How to Raise Money from VCs
Five Lessons Learned
We invited four successful founders and VCs to discuss how they assess the current investment market, how they managed to raise money themselves, and which concrete tips they have for startups. Our CCO and Co-founder Jessica Holzbach hosted the virtual Fintech Berlin Meetup on 16th June 2020 with our invited speakers:
- Barbod Namini – Partner at Holtzbrinck Ventures
- Mathis Büchi – Co-founder and CEO of Taxfix
- Stefano Vaccino – Founder of Yapily
- Ariyan Seyed Nassir – Founder & CEO at Uplift1
We have recorded the whole Meetup and you should definitely watch the video to learn more about venture capital. Short in time? Find our five key learnings here:
Lesson 1: Networking mode: ON
Ariyan described the time while he was looking for investors as an interesting journey which also resembles a permanent learning process. He also knocked on several VCs doors back then. “Keep networking” is also a recommendation that Stefano gave. After all, he didn’t think at the time that he would receive an investment just a few weeks after he met his investor. Maybe your coffee date will turn into a meeting with your future investor. You’ll never know for sure – unless you take the chance!
Lesson 2: You have to kiss a lot of frogs before you meet your prince
Barbod, as a Partner at Holtzbrinck Ventures, one of the largest and most experienced independent European early-stage venture funds, recommended serious introductions. Furthermore, reputation is one of the biggest assets. “Practice makes the master” said Barbod with a smile. In order to get the opportunity to get VC, it takes an idea, a deck and a team, noted Mathis, who has already successfully managed several investment rounds. At the beginning of all rounds as an early-stage venture, it is more about storytelling and presenting the team and the market. Later the focus is more on the numbers and growth.
Lesson 3: Go broad or go deep
One key learning for organising your VC process came up: There are two approaches on how to select VCs and most startups perform a mix of these two extremes. On the one hand you can send a high level pitch deck to every investor email inbox you know. Spread it wide in order to get some conversion. The other extreme is to go deep – meaning researching the fund, identifying the right industry partner, getting a warm introduction, and tailor your pitch. Lessons learned: decide for one of both extremes, don’t make a mix.
Lesson 4: Post COVID-19 is an opportunity
When it came to the question of whether COVID-19 still has an enormous negative influence on raising money from VCs, Barbod was relatively optimistic. He observes that a lot of Venture Capital Funds are starting to make new deals again.
Lesson 5: Don’t lie on your first date
Our speakers were of course asked for some tips for raising money from VCs which they would give to other founders. Mathis recommended having honest conversations with a lot of prepared research before-hand. The pitch deck is just the entry ticket and the right pitch starts with a proper concept. You should make it clear that your company is the one which should be chosen and provide strong arguments. Of course you should raise interest and try to make your intentions clear but you should avoid unrealistic promises. But also progress and numbers are crucial and one should not only be a good salesman. So be honest – it is a long relationship. Always keep in mind: a good relationship with the investors is particularly important for future financing rounds. Almost a bit like in a marriage!
Jessica and Mathis came to the conclusion that raising money from VCs is a learning process, in which you gain a lot of knowledge about yourself and your company. A bit like in a marriage, too, right?
Watch the whole panel discussion and learn more.
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