Even serial entrepreneurs may find the process of funding a startup challenging. We asked nine seasoned leaders in DC tech how they successfully approach and pitch investors:
Adapted from sage advice from classmate and co-founder of DocSend: Don’t drag it out! Schedule as many meetings as you can within a very limited time frame, and hit everyone in row. You just need to find a couple that believe in you, and once they are on board, the rest will follow. It’s momentum based, and you risk losing momentum with time. Plus, and not to be understated, you can get back to building your business quicker.
Ajay Kori / @ajkori / Co-founder, UrbanStems
“The best way to raise capital is to know what you want and run a process. When we were raising capital, we were looking for a true partner (long-term financial partner, strong contribution to our problem space, and operational expertise). We ran a process to efficiently vet venture partners and firms that matched that criteria and that we think we could work well with. Raising money is a financial marriage and it’s important that you get it right.”
Tim Hwang / @timthwang / CEO, FiscalNote
“Most pitches have the essential content, but delivery is what sets a great pitch apart. Whether you’re raising a seed round or exploring exit opportunities, aim to accomplish three things:
1) Captivate: You have about 30 seconds before investors start tuning you out. Start strong, tell a story, and stay engaging.
2) Establish Credibility: Cover the basics but avoid too much detail. Save it for Q&A. You want to convey authority, trust, and awe(some). Clearly state your request but do not sound needy.
3) Make the Chase: The very best pitches create a fear of missing out. You’ll know you’ve done a great job if investors are pitching you to take their money.
Finally, for first time entrepreneurs, start with people you know and warm intros. Never, ever pay to pitch.”
Laura Kennedy / @LKjams / Head of Business & Corporate Development, LivingSocial
“Make your business personal for your prospective investors. Research and help each investor see how his or her unique background makes her a good fit for your company. This will not only give prospects the sense of confidence and passion to invest financially, those investors will also become better resources for the guidance, introductions, and advocacy you’ll need to build your business!”
Manpreet Singh / @msinghcfa / President, TalkLocal
“For founders seeking capital and strategic advisors, I typically propose a win-win scenario where the founders raise a small advisory round prior to a seed round. Angels who also add value could invest (smaller amounts usually < $50K) in an advisory round which allows the founder to leverage their well respected new investors to “build the herd” (investors invest in a herd mentality) and it provides the advisors an opportunity to get involved at a discounted value to the seed round. Those advisors that invest might also earn equity that vests based on their agreed upon objectives in an advisory role.”
Jonathon Perrelli / @perrelli / Co-Founder & CEO, LifeFuels / Managing Director, Fortify Ventures
“In my experience, investors are most interested in 3 things: the industry/addressable market size, the team leading the charge, and then the idea. When crafting your pitch, paint a picture that starts by describing the problem you are hoping to address. Then describe how large the problem is, correlating it with the market potential to crystalize the opportunity. Finally, outline your solution and why you have the best team to execute and deliver. This is not the time to be modest.”
Joel Holland / @joelkentholland / Founder and CEO, VideoBlocks
“Focus on reaching out to investors that you are confident will be a value add. It is true that “dumb” money is far easier than raising “smart” money but those investors that will be able to open their networks in the space you are in as well as introduce you to other strategic investors will prove to be invaluable. At the end of the day, it’s all about people and how aligned they are with what you are ultimately trying to accomplish.”
Caroline Pugh / @Caroline_Pugh / Co-Founder & COO, VirtualU
“First, know your audience. Do they do deals at your stage and in your space/like companies. Next, be sure to have progress not just an idea. Folks like to back execution oriented people that have momentum. Be prepared for the diligence that comes from serious investors.”
Ric Fleisher / @rfleisher / Co-founder and SVP, Urgent.ly
“When you pitch investors, above all, let your passion show. They aren’t investing in the idea alone. They are investing in your ability to focus and execute on it – which requires a level of commitment that they must be able to feel. Also, though perhaps counter-intuitive, while presenting the upside, also present the challenges you face and how you’d address those challenges. Every idea, however good, also has obstacles. Investors want to feel confident you have a plan to tackle those obstacles.”
Michael Chasen / @michaelchasen / Founder & CEO, SocialRadar