8 Things Startups Should Know About Seeking Investment
For start-up companies, getting investment feels like a rite of passage. Some companies prefer bootstrapping, but inevitably a time will come when some sort of investment is needed for growth or expansion.
Vintage Cash Cow has recently gone through their first investment round. I was lucky enough to be there helping to make it a reality.
The co-founders and I had never done anything like this before. There were sleepless nights, really long hours, arguments, print out after print out, draft after draft after draft – you name it we went through it.
I want to save you the hassle of those many sleepless nights. I also want to save you the pain of getting to that 12th draft and realising you have to start all over again. Yes really! So I’ve put together this list of tips to make your investment experience smoother than ours!
1. Don’t listen to what other people tell you to put in your pitch deck
I read a lot. I do a lot of research. The first thing I did when we talked about building our pitch deck was hit the books and business articles. The only problem was: everyone had different ideas about what the perfect pitch deck should look like.
Don’t limit yourself to producing a short deck. Build a really comprehensive deck, include everything and anything a potential investor wants to see. Once you’ve done this you can pick out certain sections and slides to create smaller custom decks tailored to your audience. You’ll end up being able to produce a number of decks for different situations with minimal effort, because all the hard work has already been done. You can thank me later!
2. Don’t underestimate the time involved
You have probably encountered LinkedIn slideshare? You can browse some great pitch deck examples there. They look quite simple. Only a few slides… Don’t fall into this trap!
Remember I said about building a really comprehensive deck. That takes time.
Do not underestimate the amount of revisions, printouts, suggestions etc you will go through in pursuit of the perfect deck. Plan your time and plan it well.
3. Practice Public Speaking
I’m not really shy when it comes to speaking in front of people. A lifetime in marketing and project management has beaten all the shyness out of me. The co-founders are the same. In fact one of them is most comfortable when he’s chatting to a group of people who want to know what he does. However, not everyone is lucky like us. Remember once you’ve built your deck you will have to spend some time presenting it. Practice regularly until you feel comfortable and your pitch will go a lot smoother. I highly recommend reading Oren Klaff’s book ‘Pitch Anything’ before you build and present your deck.
4. Have a plan in mind early on
Know how much money you want, why you want it and what terms you want it on. While we were putting the pitch deck together we changed our minds on this a lot. We had a rough figure in mind but there were so many opportunities in front of us we just weren’t settled on exactly which way we wanted to go. This made some of our early investor meetings a bit disjointed. Have a plan before you go in and stick to it.
5. Talk to your investors
This sounds obvious but there are rules and etiquettes to follow. Remember investors are human too! Before your meeting ask the investors what they are expecting to see. What kind of paperwork should you take with you? Are there any elements of the pitch they would like you to expand on? There is never any harm in asking the question and preparing yourself.
6. Not everyone will like your idea
Not everyone will love your idea and not everyone will want to invest. Don’t take it to heart. These are great people to seek feedback from to improve your business and your concept. Make sure you listen to any feedback you get and act on it sooner rather than later.
7. Talk about the future
I’m not encouraging you to buy a headscarf and a crystal ball but you need to have a strategic vision in place. Investors will want to know there are opportunities for your business to expand in your marketplace. They will expect you to have an exit plan and processes in place that mitigate risks to the business. Forecasts and financials both current and projected are often asked for. We had a lot of this in place but there were things we hadn’t considered. Do your homework and your experience will be a lot smoother.
8. Get your affairs in order
We didn’t think meetings would kick off as soon after the pitch as they did. We had a lot of documents ready but there were a lot of late nights and last minute scramblings to pull together some bits we had overlooked. Make sure you have all this in place before you even start pitching. Doing this alongside your pitch deck might even help you to create a more well rounded presentation.
So there you have it – 8 lessons you should learn from me when it comes to investment. Perhaps the best piece of parting advice I can give you is this: hire a designer. While we had the ability to design it ourselves the designer bought a much needed breath of fresh air into the mix. By the time we got him on board we had been through the deck so many times it was starting to lose all meaning. A fresh pair of eyes at that stage really helped to keep us going.
Good luck and get pitching!