How to stand out when fundraising

Every founder wants their vision to become a reality. That is why it is crucial to know how to stand out when fundraising.

In the startup world, founders are acquainted with venture capital fundraising in its different stages: pre-seed, seed, early stage, Series A, Series B, Series C, and so on.

Fundraising in its infant stages give quite an impact. If your company is VC-backed (venture capital-backed), it will automatically give credibility and spark some interest in your later-stage funding.

So, if you’re a founder raising your pre-seed or seed round, here are some tips that will help you in your journey.

Before You Let Out a Single Word To Investors

1 – Make sure your company has a strong foundation.

It is a great tactic to stick to the fundamentals. The very reason why some companies can live from only a few years to spanning a century is that they’re serving a specific market with a specific need.

There are millions of business ideas out there so make sure you built your company with solid roots that won’t be easily swayed.

2 – Have your MVP ready.

An MVP or Minimum Viable Product is an early version of your product that attracts early customers. On normal days, we can say “It’s the thought that counts”. However, fundraising people beg to differ. It’s not the thought that would count but the actual product in action. Having users or customers in your initial prototype is a good sign that your product is working. At the end of the day, having customers are one of the deal breakers in running a business.

3 – Create a solid pitch deck.

Putting together a coherent pitch deck is like an onion. It will have a lot of layers to it. And as you speak with a lot of investors, those old layers will be replaced with new ones.

You see, your pitch deck from a few months back won’t be the same pitch deck when you reach your seed funding.

Every time you talk to investors, you will be posed with questions, and thrown with possible loopholes to your pitch. Take note of those questions and tweak your deck accordingly.

4 – Always do your diligent research on the VC firm.

A simple visit to a VC’s website will let you know if you’re a good fit for investors and vice-versa.

Oftentimes, VCs will state what their thought process is in deciding who to fund.

  • Look out for sections/keywords such as Investors, How We Invest, and Criteria to know more about who they’re looking for. Peruse the checklist and make sure you tick all the boxes.
  • Look at their portfolio. Often times they are sectioned according to the areas they invest in. (E.g Deeptech, Fintech, Climatetech, etc). If your industry is there, there’s a good chance that they may want to invest in your startup

A VCs website can hold the key to whether you should go submit your deck or pump the brakes on your submission.

During Your Exchange with Investors

1 – It’s not enough to just submit your pitch and hope for the best.

On a VC’s website, sections like “The Team” often hold contact details or links to social network accounts of VC decision-makers. Since they are decision-makers, they hold considerable influence over the investment, not to mention, they could also add funds to your company from their personal finances.

Do your diligence to connect with them to form connections. Sure, a solid company proposition is great. However, the majority of VCs also bet on the founders. So creating connections through research or introductions would be gold.

2 – When pitching your deck to investors, take note of their criticisms and questions

They will likely come up with a lot of questions for clarification.

Questions = Resistance/objections. Tweak your message according to them.

The more you chip at their objections and answer their doubts, the more they’ll be willing to go to the next steps with you.

It also helps if you know how to pitch to investors in an advanced way.

After Your Exchange with Investors

1 – Send a Follow-Up Message

You want to give them ample time to review your pitch deck and talk internally. An estimate of 2 weeks would be good. However, please gauge the capacity

2 – Keep investors in the loop

In the event that you receive a resounding “NO”, don’t be discouraged.

A “No” won’t always be a “No”. It’s possible that you might be too early for them or they might be looking for some traction before pursuing you.

So occasional updates on your progress will keep them interested and keep that connection.

And when the time comes, that simple gesture will have some merit.

3 – Ask them for introductions

If their firm is not interested in funding you, they might have connections that will. Simply thank them after the call and ask if they have anyone in mind that might be interested in your pitch. You’ll be surprised to be connected with other investors, founders, and like-minded people that can help your cause.

4 – Receive feedback

Turn that “No” into something productive. Should they not continue the next steps, you can ask investors if they’re available for a quick call to give you feedback and bounce off of thoughts and ideas like a brainstorming session and general impression workshop.

Every founder has their own way of attracting investors to their company. However, these guiding principles are definitely the foundation of every fundraising journey. Use them to your advantage.

If you found these tips useful, feel free to contact me here where we can discuss ideas and collaborations as founders and talk about how we can work together if you’re an investor.

Looking forward to hearing from you.