One of the unavoidable responsibilities for the CEO of any startup company is to provide the initial funds; and round 2 funding; and round 3 funding, until investment is secured or revenue generated, as running out of cash is not an option.

Think you are ready to raise investment capital?

I review many business plans and pitch decks for companies who are seeking funding for their pre-seed, seed or series A through our Business Marketplace. And as part of our process to successfully secure capital for our clients, I also write many plans and pitch decks. I want to share with you what I’ve learned.

  1. Investors lend you money to make MORE money
  2. Investors write you a check when they are emotionally high
  3. Investors don’t bet on an also ran

 

Before you get to meet with investors, you will have to submit yourself to their vetting process by sharing information about your startup: pitch deck, executive summary, business plan and financial projections. In other words, your documentation will speak first on your behalf. You only have one chance to make a great first impression! Here are the top strategic errors many entrepreneurs commit from the get go:

  1. They do not ‘speak’ intelligently about their business
  2. They talk and talk about the labor pain but never show the baby
  3. They live for today

 

What does it mean to speak intelligently about your business in your pitch deck and business plan?

When seeking funding, the first thing is to prepare a funding business plan and not an operational business plan! Sounds obvious but many don’t know that such a difference exits! They contain the same type of information but the emphasis is on different points. Investors want to know 4 things:

  • Who you are
  • What’s your product and market
  • How much do you need
  • When do they get their money back

 

Use words wisely and sparingly: as you can imagine, you are not the only opportunity that investors are reviewing and vetting. Show empathy! Provide them with concise and to the point information:

  • Your business plan should not exceed 10-page maximum, 15 if very technical. And your 3-5 year projections!
  • Your executive summary: 2 to 3 pages
  • Your pitch deck: We use the Kawasaki method: 10, 20, 30: 10 slides, 20-minute presentation, 30-point font.

 

Lastly but not least, never underestimate the greed factor! You’d better be prepared to deliver a pretty big return on investment to your investors (while keeping it real!) with a strong business model. For some reason, the business modeling is usually where we witness the least creativity! Innovators create ingenious and unique solutions and yet take a very traditional route when creating their model. Creating your business model will require the same discipline and critical thinking that you put into your development process and some soul-searching too!

 

Author: Carine Dieudé, Partner, Director of Strategy, Entrepreneurship Aficionado – Growth and exit strategies, systems and operations, for startup, small and medium size businesses.

 

Altima Business Solutions, “Empowering You To Focus!”

 

Altima Business Solutions: We are business accelerators. We collaborate, mentor and advance entrepreneurs who are creating tomorrow’s jobs.

%d bloggers like this: