How do you get the best valuation and terms for your funding?

A little advice here ?? Too many founders mistakenly believe they need to raise capital to start their startup when they don't. In the early stages, focus on gaining traction in any form. There are numerous aspects of your business that you can set in order and set moving in the right direction without relying on venture capital. Don't fall into the trap of thinking you need to secure VC funding as a starting point for your idea or business.

I totally agree with this! Knowing your worth is important before you pitch to any investors so that you can be confident while speaking the value your product can offer to the customers and how much it can succeed in the market.

Knowing your worth is crucial to determining how you are going to pitch yourself in front of investors. Know everything like valuation, market growth and future expansion possibilities will help you get more tractions from the investors.

During the early days of developing my first startup, I constantly found myself wrestling with the concept of valuation. I had metrics, user testimonials, even some initial revenue. Yet, as I prepared for my first major investor meeting, I hesitated to pinning down my startup's worth. I decided to seek counsel & ended up grabbing coffee with Drew, a seasoned investor I'd met at a conference. Over our meeting, Jake said something that really resonated with me: "It’s not just about the numbers, it’s about the problem you’re solving." I paused and reflected. I am truly making an impact with my startup. With my newfound clarity & confidence in the traction my solution was gaining, I headed into my seed round & successfully closed it!

Also, be very careful when selecting investors that say that they are impact investors. Especially if you are a value-based start up (e.g. B-Corp) with a purpose that drives your strategic imperatives. This is because, if you choose the wrong investor, who does not align their objectives for the investment, to your strategic imperatives, you could find yourself in misalignment with your investor as you start to scale and grow. I have been involved in advising an entrepreneur that experienced this, which could have materially impacted her global fashion brand business. Luckily the investor settled out of court, repaired the financial damages that negatively impacted the fashion brand business, and paid all of the legal fees.

Investors review 1,000s of pitch decks every year. Often, the primary aim of the pitch deck is to pique enough curiosity about your business to secure a meeting for further discussion. Due to this, steer clear of the dull, conventional format that everyone else employs. Start your pitch with a slide showcasing your credibility and all the remarkable achievements you and your team have accomplished in your lives, especially as they relate to your startup. Offer the investor a golden nugget that entices them to continue reading to the next slide.

Remember the 3Cs; your pitch deck needs to be Crisp, Concise and Compelling - need to create interest in first few slides - less is more

Having interviewed 70 CEOs and Entrepreneurs, I found these commons in them: 1) understand your why 2) is there real-world problem-are you obsessed with your product and idea or is there a real-world problem? 3) Time-tested skills-time-tested skills are the ones that you already processes, they are also known as your "MONEY MAKING SKILLS". 4) Who is your target audience-it is a mistake to think that your target audience is everyone! you have to narrow it down to the READY buyers, those who are ready to pay for your solution. 5) How are you spending you money-this is key in every investor when they look at your pitchdeck. 6) Do you invest with your personal money? - show the confidence of you believe in your product. Hope this helps!

In our team, we review numerous pitch decks each month, providing founders with feedback based on how our network of investors would perceive them. A strong pitch deck is constructed to effectively address the fundamental questions investors have while being concise and direct. Recognizing that not all founders excel at creating pitch decks, it's advisable to seek assistance from friends and contacts. Collaborating with a diverse group of individuals for feedback serves as excellent training. Additionally, during the startup phase, frequent changes occur, such as evolving business strategies, new investors joining, and team expansions. To maintain relevance, it's crucial to keep your pitch deck updated.

Extremely vital, especially for new founders: seek advice. Don't hesitate to hire an experienced lawyer if you can afford it or seek mentorship from the community. Be cautious about relying solely on Chat GPT for this (!). Remember, the 'mistakes' you make in the early stages could stick with you indefinitely.

An important part of business valuation is Intellectual Property Valuation. IP is a whole different beast than business. Especially Patents being technology intensive, have numerous factors governing its valuation that do not apply to businesses. Therefore one must ensure that IP valuation finds a place in the realm of business valuation. Especially in technology rich businesses.

Absolutely, closing a deal is a significant milestone in securing funding for your startup. It is an exciting and rewarding moment, but funds may not all arrive at once. Many investors release funds in tranches based on the achievement of specific milestones. Additionally, certain venture capitalists may have hands-on involvement in the startup's operations. Some VCs may request frequent progress reports, which can be beneficial for guidance but also demand a significant amount of time and attention. It's essential to strike a balance between fulfilling obligations to investors and maintaining focus on driving startup's growth.

Don't underestimate the value in being able to share details of key advisors with industry relevant experience in your pitch deck. Being able to include a recognised industry "heavy hitter" in your pitch deck is eye catching and adds credibility to your proposition. And how do you get them to agree to be included. Simple. Ask them!