Our latest live panel of expert investors has done it again. This time our co-founders Swapnil and Snehal Shinde (also General Partners at Twin Ventures) exchanged advice on bear market fundraising strategies with early-stage investors from Saama Capital, Elevation Capital, and Convoi Ventures — and they did not disappoint!
We know solid guidance on fundraising during an economic downturn can be tough to come by, so we compiled the top insights gleaned from the discussion. From preparing a proper deck to presenting investors with a story that resonates, these tips are relevant regardless of the current state of the market.
5 Tips For Fundraising In A Recession
1. Your Team Matters
Viable products are a dime a dozen. Whether working with angel investors or entering your Series B, investors want to see a team dedicated to a universal goal. Talent determines whether your company will be able to drive sales, achieve customer loyalty, and work together to solve problems.
Dedicate part of your pitch to your team, and don’t bury this slide at the end; you’re selling an idea, but investors are equally invested in the idea and the team. Let investors know what your team contributes and how they’re a vital part of the puzzle.
2. Leverage The Power Of Storytelling
Telling the story behind your product is incredibly powerful and important; this is how you'll connect with and resonate with potential customers as well.
Start by emphasizing the reason behind your product or service and the problem it solves. Consumers primarily purchase to solve a problem in their lives. Anyone in sales or marketing can tell you this from first-hand experience through the ages — from the first automatic dishwasher to the newest iPhone, this premise has not changed over time.
As you continue to paint a picture for your investors, add your personal experience to the story and how that helped you build your product. Your story should evoke emotion; hearing why you're dedicating your life to solving this problem should help an investor understand the problem and get behind you and your vision for the solution.
3. Don’t Info Dump
Stick to the most important details or facts:
- Who is the customer
- What are their problems or pain points
- What is the solution
- How is your product or service a part of the solution
Also, consider what is happening in the market and strategies to attract or retain customers during a recession or otherwise.
Following this simple outline will leave room for investors to ask questions. If you’re running too long and not giving an investor breathing room, there’s a high chance you’ll lose them before you finish.
4. Fundraising Isn’t Just A Moment
Founders often treat fundraising as a singular moment until the next round is needed, but think about building long-term relationships when you are seeking funding. You never know when a relationship built could benefit you down the road, so network, keep in touch, and continue the conversation beyond initial pitches.
For example, some investors may prefer investing in a startup at Series C rather than your pre-seed startup; that initial “no” isn’t always a sign of ending the relationship. They might be waiting for your company to hit a specific goal, or they may not currently have the bandwidth. If an investor is interested in the company as a whole, that isn’t going to change.
5. Know Your Customers
Founders are looking to solve a problem, but what your target consumer is looking for is most important. Investors need to see founders that look beyond the first layer of consumer demand. Showing investors you’ve dedicated a large portion of time to researching potential customers proves you are thinking beyond just revenue goals.
Consider these questions when trying to think like your core customer:
- How would your customer evaluate your product or service as of now?
- Why would your customer choose you over your competitors?
For more fundraising tips from our last panel event, see also: How To Raise Venture Capital: Top Advice For Successful Fundraising
Prepare For Pitching Investors With Zeni
We hold these events because we want startups to succeed. After all, we’ve been in your shoes and know it's nerve-racking to stand up in front of investors and pitch something close to your heart.
One part of pitching that we have not mentioned yet is showing investors that you have some understanding of your business’s finances. Before investing, investors need to see your company’s financial health and how efficiently you manage the business.
Zeni exists to give startup founders access to reliable, affordable, real-time bookkeeping services. But we also love helping founders better organize their financials to prepare for fundraising at any stage. Zeni offers a full suite of CFO Services as part of our CFO Plan, which includes:
- Financial Planning & Analysis (FP&A), including scenario modeling and cash flow projection
- Budgeting and tracking (compare actuals vs. planned)
- Monthly business review of KPIs (e.g., ARR, CAC, LTV, Net Retention, EBITDA)
- Board or pitch deck guidance
- Due diligence and fundraising preparation
Book a demo below to see how Zeni’s finance services can support your startup’s growth and fundraising goals.