How To Raise Venture Capital: 4 Tips From Investors
Yesterday Zeni presented its first in-person event, “Raising Venture Capital: Setting Up for Success,” out of our offices in Lehi, Utah. Entrepreneurs and startup founders gathered to hear directly from startup investors and the Zeni co-founders, Swapnil and Snehal Shinde, on their experiences, strategies and best practices for startups raising venture capital funding.
The conversation abounded with invaluable fundraising advice — from identifying the right venture capital investors to preparing what they want to see and everything in between — but we managed to glean a few of the insights that resonated most with the audience. Whether you are in the early stages of development or already in the midst of raising money, these fundraising tips are top-of-the-line.
4 Tips To Raise Venture Capital For Startup Founders
1. You As A Person Matters As Much As Your Product
Especially for first-time startup founders without a track record, the way you present yourself to an investor carries as much weight, if not more, as your pitch. While what you’re building matters, investors also seek founders who hold themselves well, present with confidence and conviction and express passion and vision for what they are building. Without trying to over-impress, showing up genuinely and with energy goes a long way.
2. Focus On The Partner, Not The Fund
People underrate the chemistry, but just as investors look for a match with their founders beyond the product, founders should prioritize chemistry with the investor, not just the prominence of the venture capital firm or fundraising goals. Find a partner. If you don’t see yourself having a drink or dinner with that person, they are the wrong person. Like any personal relationship, you want a partnership that allows for constant, open communication — both in the good times and the tough times.
3. Keep Your Pitch Simple
One of the biggest mistakes that first-time founders and early stage startups make is with their pitch. Often inexperienced founders make their pitches too complex and feel the need to ramble off anything and everything on a slide, name drop or throw in all the hottest buzz words.
Instead, venture capitalists recommend keeping your pitch as simple as possible and focusing on telling a story, regardless of trends, about what you’re building and what your customers will find valuable. Additionally, read the room. Make eye contact, adjust to reactions, and authentically engage with those present.
Confidence and belief in your business and what you are disrupting go a long way, but your ideas may fall flat and hinder your ability to raise funds unless you can articulate that vision successfully. If only we could all be blessed with a silver tongue.
Often it simply comes down to practicing talking about your company. Practice with friends and family. Practice with your management team. Attend fundraising events. Constantly look for networking opportunities where you can share your 1-2 sentence elevator pitch and gauge reactions.
Another hot tip: Make a list of 15 funds to pitch and instead of starting at the top with your ideal first choice, begin at the bottom of your list. Contract and pitch your last five first. By the time you get to the top of your wish list, you have nailed your pitch.
Investors look for accurate financials during the pitching process. The better shape your financials are in and the easier you can present them shows investors that your operations are in order. Clean books also help move the fundraising process along more quickly and keep investors excited without delay. Overall, raising capital will be easier for both parties.
Zeni helps with this process by handling all your bookkeeping, accounting, and CFO needs, freeing you up to focus on approaching and pitching to potential investors. Zeni ensures your accounts are up-to-date, GAAP-compliant, and ready to present in one easy-to-read dashboard. So when investors start the due diligence process, your business is in the best position possible.
Zeni Inc. provides back-office financial services which include Bookkeeping Services, CFO Services and Controller Services. Zeni Inc. is not a public accounting firm and does not provide public accounting services.