Back in 2013, I took a step that would change the trajectory of my career forever. After seven years at Goldman Sachs, I left for a new adventure. I was confident in my skill set, but terrified that I was abandoning the safety net of the corporate career path.
Fast forward six years, and how glad I am that I took that decision. I launched a foodtech startup called GrubClub, which I ran for five challenging but satisfying years, before EatWith acquired us in 2017.
One of the things I learned on that journey was how hard and how important it is to raise funding. That’s partly why I joined Angel Investment Network last year. I had raised money through them for GrubClub and really bought into their mission to democratise angel investment.
So, here are my five key tips for getting investment:
1. Investors invest in teams
Many of the most successful businesses are at their core very simple ideas. Google allows people to search for stuff on the internet. Ford builds cars. But neither Google nor Ford were the first in their category.
Their success is commensurate to their ability to execute changes.
That’s why the team in charge of navigating this journey is so important. And that’s why investors invest in teams. So, keep that at the forefront of your mind both when building out the early team (obviously), but also when creating a story for your pitch.
2. Remember that investors are not the same as customers
(This point is related to #3 below but is important enough to mention on its own.) Entrepreneurs often fail to communicate successfully with investors because they explain the benefits of their product/service as if describing them to a potential customer.
This is easy to do because during product and strategy meetings their focus has no doubt been on crafting the proposition to customers.
While your investors may also be customers, your proposition to them should not be the same. You will lose their interest if you talk to them as if they were customers. So, craft a story and a proposition specific to them…
3. Tell investors a compelling story
I hear a lot of people give advice like ‘tell a story in your pitch’. But they often fail to explain how to do that meaningfully. So, how do you tell a compelling story to prospective investors?
The most basic story that all investors want to hear is how they are going to make money. There may be other factors like the desire to make a positive impact on the world. But ultimately, an investor wants to make a return.
I heard a founder sum up this idea nicely on The Startup Microdose Podcast – he said, “Show investors what winning looks like.”
So, build the story of your pitch by putting dollar signs in the eyes of investors and by explaining to them how you are well-placed to execute on this grand vision.
4. Create momentum
Investors are busy people. You will not always be top of their priority list. So, don’t be disheartened if they don’t get back to your message straight away.
But also, don’t be shy of sending them reminder messages.
The trick to doing this and engaging them is to try to include some impressive update that you’ve achieved since your previous message to them e.g. ‘Ex-CEO of Unilever has just agree to join the board’ or ‘1,500 new users sign ups in the last week’.
This creates the impression of progress and always helps to prove the competence of you and your team.
5. Don’t waste time
We live in a digital world. A world full of tools to boost your productivity and streamline your processes. Use them! There are some great ones for raising investment. My favourites are: Seedlegals – for digitally creating and signing all your legal documents; MixMax – for seeing if people have read your email and how many times and when; and, of course, Angel Investment Network – for meeting investors you could never otherwise hope to meet.
What do you think?
These tips are both from my own experiences. Do you agree/disagree or need more explanation? (Let me know in the comments!)
Olivia Sibony is an award-winning entrepreneur and ethical investment champion. She left a career at Goldman Sachs to launch foodtech startup, GrubClub, which she sold to Eatwith in 2017. She then joined Angel Investment Network (having previously raised money through them) to launch and grow SeedTribe, a spinoff platform focused on impact entrepreneurship.
She is also a Board member of UCL’s Fast Forward 2030, which aims to inspire the next generation of entrepreneurs to launch businesses that address the UN’s Sustainable Development Goals (SDGs).