You’ve Been Doing It All Wrong

“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” – Steve Jobs

The world is getting smaller and smaller by the day. Through the power of the internet and social media, it is easier now than ever before to connect with anyone that has an online profile. This accessibility, however, can be a double-edged sword. On the one hand, it can be an extremely useful networking tool when it comes to fundraising for your startup. On the other, the amount of garbage, noise and downright horrible pitches that are now bombarding investors’ inboxes, is at an all-time high.

In addition to my day job managing a hedge fund, I also actively invest in early-stage companies. I invest in exceptional entrepreneurs who are building great companies in industries ripe for disruption based on long-term structural trends. Every single day, I receive no less than 5-10  pitches from young, aspiring startup founders looking for money. Sadly, only 1% of the pitches I receive actually deserve to get a second glance.

Don’t be fooled by some of the big funding rounds you read about in TechCrunch each day. Raising capital is HARD. The days of waltzing into a VC’s office and securing a term sheet after a measly 30-minute pitch are long gone. So what exactly makes a good pitch? When it comes to asking for money, there are three simple things that you should master if you want to have a chance at fundraising:

1. “Stalk” Your Target – this is so basic that I’m almost embarrassed to include it, but you’d be surprised at just how many people screw this up. If you are a startup founder looking for investment dollars, you should literally be on the verge of stalking and knowing everything about your target investor before you send the pitch through. Don’t send a pitch for a hardware startup to someone who only invests into software, or asks for money from a VC that hasn’t funded anyone in years because he announced his retirement a few years back in a blog post that you failed to read. It takes time and effort to conduct deep due diligence but you can also use this to your advantage when personalizing your pitch email or cold call. Don’t be lazy with this one.
   
2. Nail Your Pitch – this is another basic one that so many get wrong and it mostly has to do with lack of practice or experience. Pitching is nerve-wracking but if you can’t get that part right (in English, see point 1 above on our background) then your audience will lose interest immediately, regardless of how good a founder you are or how brilliant an idea you have. Fundraising is all about your ability to sell yourself and your idea. If you can’t hack it, then hire a marketer that can.
   
3. Know Your Sh*t –  The entrepreneur should always know more about their product and market than the potential investor.  If you are aiming to be a practitioner in a particular space you better be prepared to know everything about that niche possible. What are the long-term structural trends that will serve as a tailwind to the space you are aiming to disrupt? Who are your direct competitors? Why is your team the best one out there to build this company? Nothing turns investors off more than a lack of practical knowledge from a wannabe entrepreneur.

It doesn’t take a genius to look at the current trends and come up with a brilliant game-changing idea.  Anyone can do that, but few have the patience, discipline, and grit to execute on these ideas and build a great company. The best investors always bet on the jockey (founder), not the horse (idea) and at the end of the day, it all comes down to convincing the investor that you are the right jockey to mount this particular horse.

LAST CALL: Need funding for your startup? My company Explorer Equity Group is partnering with StartCon (Australia’s largest startup and growth event) to host their Hong Kong pitch event for $ 1million dollars. The Hong Kong regional final will take place TOMORROW on October 16th, 2018 at Campfire’s Collaborative Space in Taikoo. In addition to seeing the best pitches, you will meet with some of the most reputable investors & entrepreneurs in Hong Kong.  I’ve got free tickets if interested in applying or attending hit reply and let me know.