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I have been a venture capital investor for less than 45 days and counting. Most of that time has been spent studying my team’s investment “strike zone” and using that framework to identify our next potential investment. As a benefit to founders looking to raise capital, here are some questions to ponder: 1. Who are you as a human and what relevant experience do you bring? 2. Have you prepared a comprehensive, thoughtful and quantified investment deck? 3. What is your unique moat and what is your plan to maintain that?
While the business idea is significant, the human element as an investment criteria is second to none. Particularly as early- stage investors who sometimes discover a prospect before there is significant traction to date, we’re investing in the founders’ demonstrated integrity, passion, relevant experience and proactiveness to go the extra mile. If your startup operates within the realm of regulatory uncertainty, have you sought out opinion letters from well regarded law firms to ease the minds of yourself and your potential investors? Do you have a no-action letter from the SEC? Are you lobbying for the adoption of self-developed legislative frameworks? These are just a few actions that can be taken that demonstrate the conviction you have in your idea and your willingness to go the extra mile to see it through. Concurrently, being receptive to feedback and flexible in your approach helps give us the confidence we need to believe in your ability to sell and manage product development through goal achievement.
Your investor deck, much like a resume, is often the first point of contact your startup has with an investor. Lead with an impressive team page that shows a history of experience in the space and the right leadership qualities and positions to make your startup a 10x. What is your why? What problem are you solving? What is your unique solution? Who are your competitors? How do you differentiate from your competitors? What is the total addressable market? Have you demonstrated product-market-fit? Have you demonstrated product-market-price? What traction and momentum are you seeing in users, revenue, pipeline, feedback? How much are you seeking to raise? What is the planned use of funds and what goalposts have you set if provided the funds? Again, much like a resume, quantify as many of these answers as possible.
"Much like interviewing, capital raising is a two way street for both founders andinvestors."
At Vestigo Ventures, we like to make data-driven investment decisions and we have an affinity towards data-driven technology in our investments. When it comes to your moat, or your ability to maintain a competitive advantage over competitors, this is an area to really fine tune and hone in on. If you’re truly pioneering a space with some cutting- edge technology, for example, highlight that within your investor deck and indicate that you’re working towards a patent. How much time, capital, resources are you saving your target customers? How does integration into a customer’s existing systems look? If your target customers are enterprises, highlight an enterprise-first technology stack. A strong founding team, thorough pitch deck and compelling moat are three leading qualifiers to win and maintain support from venture capital firms.
While this article was presented as tips for founders looking to raise capital, the same approach can be applied by founders as they consider which fund is the right investment partner for them. Much like interviewing, capital raising is a two way street for both founders and investors. Founders should be assessing investors as humans, our portfolio success and our unique ability to support you through your triumphs and battles. At Vestigo Ventures, we place high value on our ability to support our portfolio companies. Even if we love the founders and their business idea, we won’t invest in a company unless we believe we can provide them with quality support by using our network, data or extensive operating/founding experience. Whether we’re conducting SEO/SEM research to help our portfolio companies understand their search engine traffic in relation to that of their peers, or just answering a founder’s call on a bad day, we take pride in our ability to be supportive thought partners to our founders. Make sure your investment partner is providing more than just capital - this is a strategic partnership you’re seeking. Happy fundraising!