Fundraising AMA with Techstars MD.
Source: Martin Olczyk, MD at Techstars
If you’re an early-stage founder and raising a Pre-seed/Seed round, here is a summary of what you need to know.
Fundraising is a tool - not a target.
Focus on a real problem and work on a solution.
Deliver a better customer experience than your competitors.
Know why you're raising funds and start early, ideally 6-12 months before you plan to close the round.
Once a CEO starts fundraising, it becomes a full-time job. Be aware of this and prepare your team for it!
Have your "data room" ready before you start raising. Include Deck, financial model/statements, investor pipeline/CRM, email templates, etc.
Invest time in your pitch deck.
Tell a (unique) story
Invest in a great design (not a copy+paste template)
Do not overload it - limit it to 12 slides max.
Remember, the goal of a pitch deck is to get a first meeting with the investors.
Need a compelling pitch deck to help you get funded? Click here.
The deck only opens doors - but VCs invest in you and your vision, so prepare/rehearse your meetings well in advance.
Never lie to investors. Never!
Know your numbers well. You should be able to clearly articulate your market size, financials and show how you plan to use the funds you raise.
You’ll need a financial model, even if you’re early-stage.
It’s about having clear assumptions to quantify and validate your business plan.
Don't share it with VCs - discuss it in a meeting!
Set a minimum funding target.
Identify your minimum financial need.
Let the market push your round size.
You build your company for you, not for your investors.
Don’t be discouraged if they tell you NO!
VCs are often wrong, and many have missed unicorns at the Pre-seed/seed levels.
Listen and try to understand why they say "no".
Every "no" is one step closer to a "yes."
Know your CapTable and model a future fundraising strategy (your financial model will help with this!).
Never talk about your Exit nor waste a slide in your pitch deck.
Let the market decide about your valuation, find the optimal, not the highest valuation - it will make future fundraising easier.
Your network is your net worth, so build it early, even before you need it, and leverage it when you do.
Investors invest in lines, not dots. Make sure they have all the relevant information.
Don't be discouraged by bad market news. There's a lot of capital available, and great startups are still raising.
Run a strict process, learn from feedback, iterate, and don't give up.
No deal is often better than a bad deal. It’s a numbers game, you need to increase your funnel and meet many investors before you find 2-3 who will give you a term sheet.
Create urgency to close the round, or it may never happen.