Peter K. Adams

Navigating the world of venture capital as you seek to raise funds for your business can be scary and confusing because of the high stakes. After you identify whether venture capital is a good choice of funding for your company, you can begin to seek out investors. When seeking venture capital, you need to know who the venture investors are and where to find them.

Your actions after you pitch to investors are almost as important as the preparation leading up to the pitch. Raising capital is very much about creating relationships with investors over a period of months. If you do a good job of staying in touch and communicating your company’s milestones, you’ll be more likely to secure your funds in the future.

Exit strategy is a controversial topic, but you must include it in your pitch deck. Many people in the start-up world insist that you cannot build a good company if you are constantly trying to find a way out of it. But venture capitalists (VCs) are interested in giving you their money for a short amount of time, five to seven years, and they’re obligated to return money to their limited partners in usually no more than ten years after the fund is established.

You must ask for investment during your pitch. Doing so can feel uncomfortable the first time, but keep in mind that investors spend most of their time with people who are asking for money. It doesn’t faze them; it’s part of their jobs. As part of the ask, you should tell investors the following information: How much money you’re raising How much equity you’re offering (for an equity investment) What interest rate and discount percentage you’re offering (for convertible debt) How much of the round has been committed What the money you’re raising will be used to accomplish How long the investment capital will last (your burn rate) How much money you will need overall to get to profitability Your ask should include an invitation for those in the audience to discuss the deal and the project further after the pitch.

When you finish giving your presentation to investors, you often have your last slide sitting on the screen behind you. Make this slide do more than just convey standard contact information. To make the best use of this screen, create a summary slide highlighting all the things that make your company exciting.

Nothing increases your attractiveness to an investor more than progress. Over time, if you can show that you are doing the things you said you would do, people will start taking you and your company more seriously. At some point, investors who were only mildly interested before will start to see you as a potential valuable asset in their portfolios.

Some presenters play video during their pitches to investors. If you have created a video for your product, you probably put a lot of thought and maybe money into it; as a result, you’re probably pretty proud of it. You may also feel like using a video will take some of the pressure off you in the pitch because the video gets the point across really well (you think).

Using technology during your pitch to investors is essential, but technology can be your best friend and your worst enemy. When your audiovisual system, slideshow presentation, and physical presentation work together seamlessly, you have the appearance of confidence and mastery. When you have a glitch, your presentation turns to an uncomfortable experience at best.

One thing to keep in mind is that venture capitalists (VCs) see deals all day long. It’s unlikely that your company’s warts are unique. They’ve seen it all. If you are brave, ask point blank what they think the weakest part of your company is. The answer may be very enlightening. Use this information to overcome obstacles that may be slowing or undermining your ability to secure funding.