There is hardly another investor in Berlin that has been involved in the Berlin Startup community on so many levels like Videesha Böckle. A founder herself in the past, she is now an angel investor, managed large funds, shares stages with the most renowned global VCs, never tires to support female founders in getting more visibility, is actively promoting sustainable investments and still finds time to spend endless hours to mentor young entrepreneurs. Her advice is based on the knowledge she gained from both perspectives: as the one giving money and as the one receiving investment.
At the Vision Health Pioneers Incubator, Videesha Böckle is the “go-to-person” when our founders need investor advice. In a special session, she shared her advice on what to consider at the early stages of pre-seed financing rounds when talking to investors.
A good investment strategy starts way before you send the first email to an investor. There are specific steps to take in the beginning to help make connecting with investors a more impactful experience. There are plenty of tips that could make a difference in the early stages of presenting the vision of your company and product.
Understanding The Purpose of Raising Money
So you want to talk to investors because you want to raise more money for your company. More money for your company allows you to be more competitive in your given market. Having more money also allows you to jump into new markets in other countries. But before making the jump to talk to an investor, take a look at your budget and see if your desires can be covered by what you already have. If that is not the case for your company to be competitive, then gear up and get ready to talk to some investors.
You recognized that your company requires funding for several factors. The first factor being that your competitors have been growing at a faster rate and because of that have been gaining more revenue. With this factor in mind, your company now has lower entry barriers, which means that there isn’t much that makes your product stand out amongst your competitor’s product. When your competitor has more money to acquire better tools to make their product stand out, you’re looking at a great chance of losing customers and that’s when it’s time to find investors.
Another factor is that you want your product to reach an international market. While you may be doing well in the origin of your company’s base, you’ve been wanting to push yourself and move to greater heights. Making connections with investors will allow your company to have access and the right funding to acquire resources and tools to get you traffic from customers outside of where you are based. Speaking of customers, another factor that shows that getting an investor can help grow your company is that they will help you acquire customers faster.
There will also be moments when you’re running a company and you’ll be able to look at prototypes for different devices. While you and the employees of your team may get excited about the prospect of using that prototype with the products of your company, often you’ll need to have that money upfront. Getting investors to help fund your company will get you the money to be able to get prototypes and make more revenue in the long run.
Important questions you have to ask yourself:
- What is the purpose of the funding I need? What is the end-goal?
- What kind of investment is the best for me? Angel Investors, Classic VCs? Corporate Venture Capital? Public Grants? Accelerator Funding?
- What are the values you are looking for in an investor – that will become part of your company in the long run?
- Is the timing right? When do I need the investment? How much time until I have to secure the investment?
- How much external money do I need?
- How much am I willing to give? Keep in mind that you have to give up equity of your company most of the time in return for investment.
Getting the Attention of Investors
Now that you’ve recognized that you want to connect with investors, you must make them interested in what your company brings to the table. Investors will be looking at every aspect of what makes your company worth investing in; from the personality of your founders to the kind of product you are developing for the marketplace. They will also keep in mind the timing of when the product will be released and whether or not the product that your company developed has potential.
Böckle often observed that founders do not have complementary skill sets. The founders would maybe match up closely in the fact that they’re all tech developers but there wouldn’t be enough diversity to show a strong foundation as a team. Investors value teams and how they operate within a company. If they see that the founders of the company don’t have a skill set background that looks like it would be successful in facilitating growth, they’re less likely to invest.
It’s also important for investors to be able to connect with the founders in regards to one’s personality. They want to make sure that they can click with the people they’re investing in. Investing in a company is like forming a partnership, so they want to make sure that your company upholds values that they believe in. Investors want to be able to trust that what you present to them about your company are the real, hard facts.
A company’s work environment in regards to teamwork is also very important to investors when looking at possible funding opportunities. Showing that you have a strong team of people who can handle work as your company continues to grow helps your investors understand that you are ready to enter into this partnership. Having a strong team also shows investors that your company can handle challenges. They want to see that the company that they are trying to invest in is working in a way that can facilitate growth. Investors also find it impressive if your company has a repeat founder.
Important questions you have to ask yourself:
- Have I outlined my value proposition? Why should an investor invest in me and not my competitor?
- Are my facts & figures correct? Am I able to answer critical questions?
- Do I have a strong team that will be able to accelerate the company once the investment is secured?
- Where do I find the investors? Which communication channel do they prefer?
In Conclusion
This article addresses some changes that need to be made in approaching how you run your company before reaching out to investors. Your company may be in a place to reach out to investors and show them why investing in your product is a great idea. If you take Videesha Böckle’s tips and questions to heart, you will make a good impression on investors. Make sure you have complementary skills, a charismatic personality, and a team that gives investors confidence in your company’s growth for the future.
