Gone are the days when building a company meant one of two things. Either bootstrapping or going to find a VC to back you. There are so many other ways to get started that thinking about what kind of capital you even need should be your first challenge.

What to think about before fundraising?

Do you need the money?

What does VC money entail?

Is VC money for you?

What are other possibilities to get capital?

How much money you want to raise and why?

Before starting to reach out to investors to pitch, you should understand what kind on knowledge, in addition to money, you need. Map out your needs and match the investor to those fields. e.g. sales acumen, network in a specific geography etc.

Investors

  1. Finding the investors
    1. Do due diligence on the investors (after the call) by getting in touch with their other portfolio companies
    2. Get active in the community
    3. Find at least 2 warm leads for each investor
  2. Managing the list. I recommend using a CRM. These are the details to know before reaching out:
    1. Name of a person (you’re reaching out to a person, not a company)
    2. Company
    3. Why they are a good match for you?
    4. Check sizes
    5. Do they lead?
    6. What added value will they bring to your company
    7. Size of the fund (understand how much skin is in the game)
  3. Reach out
    1. Never mass email - you want to build a relationship with the person
    2. Have a Calendly link included
    3. Send your deck in advance with the question: “what slide do you want me to prepare for the meeting”

Quite elaborate example of a fundraising sheet:

https://airtable.com/shrcSXIeXToKZoZCG

Documents to prepare:

  1. Documents in the data room

    1. Pitch deck
    2. One-pager
    3. Demo
    4. Cap table
    5. Financial model
    6. Sales and marketing plan
    7. Investor pipeline
    8. Executive summary
    9. Business plan
    10. Product analysis and data
    11. Traction
    12. Pitch texts in various lengths to pass on to potential customers / investors

  2. Pitch deck

    1. See this article

  3. Tips

    1. It’s a relationship game - know who you’re talking to
    2. Don’t ask for an NDA
    3. If you promise to do something - do it.
    4. Don’t lie (e.g. about an investor being in your round when they didn’t commit)
    5. If you’re raising series A, make sure to talk to all investors with a very short interval, so the deal wouldn’t be “shopped”. You need to have all your documents in order before starting the talks. Don’t rush it. If 20 VC’s pass on you, it’ll get increasingly harder to get a yes from the next ones.
    6. Start with a smaller round size and increase - not the other way around.