Essential tips on securing a successful round of fundraising from VC’s
Fundraising has never been an easy task, but yet it is usually one of the most crucial things that startups need to do in order to quickly scale their businesses to the next level and many are still wondering how to do it successfully.
Now with a lot more VC-fund available in the region compared to a decade ago, there never was a better time to fundraise with VC than today.
Therefore, here are some essential tips that you should consider when you’re fundraising with VC:
Invest enough time with your pitch deck
Pitch deck is essentially the CV of your company and it is almost definitely going to be the first thing that VC will ask to you if you want to be considered by them.
Also Read: How to write a PR pitch for your white paper
However, there have been many occasions where startup founders have put 30+ irrelevant slides in their deck which certainly does not increase their chances of being considered.
Hence, you should always keep your deck concise from 10-13 slides which include the following – name and purpose, the team, the problems, your solution, the market size, the competition, the product and it’s a roadmap, the monetization model and the tractions.
Carefully identify all of the potential investors
Identifying and picking the right investors to be your partners is very important and you should never blindly send out your decks to all VC’s without taking your time to learn about them one-by-one.
The reason being that some VC’s may already have existing portfolios that have a similar business model and target market like your startups and you certainly don’t want to give them any leverage of your company’s secrets to competitors.
Hence, allocate enough time to identify and list the VCs that you want to send your deck to by knowing their backgrounds, current portfolios, investment thesis, sector focus, the analyst’sand partners.
Know what you want to say in the first meeting
Great! So you’ve already sent your deck and you get a response from the analyst/associate to invite you for a meeting.
Your first meeting with the VC will be similar like any first dates and your only main goal is to make them more interested in your company.
In order to do that well, you should prepare yourself with all critical and relevant data/information of your company and be prepared with all possible questions that will be asked.
Also Read: Pro pitch deck tips for beginners
Lastly, be passionate and sincere while talking about your company but never try to oversell.
Due diligence process
If you made it to the VC’s due diligence (DD) process, it means you’ve already made a significant milestone in your fundraising process.
DD process can take some time and the only thing you should do is to be patient and always give accurate answers for all detailed questions that will be asked by the VC.
If you think the DD process has taken too long, always be courteous in following-up with the VC and never put any pressure on them to rush the process.
The final process
Once the VC complete their DD process, it is usually going to be their final decision (either yes or no). If they say YES, congratulations!
All you need to do is wait until they give you the term sheet and pay careful attention with all of the terms and clauses.
But if you get a NO, try to request another meetup with the VC to ask for their feedback on why they decided to not proceed further with your startup and what other things you can improve.
It is also okay to ask them for any referrals but always does it in a polite manner and always ask it for no more than once.
Also Read: What you need to know before taking Venture (or Vulture?) Capital
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