There is an investor at every company stage. If you are the CEO, it’s your job to find and secure meetings with the right investors for your market, stage, and business model.
Extensive and insightful article on how to find the right investor.
Raising capital for your start-up is a more than selling an equity ownership in your company.
What you are selling is trust & confidence that you’re going to build something of great valuable and that you’re going to be enjoyable to work with over the coming decade of each other’s lives.
Increase your odds of closing a deal by understanding how VC firms make decisions. Great article by entrepreneur-turned-VC Mark Suster.
You have spent months preparing meticulously for that crucial pitch to investors. The problem you are addressing is huge, your solution super-compelling, your pitch-deck stellar. And yet investors remain skeptical…
What is going on?
No matter how great your idea is, your most formidable obstacle is prospects’ adherence to the status quo. It’s that voice inside people’s heads that goes, We’ve gotten along just fine without it, and we’ll always be fine without it.
How can you help your audience overcome their resistance to change? One effective approach is to focus not so much on the “why” the world needs your idea, but why it needs it NOW. Find your “why now” and add credibility and urgency to your strategic story.
Great insights on successful pitching by strategic storyteller Andy Raskin.
Every startup needs at least one home run, one thing that will capture the audience almost instantly. And that is not necessarily your product. An amazing traction could be your home run. Perhaps your stellar team. Or maybe it is an investor or a board member you were able to recruit to your mission.
Before going to market or raising capital, sit, alone or with your team and ask yourselves “What is our home run?”.
Read the whole article for another great piece of advice.
Think of your investor pitch like a James Bond movie.
Everyone who watches Bond loves the opening sequence, before the titles come on: there is suspense, action, amazing stunts. Those first 5 minutes truly bring home why you love Bond, and that keeps you going through the next 2 hours of nonsensical plot twists.
In the same way, you need to convey the main reasons why an investor should love your business in the first 5 minutes of your presentation. Read here some great advice from the legendary team of Sequoia Capital.
Read more on pitching to investors.
Have you ever left a pitch and wondered what investors really thought about you?
According to a survey, nothing makes investors lose their interest faster than entrepreneurs who cannot clearly explain their business model, financials or metrics (the Financially Challenged).
But there are more aspects that are major turn-offs for investors. Like the inability to communicate effectively (the Ramblers); reacting defensively and being unwilling to accept feedback (the Know-It-Alls), or being too emotional or “salesy” (the Drama Queens). Here are the top 8 things that make investors cringe.
Read more about pitching to investors.
Pitching your business to VCs is much harder if you are a woman. A growing body of evidence shows that female entrepreneurs in all lines of business receive significantly less funding than their male counterparts (1, 2, 3). A recent article (4) discusses where the bias may start and what you can do about it.
Some key insights from the study:
- VCs tended to ask women questions about the potential for losses – men about the potential for gains. Interestingly, both men and women who evaluate startups appeared to display the same bias in their questioning,
- Most entrepreneurs responded in a manner that matched the type of questions they were asked, namely focusing on safety, responsibility, and security – as opposed to hopes, achievements, and ideals).
- Responding in kind to these questions, female entrepreneurs penalized their start-ups by remaining in the realm of losses.
The good news: you can learn to recognize this pattern and frame your responses to benefit your startup.
“When it comes to venture funding, entrepreneurs need to convince prospective investors of their startups’ “home run” potential — it’s not enough to simply demonstrate that they’re unlikely to lose investors’ money.”
Read more on business pitches
- Malin Malmstrom, Jeaneth Johansson, Joakim Wincent; HBR, May 17, 2017.
- Kimberly Weisul; INC. Magazine, November 2016.
- Katherine Hays; Knowledge@Wharton, May 2016.
- Dana Kanze, Laura Huang, Mark A. Conley, E. Tory Higgins; HBR, June 27, 2017.
Pitching to investors? 3 critical things you need to pay attention to:
- Start by stating clearly what you are about—investors are an impatient bunch!
- Deal with the elephant in the room early in your pitch—and there is always an elephant in the room.
- Use slides that truly say what you want to say—no need to use all the 87 slides of your corporate deck.
Very insightful article by former McKinsey consultant and presentation designer Jan Schultink.
Read more on business presentations.
Want to learn what a successful pitch looks like? Wharton professor Adam Grant has 3 great tips for us:
1. Spell out the Problem, Not Just the Solution.
Before people will believe that your idea will make the world better, you have to explain what’s wrong with the world right now.
2. Involve the Audience
Great entrepreneurs don’t lecture, they involve in a dialogue.
3. Acknowledge Your Limitations
If you are willing to speak openly about the downsides of your business, it must have some pretty substantial upsides.
As the author says, “The world doesn’t suffer from a shortage of great ideas. It suffers from a shortage of knowledge about how to communicate them.”
Read his complete blog.