Tips for Raising Venture Capital Money

To help you succeed in raising money from Venture Capitalists for your startup, we asked startup founders and business leaders this question for their best advice.

Growth

October 10, 2022

Roman, CPA

What is your best advice for a Founder looking to raise money from Venture Capitalists?


To help you succeed in raising money from Venture Capitalists for your startup, we asked startup founders and business leaders this question for their best advice. From showing your vision and roadmap in terms of numbers to proving you have a strong team, there are several things that startup founders are advised to pay particular attention to, in order to make a strong case for winning venture capital money.

Here are a few tips these leaders follow to raise venture capital money to launch their startups:

  • Be Yourself
  • Know All of Your Numbers Inside and Out
  • Prove that You Have a Strong Team

Be Yourself

Venture Capitalists are looking for people they can trust, people they can believe will follow through with their plans and promises. It's a relationship, and they're looking to see if they can trust you to run the company, to do the right thing even when you don't have to, to be honest and forthright. So, be yourself above all else. Don't try to be something you're not. Don't pretend to know more than you do. Don't hide weaknesses. Show your true self, your true talent, your true skills, your true knowledge, and your true grit.

Matthew Ramirez, Founder, Paraphrase Tool

Matthew Ramirez, Founder, Paraphrase Tool

Know All of Your Numbers Inside and Out

When you are pitching venture capitalists, the majority of their questions revolve around the numbers. You must know your current and projected numbers like the back of your hand if you plan to land capital. This means you must have a clear understanding of your business model and how it makes money. Do you understand your unit economics? How much it costs to acquire a customer and how much revenue you generate from that customer. Make sure to have comparable numbers on your current growth trajectory and what that trajectory would be with the VC's investment. How fast you are growing and how that growth is financed. Have a clear understanding of the numbers for your market segment.  Other important numbers to most venture capitalist firms are your current or expected burn rate, your runway, your dilution. Finally have a clear understanding of your exit options and how you are creating value for investors and their return on investment numbers.

Shawn Ryan, Founder & Owner, Techtopia

You must know your current and projected numbers like the back of your hand if you plan to land capital.

Prove that You Have a Strong Team

Venture Capitalists love to invest in strong teams, but how do you show how strong your team is? The best way to do that is to create a team deck. This is essentially a deck that highlights each team member and their respective strengths. It’s a great way to show the value that each team member brings to the table. It also allows for a greater understanding of the team as a whole. By highlighting each team member’s strengths, you can show how each member works well with others. This is a great way to show how a strong team works together to achieve common goals.

Luciano Colos, CEO, PitchGrade

Luciano Colos, CEO, PitchGrade

Raising a round from Venture Capital? Bless you. While some days it may feel like you're solving a giant riddle that will never be solved, to other days where you may feel like you're on a mountaintop and nobody can stop you. From knowing your numbers inside and out to selling your vision to potential partners, when it comes to fundraising, there is no silver bullet to success. The key is to surround yourself with the best team possible, prove you are solving a big enough problem for VC to care about, and hone in on your sales skills. Surround yourself with mentors, advisors, and professionals who are looking out for your best interest. If you ever have questions about how to understand your numbers or present them to investors - reach out to us at howdy@fullsendfinance.com.

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