Fundraising is both an Art as well as Science!

Fundraising is both an Art as well as the Science, and every founder/entrepreneur must quickly learn and adapt to it.


Fundraising as an Art


Founders should be able to sell their unique stories to the potential investors. Your story convinces the potential investors on each of the below factor:

  • What problem / pain are you solving? Is this really a problem? Why can't the existing players solve/address it?

  • How large is the your market size and its growth potential?

  • Is this idea really scalable?

  • What is your secret sauce (value proposition) of your product/service i.e. why would the customers pay for it?

  • What is your unfair advantage/s against the competitors as well as new entrants? How can you sustain it, for the next 5-10 years?

  • What is your go-to-market strategy?

  • Why are you, the perfect team to execute and make it BIG?

  • Many more..

Each of the above factor/aspect needs to be explained by the founder, in a compelling way. Remember, you only have about 90-seconds orally (elevator pitch) or max 3-5 mins to present your pitch deck to the group of investors (or VC partners).


Note: The art would work only when the science i.e. all the above factors are actually present in your venture. Missing out on 2 or more factors, means you aren't investable!



Fundraising as an Science


Investors are predominantly analytical (data-oriented), they would always evaluate the data/information, which proves or negates "your story" i.e. the art.


You also need to depict the supporting in your story:

  • Market size and it's growth potential

  • Traction (MRR/ARR) to prove customers are buying it

  • Price-unit economics, is it positive/profitable and how soon can it break even?

  • No. of Customers (incl NPS/Ratings, Retention), Key Partnerships, Network, etc.

  • Financial Projections (Roadmap of upto 5 years)

  • Funds Required and Usage, how the investors money will be used to scale-up?


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According to Paul Graham, the perfect recipe for fundraising, thus is:

  1. Identify the factors, which makes your startup worth investing in (i.e. science) and

  2. Create a great story, which convinces the investors to invest in you (i.e. art).


Role of Pitch Deck in Fundraising


First things first, "pitch decks only help you to get meeting with the investors!"

Seasoned investors use pitch decks effectively to understand all aspects of the venture.


Essentially, pitch decks either opens or shut the gates to fundraising. Now, investors have this unconscious dislike for the poorly designed pitch deck, before they even read its content. Hence, a lousy pitch deck does nothing, it either gets archived (in lateral terms tossed away) or at best, evokes a automated revert of, why you didn't make it.


Your Pitch Deck must be compelling i.e. effectively incorporating both the key elements i.e. art and science. This is why, most founders opt for business advisors like me to prepare pitch deck for them. Because, even the pitch decks with fancy graphics without substance, is no better than a lousy one.


Need help in crafting a compelling pitch deck for your startup from scratch? Click here.


Here are the finest two key examples, which are the most referred ones in the founders community i.e. AirBnb Pitch Deck and iPhone presentation, and I've provided the key insights to help you craft your own pitch deck!

 



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