio companies. He says he’s currently in talks with GoodCompany Ventures‘ startup Regalii for potential funding.

With a southern drawl and occasional “ya’ll’s” (he’s from Texas), Vague answered questions and offered advice to entrepreneurs. Here are three pieces of advice that stood out to us.

• “Bootstrap for as long as you can.” Vague said startups should only seek funding when there’s a “clear path to revenue.” What’s more, Vague said he immediately warms to companies that have “shown grit in finding resources” and been successful at bootstrapping. “That’s almost an indicator of success,” he said.
• Clarity is the key to a killer pitch. Be straightforward, Vague said. “You wouldn’t believe how many people spend way too long to get to the punchline,” he said. Keep the presentation short — 15-30 minutes is plenty, he says — and always have numbers to back up your pitch.
• Take your sweet time and don’t worry about it. “Beginning entrepreneurs grossly underestimate how long it takes to raise money,” Vague said. He knows from experience, saying, “I spent my whole life in a hurry.” Entrepreneurs should remember that time is on the side of the investor, he said, so using a deadline as a way to close a deal doesn’t work.