Having witnessed countless fundraising processes from the investor side as well as having supported more than a handful myself, I can tell you one thing for sure: every fundraising process is different, simply because people are involved. However, there are a few best practices that you can follow, and I’ve summarized these here for you. Use wisely, because the most important factor in fundraising (as in any human interaction, for that matter) is staying authentic!

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1. Tell a great story

The key to fundraising really is to be able to tell a great story — I’ve therefore dedicated an own blog post to this topic: How to create a great (fundraising) storyline. …


The key to fundraising really is to be able to tell a great story, i.e. being able to provide a succinct and coherent explanation for why you will succeed. Most founders underestimate the value of having a storyline, but looking at startups that have raised lots of money (e.g. Tier Mobility, WeFox, Uber) they have in common that their founders are excellent storytellers. Here I’ve summarized a few best practices and an approach for you to create a personalized storyline for your business.

The first step to creating a great storyline is to define your company’s mission. Your mission is basically the problem you’re solving today but looking at it as a much bigger picture. Let’s take a look at Tier Mobility, maybe one of the best storytellers out there: they are currently offering scooter sharing, but their mission is to “change mobility for good”. Anything they do or say has to help this mission and the storyline they’ve created around the topic of sustainability: from the founders’ personal backgrounds, providing only vegetarian food for team meals, reducing the carbon footprint of their scooters to planting trees in Berlin. …


Once investors have decided that they like you and your business, they will all ask you for the same: a financial plan. It might seem like they want you to look into a crystal ball — as Germans would say — and give them an exact prediction of how your business will look like in 2 years’ time (if you knew that you probably wouldn’t need venture capital, right?). But the actual expectation of a (good) investor is simply to see whether you have a good understanding of your business. …


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The road ahead is still uncertain but it doesn’t look great right now.

Covid19 has hit everyone quite badly and due to their fragile nature startups are especially in danger during this time of uncertainty (running out of money is actually one of the major reasons reason startups fail). Experiences from the 2008 financial crisis have shown that VC activity slows down significantly during and after an economic crisis (e.g. Block, Vries & Sander, 2010), so the natural question arises: which investors are still actively investing during this time? In a great move this list was started by Phil Wilkinson in order to understand which funds are still actively looking for investments. …


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I spent the first three years of my career on the investor side, but having now been able to support fundraising efforts on the startup side has given me a lot of perspective on what is important especially during early investment discussions. This short post summarizes my top 6 learnings for investors and on “investor etiquette” in fundraising discussions.

1. Give a clear timeline

Most investors have regular deal flow meetings to discuss the startups that they’ve been introduced to over the past week(s). Make it a habit to tell the startup when the next meeting is in which you will be able to discuss the deal and when they can expect to hear back from you. It’s fine if you don’t have the capacity to talk about it in the next deal flow meeting, but only in the one after that. …


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With only 7 per cent of the world’s population, the EU makes 20 per cent of global R&D investments and has a leading position in global public R&D investments. It produces one third of the top 10 per cent most cited scientific publications worldwide. However, the EU does not manage to turn its scientific excellence into innovations as quickly as its main competitors. Science Business

Over the past few years, Europe has been catching up in terms of both size and professionalism of its venture capital industry. However, let’s not forget that we still see significantly less venture capital invested ($23bn in Europe vs. $130bn in the US and €92bn in China in 2018) and, even more so, relatively few startup success stories (as of February 2019, the EU only had 33 unicorns vs. the US with 151 and China with 83). …


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To set expectations right: at Speedinvest we invest in less than 1% of the startups that we take a look at (and that number even excludes e.g. the companies that we see at conferences). So, don’t be too disappointed if it doesn’t work out for this investment round. There are lots of reasons why an investor decides not to invest in a startup at a given point in time. …


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As with almost everything in early stage investing, it’s difficult to standardize what happens after the first introduction call between a founder and an investor. Generally, a Due Diligence process from early stage investors will involve some degree of understanding better the market you’re in (i.e. market research), the current stage of your business (i.e. analyzing your traction, checking your contracts) and you as founders (i.e. personal interactions), plus reference checks which give insights into all three of these areas.

Proof of traction and market research

Having established a basic interest after the initial call, the first thing we ask for from founders is for proof of traction. Here we expect a detailed spreadsheet showing the development of your company over the past couple of months (not only three bullet points). You can find great templates for a cohort analysis and financial plans (incl. projections) online. Have these financial docs ready — we expect you to be tracking your metrics already, so why would it take you 2 weeks to come back to us on this? …


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Whether you were introduced to an investor or you reached out cold: the real work for the investment round starts now. The following short overview of what typically happens during the initial due diligence phase at Speedinvest is here to give you an understanding of the first steps in an investment process.

Getting to a call / meeting

You’ll want to provide a quick summary to the investor of what you’re building and where you’re currently standing. Always attach a pitch deck so the investor can get a quick overview instead of having to read a lengthy email. Also keep in mind that investors look at several pitch decks per week, so try to keep it really short. …


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There are basically three ways that founders can get in contact with an investor (or vice versa): 1. the investor reaches out to founders, 2. someone from the network makes an introduction or 3. a founder reaches out to the investor directly.

We’ve run the numbers for ourselves and of all our current portfolio companies (over 80 that is), more than 80% (!) somehow came through our network, i.e. our portfolio companies, our LPs, a friendly pre-Seed fund or someone else we knew introduced us to the founders. In less than 5% of the cases we invested after founders reached out to us without any previous connection (i.e. …

About

Isabel Russ

Passionate about understanding things and changing them for the better. Here: writing about my experiences in the European VC/start-up world

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