The Secret Science of Raising Money — A Guide for Entrepreneurs

Serial entrepreneur Tine Thygesen has raised more than € 5 million, so we had a chat with her resulting in these 10 untold truths about raising money from Business Angels and VC’s like ourselves.

Tine has an immense amount of experience working with startups and has worked with over 100 of them. She is the former CEO of Venture Cup, 23Video and Everplaces and co-founder of Founders House. If that wasn’t enough, she also regularly writes about leadership and building companies on Forbes and Finans.dk. Her many amazing abilities has earned her a spot on the Top 100 Women in Tech in Europe. Give it up for the uncrowned queen of Danish serial entrepreneurship! Tine Thygesen!

#1 Speak the Language

You can’t expect VC’s and Business Angels to understand your idea if you can’t explain them why they should give you their money. You have to show them that you understand your business. Learn the lingo and expressions and know your numbers, CACs, conversions etc. Understand a VC’s business and what they need in return

#2 Raising money is like Dating

Like on a date it’s all about attracting your counterpart. You have to be the funky girl on the dance floor. Be visible and let them ask you questions, and make sure you leave them wanting more. People always want what they can’t have. But remember it’s a delicate balance between playing hard to get and being too cocky.

#3 Include the basic, leave the rest

Your pitch is meant to answer the most important questions and deliver a confidence in your ability to execute on the vision. Don’t make a three-hour pitch with 457 slides but stick to the most important for that first deck, which I would say are: Vision, Problem & opportunity, Market opportunity, Traction, Your product, Growth engine + revenue model, Competition, Financials and Team. Then take it from there.

#4 Early Stage: Often easier to sell vision than traction

If you are at the beginning of your journey you might be too early for traction. That can actually be an advantage, as it gives you the chance to sell the dream, rather than get dragged down into detail. If you’re not 100% that you can achieve the projected traction (you never are) then consider raising on the vision, rather than early into the traction phase.

#5 Deliver!

An early stage investor invests in the team as much as they invest in the concept. This is particularly true for the CEO. Therefore, convincing a VC or an angel to invest in you is all about proving that you deliver on your promises. So make note of the projections you’re sharing with each investor, and make sure to communicate when you reach them. This is especially relevant for when you’re having several meetings with the same investor over time, so be realistic in your projections and keep all your decks so you remember what you’ve projected last time — things may have changed in the meantime if you’re in an explorative phase. Start early, several months before you are raising, and build trust around you and your company.

#6 Psychology of power

Investment is a power play so try to meet investors on an equal level — this is why introductions are so important. Alternatively, spend time in places where investors come, like in Startup Village (which SEED Capital is closely partnering with), so you’ve met them casually before you’re in a pitching situation with someone.

#7 Play to win, not survive

The way VC funds are structured means that the bigger the fund, the bigger the return they need for an exit to make a difference for them. That’s why, to be relevant for a VC, you must go for a big market so make sure you pick a niche worth fighting for. Think of TripAdvisor. They could have tried to raise money on the basis of the travel information niche worth $500 million or on the basis of a far greater market of overall travel worth $920 billion — and one of the largest industries in the world.

“Just because someone is not publicly known as a business angel doesn’t mean that he or she won’t invest. Daniel Agger, from the national football team, invested in Tatoodo because he’s passionate about tattoos”

#8 Don’t just ask the usual suspects

Try to be creative when it comes to funding. Just because someone is not publicly known as a business angel doesn’t mean that he or she won’t invest. Look for wealthy individuals in your industry and those that are passionate about your product and industry, not just “official” angels. An example is Daniel Agger, from the national football team, who invested in Tatoodo because he’s passionate about tattoos.

#9 Play the hand you have

Much reading is about serial entrepreneurs; but be aware that they will have other cards than you do. Learn from them, but focus on the people you have access to. What are your strengths? Use them. Don’t wait for perfect circumstances — they most likely will never come. Instead, play the hand you have.

#10 Pitch Perfect

If you’re doing a pitch on stage then your opening sentence is of massive importance. And try to tell a story that people can relate to on an emotional level, rather than just reciting facts. Remember that your pitch deck is for emphasis, not information! You are not there to accompany your slides — it is the other way around. And one last thing — own the floor and speak loud and clear.