What Are Investors Looking For?
As fundraising is an area that entrepreneurs often have questions about, the Summer Venture Program invited three investors to share their side of the story. We were privileged to have Natalie Bartlett of General Catalyst/Rough Draft Ventures; Ziad Moukheiber, CEO of Boston Harbor Angels; and Jason Frishman, Founder of NetCapital provide their insights. The three panelists represented “Investors of All Kinds”: student investors, angel investors and crowd sourced investors.
Bartlett, Moukheiber and Frishman each shared a little about their respective firms. All three panelists have screened hundreds of funding applications, pitch decks and have heard many entrepreneurs ask for money. Some of the takeaways of the panel discussion were:
- Team is key. Investors are looking at founder’s backgrounds, their experiences and whether the team is well rounded.
- Being able to share the story of the venture is important. You are a salesman for your company; make the opportunity exciting for the investor. Your venture is something that they should want to share too!
- Focus on traction and your accomplishments (much like Les Charm also shared!). Be confident!
- The goal of your first meeting with an investor is to get the next meeting.
- Pitch decks are important! Although the focus is on you when you’re presenting in front of an investor, don’t discount your slides!
The three panelists also shared some common mistakes they’ve seen entrepreneurs make. One panelist shared a story of a team consisting of two co-founders. They presented their venture and when asked about how much equity the investor would get, each co-founder had a different answer! The entrepreneurs (and investors!) came to realize that the team was not on the same page about the company’s future. If you are part of a founding team, make sure that you discuss your company roadmap with your co-founder(s).
There is no exact formula to getting investment. There are many factors that influence an investor’s decision to say yes, such as stage of venture, industry represented, current trends, and, of course, the team behind the startup. Although the fundraising process can be different for everyone, remember that these key points are important to keep in mind if you decide to raise money.