Demo Day at TechStars Seattle took place a week ago, and the teams worked hard to get their pitches ready for a group of prospective investors. Demo Day was just the first step. The pace of courting and closing investors will be super fast.
Here are seven tips I gave the teams to prepare for an effective and quick fundraising.
- Create a Dropbox with all of your materials. As you get solid investor interest, create a copy of the folder and share it with prospective investors.
- Powerpoint of your short (6 mins) and longer (60 minute) presentations (if you have a video pitch, include it as well)
- Product summary, features, roadmap. Get the investor excited about what you are building
- Team background – includes the team bios and social profiles. Help an investor get to know you better.
- List of current/previous investors, mentors, advisors and contact info – they want to know who else is supporting you.
- Customer/user testimonials/profiles – the voice of a customer is very powerful. Show photos, bio info, how they found out about you, how long they have been using the product…If the customers are open to being a reference, note that as well.
- Other supporting docs – this may include market reports, press mentions — anything that helps support your perspective on the market and/or size of the opportunity
- Funding docs – term sheets, closing docs…(ask your attorney) – once you get investor interest, you want them to have all the docs they need to review
- Develop company profile pages. You want to make sure users, investors, potential employees can find you easily.
- Develop a target investor list (Google Doc or spreadsheet). Fundraising is a sales process and you should have a solid list of prospects. The more focused you can be on who (best investors for your space, stage) and why (because you are like X where they made money before) they should invest, the better. Here is an example of a spreadsheet to get you started. Make notes in the spreadsheet or you can use some lightweight CRM tool like Yesware (built right into Gmail).
- Develop a kick-ass summary to be used for email introductions to potential investors. This is likely two to three paragraphs, like an elevator pitch, but should be really dense with market data, progress/traction, links to the site, team credibility…Your advisors will use this to make intros.
- Refine your “use of proceeds” pitch and supporting documents. How will you spend the money? How long will it last? What goals do you expect to achieve by the next time you will need to raise money? Most of your spend will likely be for people/headcount, so consider when and who you will hire and their impact on the burn-rate. If you have significant areas of additional spend (e.g. marketing) be as specific as possible about what and when you plan to spend. Investors want to know what they are “buying” into.
Mobilize your supporters (key influencers, investors, advisors) to promote and accelerate the momentum. Make it easy for them to take action. Ask them (via email) to:
- Follow, promote and share your social pages, especially Angel List. This will add credibility to your company and build awareness.
- Add data and ideas to your investor list.
- Make direct introductions to potential investors.
Bonus tip: Send regular updates to your “team.” As you close important investors — team members, advisors, etc. — keep the momentum going by keeping everyone informed. Good luck!
T.A. McCann is a Seattle entrepreneur and TechStars Seattle adviser who sold Gist to RIM. Follow on Twitter @tamccann.