“First of all, I’ll say that this is a secret to everyone who hasn’t done it,” Kavitta Ghai said.

Ghai is referring to raising venture capital funding, something Ghai didn’t know even existed when she and Jordan Long presented their startup idea during a pitch competition – a three-slide presentation, two of which said “welcome” and “thank you.” Their school, University of California, Santa Barbara, did not offer a comprehensive business degree to students.

Today, that three-slide pitch is Nectir, a Playa Vista-based education tech startup armed with $6.3 million in startup funding, including a $4 million seed round the company announced it raised in December. The round included participation from venture firms like Long Journey Ventures, Santa Barbara-based Entrada Ventures and Behind Genius Ventures, located in Mid-Wilshire. Nectir makes large language models used by the likes of OpenAI and Anthropic compliant with the Family Education Rights and Privacy Act, allowing schools to use more customized versions of generative artificial intelligence as teaching assistants for students.

A process that takes years

But the process that started from learning about the concept of venture funding and ended with the recent raise took years. After the pitch competition, Ghai and Long were connected with Entrada Ventures, which spent the next two years guiding the Nectir founders through the process of pitching, networking and negotiating before Entrada Ventures wrote Nectir’s first check.

“That was the first time that it sparked in my mind, like, my God, I can bring in capital to build this business, to make my dream come to life,” Ghai said. “And there are people out there who will support me in doing that.”

Ghai went to work – she supplemented guidance from venture firms with X (formerly known as Twitter) users composed of venture capitalists, seasoned startup founders and entrepreneurs who provided advice on how to get the attention of venture firms drowning in pitches.

Finding your ‘soul mate’ investor

Ghai networked, connecting to venture firms via other startup founders or venture firms. She said 98% of her pitches would end in an immediate no. Some would have as many as six or seven meetings with the company’s founders before declining. 

“Really it’s going to come down to the individual and kind of the vibe,” Ghai said. “A lot of VCs explained it to me like dating. You’re going to go on a bunch of dates and very few of them are going to turn out to be your soul mates.”

While Ghai received several rejections or no replies, she also declined meeting opportunities on her own end – much like dating, Ghai had to figure out if she was interested in working with those venture firms as well.

“Is this someone that I can call at three in the morning when s*** is hitting the fan? And they’re going to be there by my side to help me fix it?” Ghai said.

Indeed, receiving funding from a venture firm is a long-term commitment, and not all companies may want to incorporate venture funding into their strategy. Those going down the venture capital path, Ghai said, have to be willing to build their nascent startups into billion-dollar companies in order for those venture firms to get a return. Startups and their venture firms maintain relationships for years as the company builds up to a successful exit.

“If you do become a VC funded company, it becomes a whole different ball game,” Ghai said. “You’ve got to stay in the game. You’ve got to keep raising VC funding. It becomes a lot more difficult to reach break even and become profitable because you’re taking on these large amounts of capital.”