Tips for Fundraising Entrepreneurs

Below is the ‘Tip of the Week’ transcript from the Podcast Ep52: The Hunt for Investors, Part 2 (Mark Peter Davis)

• If you’re a consumer facing business or mobile app, the design, look and feel of your deck is critical.
• Don’t try to sell investors during the meeting.  The objective of the meeting is to get the next meeting, not to close the deal.  Focus on the exciting opportunity of the startup and it’s potential and get a second meeting.
• Great pitches are always framed as a story.  Don’t just regurjitate the details on the slide.  Tell the story that led you to address this unique problem.
• Avoid using the standard competitive matrix with features and checkboxes.  If the opportunity is compelling and disruptive, you should be attacking a problem in a different way that can’t be replicated.  The approach should not be trivialized by checkbox feature sets.

•  As a founding team, don’t argue in the meeting.  It will become clear that you’re not aligned on the vision and the plan to realize the vision if you are bickering during an investment meeting.  And it probably goes without saying, although I still see this frequently, do not argue with investors.  Even if they’re wrong, this won’t help the fundraising cause.
• At the very early stages, focus more on building the business than organizing a bunch of diligence materials.
• Consider board dynamics when fundraising.  Will it make sense to have a balanced board, investor controlled board of a founder controlled board?
• Every entrepreneur is faced with the founder catch 22…  needing capital to generate traction, yet needing traction to attract capital.  Remember that every founder has dealt with this issue and if one can’t bootstrap to enough traction to garner investment, the writing may be on the wall.
• Treat every venture as an experiment until it’s not.  If it works, you have a business.  Until then, it’s just and experiment and if it doesn’t work out, that’s fine.  The best entrepreneurs experiment often.  Recall that Mark said that failure is good and many of the best lessons come from prior failures.  And as mortifying as it is for the entrepreneur, no one else will feel the sense of failure that a founder does.
• Talk to some CEO’s that the VC has invested in in the past.  And don’t just call the CEOs that the VC suggests.  Review their portfolio and reach out to a cross-section.
• Think about the people across the table outside of the fundraising process.  If you think about them as if they are a co-founder, there’s a whole different set of expectations.  “Does this counterpart at the VC feel like they’re going to be my boss or they’re going to be my partner?”  It’s a really smart way of thinking about it and the best founder-investor teams are likely those that operate as a partnership and not like superiors and subordinates.

That will conclude this week’s tip and the episode.  Thanks again to Mark for his great insight on finding and converting investors.  Until next time…