How can a startup increase its chances of investing when communicating with an investor?

    Hi, my name is Maria Podolyak, I live in the city of New York, in the USA. In New York, I collaborate with projects and funds, for example, Starta Ventures. After the publication in that I am ready to help projects with marketing when entering the international market, I am asked a lot of questions about investments, including. I decided to fix the common questions and delusions on Habrahabr.

    Question 1. Investor or accelerator? What is an accelerator, in principle?

    Entrepreneur estimates that in the USA there are more than two hundred accelerators, each with its own focus, history and specialization. The acceleration program, as a rule, lasts 3.5-4 months, includes trainings, workshops and individual sessions with mentors, they are also local American businessmen with experience, investors, local specialists (lawyers, designers, marketers). The entire intensive program takes place in the United States, that is, the correspondence version does not suit you. The full-time option is also not suitable for those who do not speak English, because all communication in accelerators occurs in English.

    Projects at the seed-stage of financing go to the accelerator, you also need a working prototype and at least some sales or users of the product. Sales always mean that customers need your product, the product is market tested, you do not waste acceleration time, and you can scale. Scaling means that you start selling more or attract more customers, or both the first and second. If you do not have a working product or sales, then you probably should not turn to accelerators, and even more so to investors. But you can contact your friends for money.

    Venture investor is the next stage after the accelerator. You have formed an offer on the market, started selling more, you need money for a large-scale marketing campaign and hiring local specialists. You already understand why you need money from an investor and can explain this in person in the fund.

    Question 2. How to get to the investor?

    First, forget about the ready-made bases of investors, do not send proposals to the database of 100+ emails. Investors in the United States have a specialization, by analogy with a specialist in the right and left nostril.

    Venture funds on sites describe their investment focus: industries, countries and stages that they are willing to consider for investment. Study this information before sending any letter. Have you developed a mobile application for young mothers? You should not send a letter to an investor who invests VR / AR money or biotechnology.

    In the US, there are various services that you can use to find a suitable investor: Crunchbase, Linkedin.

    For example, to search for a relevant investor on Crunchbase, proceed as follows:

    1. enter competitors in the search box (if you have no competitors, then you are not looking well),
    2. go to the company card, make a list of those funds and angel investors who have invested in them.

    You can also enter your market niche in the search box, for this you need to know how exactly your class of products or services in the USA is called. Use Google Translate, and then check if there is such a class of products in Crunchbase.

    Look for warm contact with an investor or fund, it’s an intro, it’s an intro.

    Investors value their time and talk to those who have spent their time and found a warm contact who will make a presentation to the investor.

    Question 3. What you need to know about the investor and take into account when writing a cold letter?

    1. Know investor specialization, know whether the fund invests in the early stages, or in more mature companies. In general, it would be good to figure out the difference between a seed and a round A.
    2. Do not ask to sign the NDA. An investor who receives a huge amount of pitches a day simply doesn’t make sense to steal someone’s ideas.
    3. Do not ask for money in the first sentence. The best way to attract investors, to interest him in the idea. Often, most of the answers are received by those letters that ask for feedback from an investor who actively invests in projects in your niche. About niche search and Crunchbase I wrote above.
    4. Hire a Native Proofreader on Fiverrr. Be sure to check all letters to the investor through the native English speaker. Yes, the United States is a country of immigrants, it is tolerant of accents here, when you sit at a bar and have a relaxed conversation in a subway car. But if you can not correctly correspond in business letters, then how will you sell your service? - A reasonable investor question.

    Question 4. How to choose which events to meet with investors to effectively attend, and which not? Is there any rule or how to understand that events will benefit?

    In the US, there are websites where you can find events suitable for you. Plan ahead, because in good conferences, tickets diverge in the months before the start. For example, the conference is already accepting applications from startups for May 2019.

    If your focus is an investor search, then such events as SVOD, TCDisrupt, frequent mitapes in accelerators are just suitable for you. For example, Starta Accelerator often invites investors to Sputnik Space in New York and invites investors.

    Question 5. What mistakes do projects most often make in a pitch deck? What do you advise projects to do / not do?

    • The presentation should be a slide Offer to the investor, what do you actually want and under what conditions?
    • Presentations use data about the market in which you plan to work. But they make mistakes such as, for example, you are making a SAAS service for accountants, but you use figures on the market for SAAS commercial products as a whole. Or do you plan to work in the US market, but use data from the market in Europe.
    • Often there is such that in the presentation there is no slide Contacts.
    • Work with formatting, use one font, hire a proofreader to subtract errors, do not make a presentation more than not twelve slides, if you need to attach something else to the letter, make an Appendix.

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