Finding the right investors is like dating — you need to kiss many frogs before you find a prince.
Today, I’m going to share seven ways fundraising founders can kiss fewer frogs and find more princes (subtle hint: Batch 19 applications are now open).
Habit 1 – Pitch to the Right Investors
Not all investors are created equal.
Some investors only invest in seed investments. Some investors only focus on Series A.
Before approaching any investors, do your homework and make sure you go after the right target audience.
You can segment them with these 5 characteristics:
- Investment stages (seed, Series A, B, C, etc.)
- Check size (e.g. $50,000 – $150,000)
- How many deals has he or she done in past 6 months (you will find out how active this investor is)
- Industry focus (if any)
- Geography (most Silicon Valley investors would not invest outside of the Bay Area)
It is certainly quite rare to turn someone who isn’t already engaged in your industry or geography into someone who suddenly cares about what you’ve created.
Habit 2 – Pitch with Purpose
My colleague Andrea Barrica introduced me to this quote by Maya Angelou:
“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
What do you want your potential investors walk away with after your pitch?
Keep that in mind and you very likely will change the story you tell and the way you tell it.
Habit 3 – Curate Your Story
It’s harder to tell a short than a long story.
It’s easy to tell your investors everything that’s happened in your life since you were 3, but whittling that down to what they really need to know is much harder — and much more compelling.
Don’t be lazy, or self-indulgent. Put in the extra 20% effort and curate only relevant and story that make you uniquely over qualify for your startup.
Habit 4 – Pitch like a Professional
During your pitch, you need to convey two things: 1) why you are the most qualified person and 2) why investors should give you money now.
Be sure to cover the following if you are ready, but always start with traction & demo if you have it.
Here are 11 things to cover:
- Traction, traction, traction
- User download
- User engagement
- Major signed partnerships
- Product demo (If you have it. You should have it.)
- Market size & target market
- Pain point
- Team (team, investors, advisors)
- Business model
- Monetization model
- Market Trends
Habit 5 – Understand the Big Picture
Most founders I met are in love with their product.
Unfortunately, as an investor, I don’t just want a person who is in love with himself or herself or their product.
I want a founder who truly understands how to create a business. You should be the one who can tell me everything about your competitors, market, legal environment or policy changes.
Habit 6 – 24 Hour Follow Up
After your first call or in person meeting, be sure to follow up within 24 hours and make sure to cover the following in your follow up email:
- Thank them!
- Your deck
- Current traction
- Action items
- Your ask
- Ask for follow up meetings or phone calls
Habit 7 – Show Passion & Honesty
Building a startup is really, really hard work.
As an investor, I want to find someone who won’t back down when things get (even) harder, and is willing to do whatever it takes to make things happen.
A huge part of working hard — and knowing where to work harder — is knowing what isn’t working (yet).
Show your true self, and be honest. It’s ok to say, “I don’t know.” You don’t need to have all the answers, but you do need to have the strength of character and work ethic to figure it out.