The Golden Mantra:
Seek Value, Not Dollars
Seek Capital, of course!
Obviously right?
As start-ups one of the key asks from investors is capital. But be specific on how much need. Substantiate how you will be utilizing it.
Better yet....
Seek a Partner
I personally feel, investors can add a lot more value than just infusing capital, their network and mentorship are powerful and often invaluable.
See how you leverage that more strategically to access opportunities or talent better.
But more importantly,
Give
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Fairness:
How will you ensure that investors are also gaining for trusting you?
Exit:
How are you going to give a successful exit to your investors?
Clarity:
When are you planning your next raise? What do you intend to achieve by then?
Get Ready!
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Rebuttal begins now!
Here is what I know works
1
Always be specific in what you seek and have a working backing it.
2 Research your investors and their portfolio before the pitch, you can ask more than just money. Ask their other portfolio company founders for candid feedback - its healthy and expected. 3
Ask only as much as you require. Overdilution and over funding are double-edged swords in the early stages.
4
Ask for the next 24 months of cash flows with a small (say, 15%) contingency buffer. This is when you could be ready for another round and can help you make longer promises to key joinees.
Posts in this series:
Step 1: Mastering the hook
Step 2: Getting a valued proposition
Step 3: Modeling the future
Step 4: Go to market strategy
Step 5: Getting the math right
Step 6: Designing the right Ask
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