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Top tips for founders from leading VCs

The first workshop of every Accelerator we run is an open panel discussion led by VC’s from leading Venture Capitalist firms.

This is because we want to give our cohort members access to VC’s to not only gather insight around the current investment landscape but also so they can ask an abundance of questions – an opportunity not always available to startups as they progress along their investment journey.

As part of our Spring 2023 FinTech Accelerator, we were fortunate to welcome Kibriya Rahman (Investor at Albion VC) and Shivani Shashidar (Investment Executive at Illuminate Financial). They led an informative session on the best practice for seeking VC funding as well as their predictions for the upcoming investment scene for FinTech businesses.

Throughout the session they also gave our Spring Cohort general tips for approaching VCs that are applicable to all startup founders. We compiled them here as the top six tips for founders from VCs.

1) Do your research into VCs before approaching them to see if they will be the right fit for you and your business. Important factors to note are what funding stages that firm invests in, as well as what industries. If you’re reaching out to VCs who do not invest in your business’s stage and industry, you will most likely not receive investment from them resulting in a waste of time and energy. Once you’ve done this research, be sure to include “why you and why now” in your pitch deck to peak a VCs interest.

2) Just as VCs won’t tend to invest in a business outside of their industry interests, VCs also won’t invest in companies that are too similar to an existing one in their portfolio. If a direct competitor of yours is already in their portfolio, chances of gaining investment from that VC are slim, as they will try to avoid any sort of internal competition between their portfolio businesses. It’s better to find VCs with companies that will be complimentary to your business, rather than a product which is an exact match.

3) It’s a red flag for VCs if startups approaching them for investment have given away too much equity too early on. Try to manage early funding rounds with minimal dilution in order to remain attractive for VC investment.

4) Do not ask VCs to sign a non-disclosure agreement (NDA) before even sending them a pitch deck. Chances are they will not and instead will see this as a red flag. If you are concerned about sensitive information getting out, just remember that VCs look at thousands of pitch decks so signing an NDA is not feasible – and it’s best practice among VCs to never share information. When it gets to term stage, however, this is an appropriate time to ask them to sign a non-disclosure.

5) Find a VC who treats the relationship between themselves and the founder like a mutually beneficial partnership. VCs are often highly seasoned professionals in the startup ecosystem, and can offer more than just the funds. Don’t pester them with every question, but a good VC should be willing to offer advice and foster connections.

6) Before ever approaching a VC, or any investor for that matter, clearly define the problem and the solution your business is solving in your pitch deck. VCs will never make an investment just off a pitch deck alone, but the pitch deck needs to peak their interest enough to have that initial call. The pitch deck needs to be high level enough to give an overview but still tick off the key points, mainly: Market, Product, Competitor Analysis, and your Team. Be sure to include your team early in the pitch deck and don’t hide this information in the appendix. VCs want to get to know both the founder and team they could potentially be working with!

While of course, all VCs have their own standards for pitch decks, and there are exceptions to every rule, these six tips are general enough to be applicable to almost all start-ups seeking investment.

Above all, it is paramount to do your research. Be the most informed you can be on your VC, their portfolio, but also on your product, its market fit, and definitely the major competitors. This research should be reflected in your pitch deck, and will definitely be influential in getting you that initial call with a VC.


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