LESSONS from top investors about successful startups

It’s a little bit like job seeking, 80% of the opportunities are found offline.


The screening

I listed all the people I knew who were related to my ecosystem. I completed the list with relevant contacts I could find on Linkedin. I prioritised them per their relevance and to our degree of connection. I categorised them: friends, advisors, investors.

I made a research about companies in my space and competitors. Who raised funds with who? How much? When? Did they exit?

Then, I went out and met first with my friends within the ecosystem. I asked people feedback on the business, the pitch, their fundraising experience. When they like the project or want to help me, they help with introductions. And so, on and so forth. Until I got the right person in front of me.

It’s a little bit like job seeking, 80% of the opportunities are found offline.

The deep research

I mapped out my ecosystem and looked for the best content online about fundraising. I was lucky to come across videos from The Family. There’s a video (in French, sorry) for each stage of the fundraising. It saved me some time. Thanks, Jean de La Rochebrochard!

The investment scene, whether it’s in USA, France or Asia, has its own codes and culture. A “tourist” is rapidly spotted.

Before the launch, I read books about venture capital and blogs. I particularly came across the book “The business of Venture Capital” from Mahendra Ramsinghani. It talks about how some VC funds raise funds themselves. I was impressed by how much more stressful their own fundraising could be.

It made me understand investors to better address their goals and concerns.

The due diligence

My position was a little specific as I wasn’t the one who founded the company. Hence, I had to know everything about the startup. Who does what? The good and the bad sides. See the company “naked” and go deep through the financials. Some investors tend to insist a lot on the financial projections before investing. Since it was for hardware + Saas company, I also had to know as much as possible about the technical challenges.

Talk to specialists, competitors and other startups in your ecosystem.

Network is key

Talk to people around. Network and reputation are definitely key. Like any activity involving high stakeholders and a lot of money, it’s all about the people. That’s the reason some startups work with fundraisers. They have a network and reputation. Note that it’s only worth working on large fundraises for them, since you never know for sure how long it will take.

Make sure your ducks are in a row

Build a Q&A list as questions go and prepare a clean data room. Know which assumptions are made for your financial model. Be square and methodical. It’s easy to get overwhelmed by the tons of questions and remarks and always be looking for the best answer. So every time I got a question, I put it in a Q&A document and spent time crafting the best answers. It takes away some stress for important talks.

Prepare your calls and meetings

List the questions you are going to ask. Be specific. I spent time trying to know people I was about to discuss with. I tried to anticipate their questions based on their background and personality.

It will take time and it’s harder than you think.

So be over-prepared. Unless you are a startup superstar, you definitely never know how long it’s going to take. People around will challenge you. You will doubt. About the company, about yourself. Keep on believing and be well surrounded.

And other examples below.

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By SeedBlink Knowledge

PublishedDecember 07, 2020

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