Going out to investors can be stressful for any company, whether in their seed stage or at $10 million in revenue. You need to know a lot of information before even thinking about speaking to a VC firm: how to get an introduction, what stage of your business is right to approach an investor, and how you should pitch your company, just to name a few.
To put all of the uncertainty to rest, three investors recently came together for a game-changing panel at mosaicHUB and Foley Hoag’s Women in Entrepreneurship series. If you weren’t able to make it, here is what you missed:
Heather Groat, CommonAngels
Heather typically works with early stage entrepreneurs in pre-seed and seed rounds.
Getting an introduction. “[Angel investors] are fighting to meet early stage tech companies; we make ourselves available as much as possible to meet you with entrepreneurs. It’s completely selfish on our part.” Great, so where do I start? “Go on LinkedIn and see who knows someone you want to know. Don’t be afraid to ask for that warm intro.”
Women’s Pitching Styles. While women are often extremely prepared, they don’t demand an answer before leaving. This isn’t always a good thing. “I have never been in a meeting with a man who let me leave the room without knowing what happens next. On the other hand, women rarely ask. You need to ask for it- force me to make a decision immediately because I won’t offer it up on my own if I don’t have to.”
Why Women Should Ask. Practicing your pitch with advisors, mentors, and even investors can help you tremendously for future meetings, but according to Groat, women tend to work through their pitches alone until they have it perfect. “You should pitch to anyone when you’re getting ready, and women tend not to do that. It needs to change.”
When it comes to the meetings themselves, have confidence that you’re more prepared than you think. “When women do come through, they are always more prepared [than their male counterparts.]”
Takeaway: Investors want to meet with you, and even if you aren’t ready to have a formal meeting with them yet, you can still practice your pitch and brainstorm with them in an informal meeting. The key is to practice your pitch as many times as possible to get it right. When you are formally pitching, push for next steps- never leave the room without knowing exactly what’s happening next.
Kaitie Donovan, North Bridge Growth Equity
Kaitie typically works with later stage entrepreneurs.
What she looks for: “There are a couple of boxes you need to check for us to work with you: we look for companies who generate north of $10 million in revenue, and more importantly, companies who didn’t need millions of dollars to get to that scale. Team is also really important.”
How to get there: Companies who don’t start off with venture funding have a few options. “First, they run a really lean operation. They also take advantage of other routes such as friends and family rounds or bootstrapping with revenue, because taking on large amounts of institutional funding in your early stage can really dilute a founding team.”
How to impress her during the first meeting: “Be prepared. Come in having thought about the top ten obvious questions you’re going to get. Having a clear, concise answer to all of them will keep my attention.”
Takeaway: Getting a lot of revenue without growth stage investors will be tough, but you can do it with a really lean team and a lot of determination to avoid losing control of your company. When you’re finally ready to approach a later stage investor, never enter a meeting unprepared (but hopefully you didn’t need us to tell you that).
Stacey Arrigo, Silicon Valley Bank
Stacey typically lends to companies at multiple stages.
Winning At Entrepreneurship. Lesson 1: Don’t fear failure. “Learn from Silicon Valley. People there celebrate their failures. Failures and lessons learned can also be attractive to investors or lenders when pitching.” Lesson 2: Keep learning. “Surround yourself with people who are smarter than you that will elevate you.”
How a bank loan can be more than a bank loan. Understand the concept of smart capital and take advantage of all perks that come along with a loan from banks such as SVB. “At SVB we have opportunities for entrepreneurs to network with other entrepreneurs and to work through their pitches. We take helping entrepreneurs very seriously.”
Why Women Aren’t Getting Funding. “I have depressing statistics. On the tech side, only about 5% of companies getting funded are founded by female entrepreneurs. Women aren’t asking. We wait to be prepared and then over-prepared before getting out there.”
Takeaway. First, make sure that you understand the concept of “smart capital.” It is in a lender’s best interest for you to succeed, so make sure you use the resources they give you to help you succeed. Second, don’t be afraid. Don’t be afraid to pitch. Don’t be afraid to fail. Just go out there and do it.