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By Nathan Beckord
You’re not selling the product to the investor, you’re selling the opportunity.
You need to raise capital for your startup. It’s something you can do on your own, but what if someone could show you the ropes and boost you up?
Eva Dobrzanska is the go-to expert for adding that extra oomph to your raise. She’s a seasoned professional in the field, well-known to founders seeking venture capital funding. Whether it’s providing ad hoc guidance or sourcing deals for Block Dojo’s blockchain startup accelerator, Eva Dobrzanska walks founders through every step of the investment process.
Her expertise covers a wide spectrum; she advises founders on equity fundraising strategies, investor outreach, and targeting, scaling a business and expanding internationally, and accessing the right funding. Notably, her popular “Capital Raising Mind Map” recently went viral on LinkedIn.
In this article, Eva shares exactly how she likes to communicate with investors—plus how having an alternate pitch deck can be just as important as the main deck.
The best way to communicate with investors
Cold calling and cold emailing can be daunting, but not necessarily effective. However, warm intros aren’t always possible. What’s a founder to do? With plenty of practice in the art of engaging investors, Eva offers up some tips for how she likes to communicate with investors to get results.
Create urgency
“I always tell founders that in fundraising, they have to be able to create the feeling that ‘the train is leaving the station,’” Eva shares. This means cultivating a bit of FOMO by highlighting your startup’s upcoming launches and other news. If the next quarter will be big for the company, talk about why. Also helpful: any tidbits on why your company presents a hot opportunity for a limited time.
With that, she encourages follow-up anytime a new milestone is achieved. She gives the example of opening a new distribution channel—the kind of deal that increases a startup’s revenue potential. Often, an investor who’s been loosely following your progress will bite after seeing that your success is climbing.
Do your homework
Look sharp from the jump by showing investors that you know about them. Yes, this does require some legwork, but it’s time well spent.
“You should know the most recent investment they made. If you’re a sustainable fintech business and you are reaching out to a VC who just made an investment in a sustainable fintech business, chances are they’re not going to go ahead with you. They already invested in your competitor,” Eva says.
However, you can look for investments in businesses that are adjacent to yours as representing an opportunity to put your foot in the door. Even if you’re not raising at that moment, it’s a good time to introduce yourself and share how you might work well with that company in the future.
“If you can spot a way that you could help this company, or maybe your products are complementary, or maybe you could become partners in the future . . . that’s what you should say in the follow-up email,” says Eva. She recommends writing something like: I saw you invested in this company. We are building a similar product that could open up a new delivery channel for them.
This strategy shows that you’ve done your research and you know what’s happening for the VC.
Stay visible
There’s no easy way to do this one, but Eva promises that it’s important. Maintain a solid online presence if you’re looking for an investment (or plan to do so in the future). That means having a good website and active accounts on whatever social media channels are most popular in your industry. Establish yourself as an authority, whether that’s on LinkedIn, Twitter, or Reddit.
Keep a personal touch
Eva doesn’t believe in automated communication with investors. Even if messages are disguised to sound personal, investors can usually tell what’s automatic and what’s truly customized for them. Yes, writing individual messages takes longer, but it also creates more authentic relationships.
And while you’re being personal, don’t communicate in a stodgy and buttoned-up way if the investor doesn’t. “I always try and match the tone,” she says.
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Pitching for success
A typical investor spends three minutes and 44 seconds looking at a pitch deck. Sound short? That’s because it is. With so little time to make an impression, it’s important to hit the high notes first. Include only three key points per slide, with no more than 10 slides.
Eva has a few more tips to make your pitch deck shine:
Prepare a secondary deck for the conversation
Eva advises that founders not read from their pitch decks when they get coveted meetings with investors. Most investors will likely breeze through the pitch deck you send ahead of time.
Instead, consider each meeting more of a discussion than a presentation. Create a second pitch deck to guide that conversation. Include details like your current progress with the company and any news updates. This allows the investor to dig deeper before diving into due diligence.
Don’t give too much product detail
We know: Your tech is cool. Your cool tech got you a meeting. And yes, you should explain the basics of your product, but keep it brief.
What’s more important is the opportunity at hand. A pitch deck is not the same thing as a sales deck. You’re not selling the product to the investor. You’re selling the opportunity.
Metrics
Eva always likes to see a company’s margins. If it’s a SaaS company, she wants more than the user count. While a high total user count is impressive, investors are really more interested in the number of active users.
Make connections with investors
Eva has one simple way to sum up all of her advice for founders: “Put yourself out there,” she says. She encourages founders to attend events with other founders, like pitch nights and tech meetups. If geography is a limitation, she also recommends having a X (formerly known as Twitter) presence and using Slack channels for founders, like Gen Z VCs.
Every way you can connect with others in your innovation community before you start to raise will help you in the long run.
Article is based on an interview between Nathan Beckord and Eva Dobrzanska on an episode of Foundersuite’s How I Raised It podcast.
About the Author
Nathan Beckord is the CEO of Foundersuite.com, which makes software for startups raising capital. Nathan is also the CEO of Fundingstack.com, which is a new platform for VCs and investment bankers to both raise capital and assist clients and portfolio companies. Users of these platforms have raised over $9.7 billion since 2016.
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