In the high-stakes world of national security technology, government contracts rarely go to underfunded startups. So when Phil Libin launched Cambridge, Massachusetts-based CoreStreet in 2001, he knew he needed enough funding to last long term. But his broad search for venture capital went nowhere.
Libin, 34, changed his fundraising strategy to include only VC firms with both deep pockets and extensive security-industry experience. Those criteria shrank the pool of VC firms he approached, allowing him to spend more time with each one.
"Early on, we talked to more traditional VCs, and everyone told us we were crazy," says Libin. "But as soon as we decided to go for high-value investors, the formula started to work." Not only did CoreStreet get offers from three VC firms, it also landed million-dollar contracts from the Department of Defense and large corporate customers, helping sales reach about $5 million in 2005.