How to raise venture capital?
You have an excellent idea, a great team, but what you don’t have is funds to execute your idea. But fear not, there are many ways to raise capital. If you are at an early stage, venture capital might be just the thing for you.
There are different venture funds in Denmark. SEED Capital is the largest early stage venture fund in Denmark. Each year we invest in approximately 20 new companies.
Ok, so venture capital might be a really good idea. So far so good. But how do you make a pitch that will blow your investors mind and show what a rockstar you really are. How do you stand out from the crowd? And how do you increase the odds of landing an investment?
Don’t worry. We’ll give you some pointers.
100% or nothing
Show that you are 100% committed to your company. Get ahead by showing your investor that your passion is genuine and that you are willing to deliver sheer hard work to transform your business into a success.
Also read: No pilotless planes please!
Tell a story
Build a story around the product, you want to sell, how you want to sell it and why customers should pay for it. You might even construct a persona, say a guy in his 40’s named Paul — tell your audience why Paul would want to buy your product. This will help bring your customer to life in the minds of your potential investor. And remember, the more groundwork you’ve done, the easier it is to catch an investor’s interest.
Why are you the chosen one
When we invest, the team is simply crucial. Explain why you and your team are the right people to execute this very idea. It is essential that your team is complimentary, so really try to get into why your team is greater than the sums of its parts.
Show Potential
Show that you operate in an interesting market, which has the potential to become huge, grows very fast right now or is currently undergoing some restructuring, that will lead to new, attractive markets. Just think of Vivino — despite a first product that wasn’t very good, the users kept coming. They showed us an unfulfilled need and a gigantic market and on top of that number 1 in the market was up for grabs.
Also read: Vivino: such a cool case from the beginning
Let others do the talking
Show that your company is competitive now and down the line. Let others praise you — ask for testimonials from customers or potential customers. It will definitely be in your interest if you have beta customers who are happy to be using your product — this is assigned great importance by investors.
Show scalability
The company needs to be highly scalable and the model of income have a significant chance of generating extensive growth and, in time, obtaining considerable profitability. Show your company is scalable. Its about being able to grow the business without the cost base growing accordingly.
Show me the money
Show that your income model has a good chance to create growth and profitability. Present a realistic income model, explain how it will be executed and show your investor that you have a grip on the financial aspect of your business.
Paint a future picture of multiple buyers
Show that there are more potential exit scenarios and make a list of potential buyers. If possible, have prominent professionals from your industry express their interest in your business and comment on a possible future acquisition.
Vision will get you far
When pitching your business, you have to be able to communicate your vision. This is immensely important as it will be the vision that gets you your first customers, your investors and your employees. Top-tier talent will not leave their well-paid jobs at established brands to work for a startup, unless you are able to sell them the dream of your future business.
If you are able to communicate the above mentioned points you have yourself a great pitch.
Also read: A venture investment is like a marriage
