If you are not bootstrapping, you will need to master fundraising. Life and death of a venture depend on liquidity and this usually implies multiple rounds of investments. Competition in the digital age is higher than ever before and if you do not scale fast enough you will lose. No pain, no gain!
We have raised quite a lot of capital during the last years, supported portfolio companies of ours, venture funds and accelerators to improve their scale-game. We learned success and failure factors of fundraising the hard way – today we will share 5 easy hacks to boost your fundraising efforts and recommend following them by heart.
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“Most giving is 80% emotion and 20 % rational. And the best way to get to someone’s emotions is to tell a story.” – Henry Rosso
Investors are typically specialists in certain areas. They are smart, highly experienced, and extremely good connected people. To find fitting investor sounds difficult, but if you do some homework you will be successful. Usually, you find blog-articles, videos, interviews or startups they invested previously in and out of those sources you will get highly valuable insights about specific investors.
If you treat investors like a “Buyers Persona”, you will find yourself in much better talks and will have a much higher probability of closing a deal. You simply don’t have the time to talk with investors targeting more mature or only specific industries (outside your field). You need to focus on smart money with value to your company and take the time to get to know those well. For the simple reason that if you close a deal, your relationship will last for a while and it needs to hold up in good and in bad times.
The majority of startups with minor success in fundraising do not use any kind of marketing solutions to build and grow a strong investors pipeline before they actively reach out for fundraising. Fun fact: most of the same startups use those services for funnel-management within their core business.
Note: Venionaire Capital is an official Startup Partner of HubSpot – the leading inbound and marketing automatisation software on the market. If you are interested in receiving highly discounted rates for Hubspot, please contact us.
We recommend working on active investor communication from day one. It’s easy to target investors with interesting updates (KPIs, features, recent hires, successful growth hacks, learnings, etc.) once you have defined them as a Buyers Persona. Investors are actively hunting for talents, products and services which stick out of the crowd. If you manage to attract the right subscriptions for your public investor’s newsletter (public), you can follow if they return, interact with you on social media and analyse who they are before you contact them.
Putting some brains into this specific funnel is a very smart way to build a virtual relation or deepen a brief connection you made at an event. We see too many startups going to events, exchanging business cards without having set up a clear process beforehand and therefore wasting time, effort and money.
So you decided to focus on your perfect investor and to automate your communications? Well done! If you track your investor’s interactions with your media carefully, you may even segment groups of your audience now. Every investor looks at different things – some concentrate on teams, others on the product, services or technology and again others on KPIs. You need to understand what kind of information is vital to your investors – within your funnel – and learn from it.
You can track which information has been viewed, which newsletter was opened by whom or which blog post was liked or shared by potential investors on your Social Media Channels. Take this opportunity and interact with the investors you like to attract the most; and always remember: investors are information seekers and mentors, they love to engage with smart talent and interact with founders.
Your communication strategy for products and services is central – that’s clear. The smartest and most valuable money you will ever receive is revenue through your clients! Investors will need your vision for the future, your equity story in addition. Your early clients are also hungry to understand what you have in mind for the future … so tell them and talk about your vision.
You can talk about your long-term vision, your milestones or your short-term goals always following the mantra: underpromise and overachieve. There is nothing better to share than positive information about the small steps you achieved and to keep a constant flow of positive news popping up every other week. If you are planning to communicate numbers (e.g. company revenue, or a number of clients), you should make sure to use relative (% growth) numbers – just to make sure you do not expose yourself too much in the public.
Always involve all your core-stakeholders! If you have attracted great talent to work for you, business angels or funds to invest in you, you have already built a powerful ecosystem and should not forget to use it actively. Involve them to help you spread the word constantly, keep them actively engaged. Tag them in your posts, deliver your content to them first (e.g. through messengers) and ask directly for sharing your messages.
Most core-stakeholders will be happy to help you, will increase your reach and add trust if they are well-known industry experts. As your stakeholders will know people who know people that might be very interested to get in touch with you, this is a gold mine to claim.
To sum it up
As a young growing company, you should seriously consider to evaluate your efforts in this area and find out, if your investor relationship channels work as effective as possible. Still not sure what investor to approach? Venionaire Capital and Partners from KPMG founded the European Super Angels Club. We combine the financial power of our members for the good of the European startup ecosystem. You can easily apply online for funding.
Looking to get attention to your company? We highly recommend our friends @ skyrocketX.com to boost not only your media relations on the go, but also investor specific communication strategies. Maximize your communication efforts with simple growth hacking tricks and ideas.