Startup funding: How to make investors love you
20th May 2019
It’s all well and good having a great deck. We talk a lot on this blog about how to blow investors socks off with your pitch deck – after all, it’s what we’re great at. But while having a great deck is fundamental to your success it’s just the beginning of your journey to securing startup funding.
In this article, we’ll identify some of the tactics our clients have successfully used, in addition to their pitch deck, to convince investors, attract their attention and successfully gain startup funding.
1. Get across your personality
You may have a great pitch with the numbers to back you up, but are you someone an investor can work with and believe in?
Investors tend to invest in people, not businesses. They know your idea and business model is likely to change as time goes on. So it’s important that you get across who you are when you pitch.
Stay away from heavily scripted pitches. Instead, treat each bullet point on each slide as a prompt, and expand on that point without notes. After all, it’s your business so you should know this stuff inside out. By staying away from notes, you’ll become much less robotic and come across much more naturally, giving investors a glimpse of the real you.
2. Practice makes perfect
Your deck looks great. It’s clear, concise and memorable. But if you stand there in front of investors awkwardly looking at your feet with a noticeable quiver in your voice – you’re not going to inspire confidence in you or your leadership.
So you’ll need to practice your pitch. You’ll need to practice it lots. This doesn’t include pitching in front of the mirror. Nor does it include pitching to friends and colleagues for that matter. Doing so is a waste of time and doesn’t simulate the real environment.
Instead, attend pitching competitions, arrange your own events with your network, pull together people you don’t know from your accelerator or office space and spend some time pitching to each other. Do whatever it takes, but practice your pitch hundreds of times.
Martin Luther King is said to have given his “I Have a Dream” speech over 1,000 times in churches up and down the US, before his famous TV broadcast. Already an experienced preacher, I very much doubt his first ever recital was anywhere near as impactful as his historic moment in front of millions.
3. Treat investors as equals
It’s easy for a startup founder to put investors on a pedestal and treat them as if they are some kind of higher being. After all, they have something you really, really want – cash money. And without them, your startup dream is dead in the water. However, you must remember that they’re just normal people, wanting to back an exciting startup and enjoy the successes it brings.
By treating an investor as an equal – another business mind as brilliant as yours – you don’t bring them down, you elevate yourself up. You’ll find yourself in a more influential position and lay the groundwork for building a real relationship.
Remember you have something they want – high returns on their capital. And only you can deliver them this. By approaching talks as an equal you come across more likeable and more business-like. It subconsciously tells the investor that you’re confident in your business plan and your idea, and that they’re lucky to have the opportunity to invest in you – rather than the other way around.
WARNING: It’s important to get the balance right – push it too far and you’ll not be seen in the investors’ eyes as an equal, rather you’ll be seen as arrogant and un-investable.
4. Meet investors and build relationships
What baffles us, is the number of startups looking for a quick intro to an investor hoping it will unlock the doors to instant cash. Or those who will simply fire off unsolicited emails to VC firms and Angel Networks, with no real thought or effort.
Yes, finding investors is tough – there is no quick fix. Ultimately, finding investors is much like any traditional B2B marketing strategy – where networking is king.
The startups we’ve worked with, who’ve had the biggest successes, are all pro-active networkers. They attended as many startup events as they can, they go to pitch events, meetups and expo’s – and they’ve been doing this long before they had a fully prepared business plan.
They don’t go expecting to find someone who’ll invest in their business, instead, they hope to meet someone awesome to build a friendship with. (Of course, they hope that in the future they’ll be able to leverage their network and be introduced to some investors or useful contacts.)
By going with the mindset of “finding people who I get on with and who may be able to help me” rather than the mindset of “finding someone to invest in me” you don’t come across as a chancer trying to find investment (trust us, they meet enough of these). Instead, you’re much more approachable, relaxed and genuine. It’s amazing how many doors this will open.
So put down your laptop, step away from LinkedIn and actually go out there, meet people and make friends.
5. Build a tribe of investors
This one is the ultimate approach. It’s the culmination of everything we’ve talked about so far. It builds excitement and creates a desire to invest in you and your business.
If you’ve taken on board points one to four. You’ll be a proactive networker, with a confident elevator pitch, who comes across as genuine and who people like. You’ll have built a network of potential investors and fans long before you need their money.
As you maintain these relationships over time, and you tell them of your successes and failures*, you can begin to drop into the conversation that you’ll be opening an investment round soon.
* Yes, failures. Remember you’re a genuine founder with ups and downs, not an overly rehearsed salesman in a blue suit with no personality.
Before long, you’ll have a queue of investors asking to be notified of when you open your round. The trick, however, is to keep saying soon for as long as you can get away with (without frustrating your network). While they’re waiting, send them an advanced copy of your deck, or investment prospectus, for their feedback (as you really value their opinion and would love their help in making your business case as strong as possible).
This achieves two things;
- You get vital feedback which may make the difference in you getting investment or not.
- Your network gets to finally see your deck, and if it lives up to the hype you’ve created, they will be even more desperate to invest.
Once you feel you have enough investors in your network who are excited by the prospect of investing in your business, you’re in a position to open your round – lining up a number of meetings and pitch events.
It’s this tactic, that partly led to our client Prosper BI closing their round and being offered nearly 50% more than they were asking for in just one pitch.
If you take just one thing away from this post, it should be that investors are human, they make decisions based on both fact and emotion – just like the rest of us. Every startup can provide an investor with the relevant facts. The ones that succeed are the ones that make investors feel a certain way about them and their business.