• Tuesday, March 19, 2024
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Startup fundraising: Just how many pitches make too much pitch?

tech startups

In a bid to attract more investors to meet a set funding target, many tech startups often have to prepare a lot of pitch decks, in the hopes that if investor A does not come through, investor B or C would. There is also the hope that the pitch deck will be good enough for all three investors, thereby necessitating closure of investment faster than expected.

But can too many pitches have a negative effect on a funding campaign?

Iyinoluwa Aboyeji, co-founder and former CEO of Flutterwave made an interesting tweet on Tuesday, 11 June 2019. Addressing entrepreneurs, he noted

“sometimes it seems fundraising isn’t going well because you haven’t spoken to enough people. For @Flutterwave seed round even after one fairly successful business and a stellar demo day for performance I had to pitch over 300 investors and converted 100+.”

Although pitching your business is a different skill from running a successful business (not all successful business pitches went to become successful businesses), it is an important skill to have as a founder, especially if you intend to raise capital. Failure to attract investors could often mean your startup will face serious difficulty scaling up and achieving wide-spread success.

It is equally important to acknowledge before you set out to pitch your business that you are going to meet different investors, all with different backgrounds, levels of experience and expertise. Hence, what will work for one may not necessarily work for another investor. In other words you have to be extra prepared to make more than one pitch.

Aboyeji recommends pitching to more people “and don’t be too picky about the money (provided you have the control).”

The more investors know about your business the more visibility you create for your brand – assuming you do not get the money eventually. More important, the more investor you pitch to, the more confident you become in selling your business.

Victor Asemota, Africa partner at Alta Global Ventures, who was one of the early investors in Aboyeji’s startup, recommends having “a close cordial relationship with as many investors as possible.”

For early stage startup founders, taking time to research the investors you will be pitching can never be overemphasised. While in the research process pay attention to the unique attributes of each investor, like what sector and stage of investment do they typically invest in? Have they invested in any company that is in your sector before? It is estimated that reviewers at top accelerators and early-stage venture capital firms see hundreds of pitches every day, generally only for about two minutes. Thus, can you pack all that you have learnt about the investor and fund in a two minutes pitch?

One expert suggests keeping simple bearing in mind that investors are inundated with investment proposals every now and then. Clearly outline your business idea as fast as possible and you plan to offer investors a return on their investment. Make sure you stay within the time allotted and pace your presentation in such a way you are not forced to rush to finish it to meet the time.

Don’t sell yourself short. A display of confidence and measured presentation shows you probably know what you are saying.