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5 tips for raising capital online – Selected

There used to be so many in-person events, pitch competitions, battles, and activities for investors and startups to connect. All the startup-oriented conferences would usually provide founders with such an opportunity – to meet the right investors & share their great tech-solutions.

These conferences created a perfect environment for a startup to showcase their business ideas for this eager audience that came to learn more.

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A captured moment from TechBBQ 2019

2020 has shaken every industry, reversed our know-how, and re-structured our values & priorities. As we are getting closer to a full year of the pandemic, one that closed familiar opportunities and challenged us to create new ones. It is not news that we all are getting tired of digital communication platforms such as Zoom, Microsoft Teams, LinkedIn – you name it.

Notwithstanding all the mentioned challenges above, I am a very optimistic person, and I always like saying – let’s look at the bright side. In this case, we need to see how we can use this time for embracing the digital transformation and the new rules of the game called virtual.

Online capital raising has shifted as well because of the global pandemic. Obviously, there were a lot of unknowns in this field, and these ‘unknowns’ led to what we have today – Startup Capital.

I’d like to share some thoughts and learnings, as well as feedback from our investors and founders provided after our event. The goal is that some of this knowledge will help you prepare for your next online meeting with an investor, what to be aware of, what to expect, what are the potential processes.

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Startup Capital – what is it?

Startup Capital is a Virtual Matchmaking Series event that was launched in June 2020 by TechBBQ and partners as a result of Covid-19 outbreak. It connects pre-seed, seed-stage, and series-A startups with investors through virtual facilitated matchmaking activities. The first June edition invited the Nordic Startups and Global Investors for an online matchmaking.

In our October 2020 edition, we were happy to have the Baltics involved as well, adding and including more promising startups and investors. This helped us to bridge the gap between the Nordic and Baltic countries and expand the project scope as well.

The goal of Startup Capital is to facilitate and curate efficient conversations between startups and investors to:

  • increase investment flow
  • enhance impact
  • align capital
  • reduce perceived investment risks
  • encourage continuous collaboration between investors and entrepreneurs and
  • to exchange financing and/or knowledge flows.

Project partners: byFounders, Silicon Valley Bank, Danish Business Angels, Danske Bank, Vækstfonden, Innovation Centre Denmark, Innovations Fund

Selection Process: The selection process was made based on startups’ and investors’ extensive applications, startups’ pitch decks, and the investors’ directions and descriptions of what they are looking for.

Key Criteria Matching and shortlisting the startups was based on:

  • Vertical
  • Ticket size
  • Broad category
  • History
  • Own knowledge and network

Platform: For us, it was essential to have individual meetings and ease of  welcoming new conversations, as we are talking about a large number of customized meetings. On average we had 5 meetings per Investor and in total over the last 2 events we had nearly 500 meetings arranged between the Startups and Investors.

We chose Hopin.io, and it went quite smoothly despite some technical challenges. This platform allowed us to set up the session rooms for Investors and Startups and had an easy navigation between the two.

After organizing our first event, we realized how important it is to record an informative demo video, explaining and navigating the platform.

However, the key challenges were related to the sound and video. For some founders and investors, technology was on their side. Our solution was proposed prior the event – setting the right expectations. In cases where something does not work – move to an external meeting room via Zoom or any other channel.

For the future, we will have to look for a more practical solution on how to avoid this situation.

How to draw attention?

I have two pieces of advice: seek opportunities to connect with Investors and continue strengthening your online brand presence.

Startup Capital provides you an opportunity to connect with at least 3 potential investors with little effort. And those 3 investors know at least 1 more investor to connect you with if they believe in your idea but cannot invest.

So before you even get a chance to perform your pitch, there is quite a road to travel. Make sure you have an existing online presence, as well as a clear value proposition working in accord with your business plan.

In 3 words: prepare your brand.

Do your homework

Go with the right intentions and once you have your meetings scheduled – research your potential investors. Review their portfolios, ticket sizes, and investment activities.

The more you know, the easier it is for you to steer the conversation in your favor.

Set the right expectations for your capital raising journey

Expect the best but be ready for the worst. As one of our startups said:

‘’It’s never going to be a perfect match, or all matches ideal. But we are learning with every meeting and grateful for an opportunity.’’ – Startup Capital 2 participant, Founder.

Every time you pitch your business to investors, imagine that it’s a performance where you keep your personal feelings aside, throw away your doubts, and share your business and passion, inviting investors to join you on this journey.

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A captured moment from TechBBQ 2019

For some founders, raising capital is a fast and successful process. However, that’s not the case for everyone.

‘’No matches yet. That’s completely normal by the way. We invest in roughly 1/100 of the companies we see.” – Feedback by the Startup Capital 1 participant, Investor

Some reasons for passing on investment:

a) Purely for math reasons. It’s essentially a 1/50 or maybe even 1/100 chance whether we invest in a given company (especially through matchmaking where we have not screened the companies ourselves). So with the volume of 5 companies, it’s quite likely that none of them will be the perfect fit.

b) Then again, the world is not just math. You can also say that those 5 companies were not the ideal startup teams we’re looking for. They perhaps were tackling a market too small, the team was incomplete, or the founding team was not yet fully committed. There was no significant technology or IP included in those startups. It’s a different case for every team, of course.

So, we can see that the road towards your first investment can be long and challenging, but when you are looking for the right investors – get to know them; their portfolio companies, values, and directions.

Practice makes perfect

There is no golden ticket to raise a fund, but by practicing and participating in other events that include raising capital, you get a chance to observe what the judges, usually investors, are looking at, what the key comments are, and what types of questions they ask.

And if you can’t attend such meetings, watch previous events online. Rehearse and be authentic in every meeting. Learn to listen to what your potential investor asks and what they are looking for.

Pitfalls of online investments: what to avoid?

Since everything is happening online, there would be 2 pitfalls to avoid:

  • Do your homework and learn about the people and VCs or BAs you are having a call with
  • Ensure a good technical setup for your calls with investors. The first impression counts.

One of our Nordic Investors, who participated in both events, says:

‘’Double-check your wi-fi and learn how your camera and audio settings work. You’ve got one chance to create a good first impression, and – consciously or not – weak connections and your forehead on camera tend to leave a poor impression. Instead of technical hassle, you want to be able to focus on the actual beef: you and your company.’’ Startup Capital 2 participant, Investor.

I hope this event analysis and a couple of suggestions helped you think about what you can improve on how to increase your chances of raising your next round.

Now it’s time to get practising, because these three events are coming up soon. See you there!

  • Seed Round Investor Panel + Startup Pitches – November 19th
    Pitch to a panel of seasoned investors, and learn what and how they like to invest! Maybe it’s a good chance to practice your online pitch?
  • A Round Virtual PitchForce – December 4th
    PitchForce is a weekly event for early stage high-tech startup entrepreneurs to get a chance to deliver a 4-minute elevator pitch to a panel of seasoned angel investors. One more opportunity to practice your pitch and get some feedback.
  • MyData Online 2020 – December 10-12th
    MyData Online 2020 Conference will be feature more than 150 high-quality presenters from all around the world to share their expertise. Learn about purpose-driven data use, data governance, and much more.

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