Fundraising 101

0:03 Welcome to business purpose and Clarity with patreon your host we talk about startup live insights practical tips mistakes failures and everything between I just came from another meeting where I closed sales and now our monthly mrr is around 25k we just started last year in August so we've been operating like eight months and we are basically now approaching the cash flow positive situation in our company and now we don't have any investors yet would you like to hear more how does that sound as a start in an investor meeting instead of something like we are doing this this is our mission um we are looking for funding and uh should I check the deck with you.

1:06 Lead with the beef start with the good news so that you really want indicate the level where you are because for the buyer which is the the important stuff is to have traction do we have sales is the product somewhat ready already are you serious do you know your stuff if they can tick those things and maybe some other ones as well then they are willing to listen to more they don't want to hear first what do you do why you do it and how you do it then who is the team and the endless list of stuff before they know whether the whole conversation is relevant for keep that in mind When approaching and talking to potential pious and yes you are selling because you're selling yourself you're selling company but let's start from the beginning before you talk to any investor you should do your.

2:10 On home research who are the investors partners people you want to work with think about it first what are the values what other things you don't wanna in any to a cross what are the deal breakers do at least of those investors that you think potential it would be like a really good fit your wish list if you will those you would like to get on board because they have a good reputation they have done a lot of stuff which is successful maybe if they are a little bit older company or investor with exits check the company check their focus check your compatibility like with their values with the funds consider also the how many fonts they have how old is the fund who are the investors in those funds what is the track record of the partners.

3:14 Of the Venture company if we're talking about VC check the news ask around and when you approach sold those things by stating something that you have done your research that you know what you're talking about that you really would appreciate working with because not too many people do that you don't need to go to a large extent of sowing that dropping something in there that you have done your research goes a long way when you go into the first meeting start with the tracks and stuff start with the why question doesn't really matter how you do it but you know you should raise the interest in a way that yes this is a relevant conversation yes we are in the right States for you yes you would really like to talk to us because of these things we are a really good deal and it's worth your time when you present your case don't jump to the details start with the first big stuff first the.

4:18 Context you don't even need to go to the company specifics because well if you have done your research you probably can skip these things but it's always good to check because if something has changed are they actually interested of this field do they actually buy the problem the solution the market these big things these meta things because if they don't what's the point of going into details so if if they say that yes this is relevant Market yes we buy the assumptions yes we buy these things and yes your particular which is your company specific thing your approach your product Your solution looks interesting yeah yeah it sounds convincing then this is already getting to the details where they are looking for this particular space and maybe you instead of some of the competitors because if you did your DD also early on you should know already at this stage that they don't have.

5:22 Anyone in this category because if they already have a competitor of yours in their portfolio why are you talking to them ask a lot of questions so if in the the investors are questioning something they are throwing you hard balls and you have done it in a way that you go back and say well would you agree that this is a relevant problem you agree that this approach makes sense but you agree that the market size is enough or you agree with this and these things so if you have done your approach in a you've been getting verification from the investor earlier on you can stick to those specifics you can ask sorry I don't understand now just previously said that this is an exciting market and our approach is the one you agree that is the way to go or you agree that this is.

6:27 The pricing point or whatever the issue devaluation is not important in the the specifics are not important in the beginning only the context is important in the beginning so don't share too much data in the beginning because that's not relevant who wants to talk about the price and they haven't been convinced about the in the first place so if you're not even sure whether you want to buy anything there's no point going to the pricing or if you do it this way it's really old and weird way of trying to to process sales it may not work with investors opening your own deal room showing all your files even bodies under the pitch deck material from the beginning it's something which I wouldn't recommend to I just mentioned this because I have.

7:31 Seen and heard cases where this has been done even into cold calling even in the very first so fundraising 101 maybe these were some of the issues to consider talk about do your homework check your preferences your red lines you don't want to cross with anyone and if they if that happens then you walk going to specifics check that the check that you share the world similarly with the investor because it's going to be a long-term partnership your company specific stuff doesn't come first it comes quite late in the process why would it make sense if they're not convinced of the problem or the target market all the big stuff in the first place thank you.