Now your fundraise is in full swing, your job is to generate momentum, and the best way to generate momentum is to have a lot of meetings. Every day, every week, until you get multiple commitments from the investors.
Step 1: Start by soft pitch your business, test water, get advice, fix and update your pitch deck.
Rather than approaching prospective investors for money immediately, many startups start off with the soft pitch. The purpose is to create a substantial waiting list of investors before opening the round. (more demand vs supply).
During the soft pitch phase, you test the waters by taking meetings with investors informally, or for “advice” - using those meetings to gauge interest. (You may also take the opportunity to optimize your pitch deck based on their insights.)
If interest is low, you may decide to hold off and go back when the company is further along. And because you never announced that you were raising, you avoided looking like you failed.
If initial feedback is positive, you’ll be ready to start publicly discussing a raise over email and in meetings. Begin to speak publicly about the fact that you are fundraising, and start the timer on your fundraise.
What to Cover In the Meeting
In the meeting, you can go through your company slide presentation to let the prospect know the background and highlights of your company. If the meeting was set up specifically as an investor presentation (and not an informational meetup), then you can include the slides discussing how much money your company is seeking, the financial forecasts and the exit strategy.
Having said that, however, the best pitch meetings are conversations, not presentations like those in the pitching events. Use your slides as backup and have an open conversation with the investors instead.
Your goals in the meeting are to develop rapport and create interest. It is very rare that you will get funded in the first meeting. So, focus on rapport and interest initially.
Download Capital2u Investor Presentation Template here
Post-Meeting To-Do List
After every investor discovery meeting or soft pitch:
Review feedback from the meeting.
Follow up on any requests made by the investor in your meeting.
Update your pitch deck with any improvements that can be made before your next meeting.
Update your investor pipeline with an updated status and any meeting notes.
Step 2: Once you have enough interest (10 to 20 investors), open your round, start pitching for money in 1 or 2 weeks.
The purpose of pitching to multiple investors simultaneously is to create a sense of urgency, momentum, and competition among potential investors.
By conducting meetings concurrently, investors become aware that you are in talks with multiple parties. This can generate a positive perception of your business, as it implies widespread interest and demand. The competitive atmosphere may also encourage investors to make decisions more promptly, fearing the possibility of missing out on a valuable opportunity.
Also, giving your pitch many times in a short period of time will help you hone it more quickly and give you confidence.
Your objective in the investor presentation is also not to get funded on the spot, or to present all the information needed to make an investment. Your focus at this point should be to deliver a compelling equity story, hit the investor's sweet spot, convince them to commit to next steps.
You want to leave them with an “I’m interested - let me see more” attitude, rather than an “I don’t get it—and I don’t want to invest more time” attitude. Then, make sure to follow-up with the prospect in order to secure them as an investor, mentor/advisor or fans.
Structure of Pitch Presentation
Your presentation should include answers to the following 10 questions, preferably, in 20 to 30 minutes without rushing:
What does your company do?
What is the status of your company?
What are the key points that make your company unique?
What pain does your solution solve?
In what market(s) are you competing?
How do you generate revenues?
Who is your competition?
Who is on your management team?
What is your timeline/roll-out plan/milestones?
How much capital are you seeking?
The key here is to keep it brief. VCs sit through lots of meetings and if the information you present is too dense they may not follow it.
Likewise, the goal of the meeting is to create more interest in your company; not close the deal. As such, you don’t have to divulge every single detail about your company.
Some VCs will let you run through the presentation uninterrupted; some will stop you throughout with questions. Be flexible and adapt to either style.
You’ll have the best chance of getting a second meeting if:
You managed to validate your sector i.e. there is a market for your solution.
You managed to sell yourself as the person that can build and lead a team to the next level.
You convince the investor that your team can deliver a competitive solution to a large growing market.
Step 3: Follow up and keep the momentum going.
The meeting has now ended. You have a good feeling about investor reaction to your presentation. They expressed interest in following up and have asked for additional information, which you believe is an indication that they wish to continue their discussions with you.
What happens next?
Your high-level objectives are to accomplish the following:
Take steps to continue and further increase interactions with the investor.
Build interest through periodic sharing of positive information about your company (e.g., new customers, product enhancements, new hires, important customer feedback, etc.).
Work toward setting up follow-on face-to-face calls or meetings to allow deeper analysis of your business opportunity.
You want to keep momentum going when the heat is on.
Now, even with the best pitch presentation, be prepared to get turned down by investors or not hear back. Stay cool, and just politely check in from time to time. Keep it simple and professional.
Send a follow-up email if you haven't heard anything after a week. After that, continue following up if and when you have something to share (e.g. a product launch, key metric that you hit, commitment from a notable investor etc). The same goes for investors you've met but haven't heard from thereafter.
Best Practices for Following Up:
Always press for follow-up meetings. Additional face-to-face meetings are the best means of obtaining an investment—or in learning why there is no interest to invest. Don’t stop communicating until you receive a hard “not interested.”
Weekly updates strike the right balance. Tailor your approach based on established dialogues. Avoid inundating investors; balance persistence with respect for their time.
Maintain a Positive Tone:
Keep your messages lighthearted and friendly, avoiding any signs of frustration. Position your persistence as a testament to your dedication and belief in your solution.
Use Multiple Communication Channels:
View investor interactions as part of a strategic network-building process. Connect with them on professional platforms like LinkedIn to foster long-term relationships. Attend mutual events to re-engage, update on successes, and enhance your credibility over time.
Graceful Exit after Rejection:
Upon a clear rejection, express gratitude and seek referrals for potential alternative investors. Respectfully move on, recognizing that each interaction contributes to building a broader network.
Sample Follow Up Email
Subject: Follow-Up on [Your Company Name] Pitch Presentation
Dear [Investor's Name],
I hope this message finds you well. I wanted to express my gratitude for the opportunity to present [Your Company Name] to you during our recent meeting. It was a pleasure discussing our vision for [briefly mention key points discussed].
I understand that your schedule is undoubtedly busy, and I appreciate the time you dedicated to learning more about our company. Following our presentation, I wanted to provide additional information that might be helpful in your evaluation process.
[Include any relevant updates or developments since the presentation, such as partnerships, achievements, or notable milestones.]
I would be delighted to address any questions or concerns you may have. Additionally, I am open to scheduling another meeting at your convenience to delve deeper into specific aspects of our business.
Thank you once again for considering [Your Company Name]. I look forward to the possibility of working together and appreciate your time and consideration.
[Your Full Name]
[Your Contact Information]