How to target and attract the right investors

Fourth Day was proud to sponsor the MeetFounders Venture Capital Night which was hosted at the stylish The Ministry in Borough for the second time. Two panels of investment experts and a host of startups created an informative evening with networking opportunities. 

The panellists at the event were Srikar Karri, Prakhar Pandey, Ivan Wong, Dan Idhenga, Mario Alejandro Rojas, Louis Frach, Vasyl Matiy, Esmé Ara’resa and Jayshan Ratnakumar who all gave us insights into the mind of a VC as well as offering guidance for startups from the perspective of funded founders. Below is some of the advice they shared with the audience. 

Red flags. Investors are looking for reasons why they shouldn’t invest with you just as much as why they should. There are a few common, stand-out warnings that our VCs shared which have put them off investing in potential start-ups. Unrealistic expectations and a misunderstanding of the market immediately set alarm bells ringing. Claiming that you have no serious competitors whilst putting yourself head and shoulders above the rest, all “alone in the top right” of your own magic quadrant may be seen as an indicator of a lack of awareness and understanding of your own market. 

Green flags. You should be seeking customer feedback, good or bad. It demonstrates a willingness to learn and grow. And while VCs often focus intently on founders, showing that you have a great team around you is also important. VCs want to see that you’ve hired well and have good retention rates.

Honing your pitch. For early stage start-ups, emotion matters, especially where hard data is lacking. To get through to your audience effectively, you have to sell your vision passionately and paint a picture for your potential investors. This helps to empower individual VCs to become your advocates when they’re discussing your company with their colleagues. The start-ups at this event, Erisna, More Luxury Club, Valerie, Stance, and Oya Kitchens, were prime examples of impactful pitching. Another tip from our VCs about refining your pitch was to identify your ongoing conversations with investors that you may not see as the right fit for your company. These VCs offer an opportunity for rehearsing your approach so you’re primed to take advantage of the opportunity provided when you’re in front of the investors that you truly value.

Targeting the right investors. This is easy to say, but much harder to do. Research is key and time can be wasted with a broad approach that doesn’t single out the most appropriate investors for you. The panel gave a highly practical piece of advice to address this: find a database, like CrunchBase, that lists startups in a similar field who you wish to emulate, ideally a few stages on from your current position. Then, identify the investors who supported them when they were at your current stage. In just a few hours, you can have the details of VCs that not only have a track record of investing in your market at your level, but also who bring with them vital expertise in successfully scaling your business. 

Thank you to the experts for all the great advice and to MeetFounders for organising the event.