WHEN THE GOING GETS GOOD…TiE GETS IT ALL!!!
Capital plays a vital role in business, as all entrepreneurs must know. To help our members get a better grip on the mechanics of fund-raising, TiE Pune recently had a program where Vaibhav Domkundwar, founder and CEO, Better Capital – a fund that invests in start-ups, recently shared his knowledge for the benefit of the attendees. For those that could not attend or those who want to keep a record of it, we present in two parts, briefly, all the pearls of wisdom that he dropped at that meet. Part One:
WHAT’S YOUR BIG IDEA?
When you step out for fundraising, it helps you raise well when you can clearly articulate the big idea around your company. The big idea is almost never your current product at pre-seed, seed, or Series A, but what you’ll create over 10 years and what you will change. Every company is different, so you need to be very clear about your big idea. That’s Step One for successful fundraising, in my experience. This is also one of the biggest areas where I spend a lot of my time with our companies, even the ones at Series B. Nail your Big Idea, before you start our fundraising.
IS YOUR TEAM FUNDABLE?
Another important aspect. Is your team fundable? Venture investors bet on the best teams, and it’s a cliché that bothers many teams as they wonder if ‘best equals pedigree’. Well, you can wonder and bitch about it, OR you can figure out how to display that your team is fundable and unmissable. As founders, you have to know that “team quality is everything”. Ideally, you knew this at the start and ensured you partnered with top-notch co-founders. If not, then you still have an opportunity to create a team with “L1s” or “founding team members” that make your entire team package look really good. If pedigree is missing in the founding team, hire it in your L1s. If pedigree is missing, bridge it with deep domain expertise. And so on. But make your team so good, that no one can pass because the ‘team is A+’. And please be brutally honest about this. By the way, no one is doing this well, so even if you start today, you’ll be ahead of most others!
IS YOUR DECK GOOD ENOUGH?
When you start raising funds, your deck is everything – it’s that one thing every investor skims and creates a quick mind map and opinion and more. It’s also the one thing that is looked at far more than even your face 😉 So getting your deck right is 100X more important than what I see more founders do. If you google and pick up templates, you’ll definitely get it wrong. Those 10 sliders are table stakes. The best decks are incredibly comprehensive and cover every nook and corner of the business and your understanding of the levers of your business, backed by data and cohorts. You can break it into parts and use it in stages, but you will need a solid 30-50 slider that covers everything and every learning.
And don’t forget to “make it look good” – the look matters too, unless you are Steve Jobs.
Well, if you are Steve Jobs, you won’t need a deck, but you get the point.
A stellar deck goes a long way. Get it right!
HAVE A DATA ROOM
Data room? Data room feels like something fancy bankers do for founders for growth-stage rounds, right? Yes, that’s right. EXCEPT, it can be equally good or even better for founders raising early-stage pre-seed, Seed, and Series A rounds as well. It’s the repository of everything that an investor might ever request during a fundraising process. 10 out of 10 early-stage founders scramble to put together pieces of information that investors request as and when needed and create a massive time sink. Instead, create a data room for your start-up from the early days. Make it the most comprehensive repository of information that you’d need during fundraising – market research reports, trends, metrics, survey results, user testimonials, models, and more. Now, don’t go overboard and waste time — but create a data room to save time when your time becomes even more valuable. A comprehensive data room also says a lot about how structured founders are in their thinking. A Google Drive folder is good enough for a start.
NOT JUST BAR CHARTS
Do you have a ‘system’ for your metrics? Just bar charts are not good enough for a start-up, even at the very beginning. You need a ‘system’ for tracking metrics so that metrics are not an afterthought even in the early days. The system captures what you care about today and as you progress you can add new items to track seamlessly in your ‘system’ and it tracks the quality of your business in a comprehensive way. So, when you start fundraising, this system does wonders. Not only does it communicate how you work, it really helps investors understand your traction numbers far more clearly than just the basic charts. It’s really hard to do after someone asks for the details about your numbers. So just build your metrics systems from the early days. You will curse less during fundraising