WHAT YOU NEED TO KNOW BEFORE APPROACHING INVESTORS (Angels or VC’s) & RAISING CAPITAL
If you haven’t already put together a pitch deck you can check out these posts to help you out: Build Pitch Decks Investors will Love, Top 5 Mistakes in Pitch Decks, and make sure you know your numbers and key KPI’s, they will ask you.
Prepare and practice your pitch, so that it comes off the tongue with ease and clarity. If you don’t it will be obvious, and you can’t improvise with this one.
Remember investors are looking for a return on their money, so that means an exit, such as an acquisition or IPO, so keep this in mind. Investors love large addressable markets, basically the bigger the problem, and the more frequent the problem the better.
Investors are always on the look out for startups with traction, so you don’t necessarily need to scout for investors, they might come to you. But you can always reach out via LinkedIn, but your message might get drowned out, amongst the hundreds of others, so ideally, you would get an introduction from a mutual connection. Join an incubator or accelerator program, this will give you more credibility and they often have demo days, where you will be introduced to investors. The hottest one is YCombinator, but there are so many more, and local ones near you.
When doing cold call messages or emails, give them a teaser about what you do, the problem and solution, and that you are looking to raise, and offer to meet or call should they be interested. They’ll typically ask for the pitch deck, and/or arrange a meeting/call. But if they don’t, give a gentle nudge and follow up, sometimes things get overlooked and forgotten.
But before you send out the pitch deck, make sure it is up to date, and once you get a meeting or call, make sure you’re prepared to answer questions.
Investors are looking for reasons to invest in you, so make sure you give it to them.