Your startup is growing, and you and your partners are ready to start pitching to investors and venture capitalists. You have ideas and ambitions to grow your business even further, but first, you need to raise more capital for your business. Before you start scheduling meetings with investors and putting your pitch into action, here are a few pieces of key information that you should keep in mind:
- Regardless of the investments you get, you should still plan to bootstrap.
If your idea is attractive and your pitch is good, your venture could feasibly land a multi-million investment for your series A round of funding. With that much money, it’s easy to lose perspective and start feeling like you’ve “made it” already. Just because you raised a lot of money doesn’t mean that you should plan on giving huge salaries to yourself and your partners, or spending big elsewhere. Bootstrapping is an important value for startups, and it remains important even after the first big funding round. In the early stages, you were spending lightly because you needed to make a small amount of money go a long way. Now, you should bootstrap to avoid burning through your capital too quickly and having to raise money again. Remember that, to land investments, you have to sell equity and dilute your ownership. Giving yourself a big salary might seem tempting but, in the long run, keeping equity is more valuable.
- A short and sweet pitch is not a bad thing.
Many entrepreneurs over-explain their businesses in pitches. Particularly when you are meeting with a high-powered investor, it’s easy to feel like you need to do a lot for your pitch to be successful. However, having a pitch that is short and to the point will maximize the impact of your words and prevent the possibility of investors getting bored or restless. Best of all, a short pitch will leave time at the end for your prospective investor to ask questions and engage with you on a more personal level. When in doubt, film a sample pitch and then watch it back, noting all of the spots where you can trim excess fat.
- You can learn from the rejections.
Part of being an entrepreneur is learning how to pick yourself up and dust yourself off after you have been rejected by an investor. And you will face rejections: not every idea is right for every investor or venture capitalist. However, you can learn from your rejections. If you pitch to an investor and he or she declines to make you an offer, take a chance and ask what you can do to improve your pitch going forward. You’ll gain valuable feedback that you can use to hone your pitch and make it better for next time.