Tomorrow is Demo Day at TechStars Seattle and the teams are readying their pitches for a group of prospective investors. Following Demo Day, the pace of courting and closing investors will be super fast. Here are 7 tips/actions I have been giving the teams to prepare for an effective and quick fundraising.
- Create a Dropbox with all of your materials. As you get solid investor interest, create a copy of the folder and share it with prospective investors.
- Powerpoint of your short (6 mins) and longer (60 minute) presentations (if you have a video pitch, include it as well)
- Product summary, features, roadmap… get the investor excited about what you are building
- Team background – includes the team bios and social profiles…help an investor get to know you better
- List of current/previous investors, mentors, advisors and contact info – they want to know who else is supporting you
- Customer/User testimonials/profiles – the voice of a customer is very powerful. Show photos, bio info, how they found out about you, how long they have been using the product…If the customers are open to being a reference, note that as well
- Other supporting docs – this may include market reports, press mentions…anything that helps support your perspective on the market and/or size of the opportunity
- Funding docs – term sheets, closing docs…(ask your attorney) – once you get investor interest, you want them to have all the docs they need to review
- Create an FAQ (frequently asked questions) – most investors will ask the same questions, at least to start off, and you should create tight, formal answers to these questions. Have them in a doc so you can respond quickly (likely in email) when you get asked. Include data and specifics where you can. If you get the same question more than 3 times, create a solid answer and write it down.
- Develop company profile pages. You want to make sure users, investors, potential employees… can find you easily.
- Angel List
- If you have extra time;
- Facebook fan page
- LinkedIn company page
- Develop a target investor list (Gdoc, spreadsheet) – Fundraising is a sales process and you should have a solid list of prospects. The more focused you can be on who (best investors for your space, stage…) and why (because you are like X where they made money before) they should invest, the better. Here is an example spreadsheet to get you started. Make notes in the spreadsheet or you can use some lightweight CRM tool like Yesware (built right into Gmail).
- Develop a kick-ass summary to be used for email introductions to potential investors. This is likely 2-3 paragraphs, like an elevator pitch, but should be really dense with market data, progress/traction, links to the site, team credibility…Your advisors will use this to make intros.
- Refine your “use of proceeds” pitch and supporting documents. How will you spend the money? How long will it last? What goals do you expect to achieve by the next time you will need to raise money? Most of your spend will likely be for people/headcount, so consider when and who you will hire and their impact on the burn-rate. If you have significant areas of additional spend (e.g. marketing) be as specific as possible about what and when you plan to spend. Investors want to know what they are “buying” into.
- Mobilize your supporters (key influencers, investors, advisors…) to promote and accelerate the momentum. Make it easy for them to take action. Ask them (via email) to;
- Follow, Promote, Share… your social pages, especially Angel List. This will add credibility to your company and build awareness
- Add data and ideas to your Investor list
- Make direct introductions to potential investors
Bonus tip – send regular updates to your “team”. As you close important investors, team members, advisors…keep the momentum going by keeping everyone informed. Good luck!
Thanks T. A., as always great advice 🙂
Outstanding list! Wish I could be there!
Great advice….. Your directives seems to be a living, networked metamorphosis of business plans…. a much needed update!
Yup! Perfect advice.
Thanks for the advice! Validates a lot of what my team and I have been thinking about and also learned a few things. Very much appreciated!
I give founders who have never fund raised advice very similar to this all the time (and was actually just working on a blog post on this point). But this is a great, great summary TA. I think I can put my pen down. Thank you for writing it!
Glad you found it useful.
Thanks for a great list. How do you qualify “solid investor interest”? Do you suggest some type of formal authentication of interest in order to get into the dropbox account? What if investors create their own group dropbox apart from the BoD?
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