1. Tell a story that speaks to a unique opportunity.
Investors look for opportunities where they can see the value where no one can. If they think that you’re one of the 100 people doing the same thing, how do they know that *you* will be the winner? Tell your story in a way that helps them see why you’re doing something different so that they can come in early to support you and make the outsized returns they’re after. — Eric Kelsic, CEO at Dyno Thereapeutics
“Your job is to convince the investors that your startup is a better bet than the hundreds that they will turn down this year”. — Bryan Mazlish, CEO at Surf Bio
2. You won’t be a fit for everyone.
“Investors often don’t pass because you have a terrible idea; they’ll pass because you’re not a fit for each other. Some passes are always going to be passes, so try not to let it become demoralizing.” — Nick Goldner, CEO at Resistance Bio
3. Keep doors open and don’t commit right away.
“If you’re in diligence with multiple investors and one of them gives you a term sheet, use the Fear of Missing Out to get as many term sheets as you can while telling the first investor that you’re considering their offer. You don’t need to accept that first offer, and you definitely don’t need to accept it right away. You need to do what’s best for your company, that is, building as much value as possible by increasing optionality. Investors respect this.” — Cheri Ackerman, CEO at Concerto Biosciences
4. Build the relationship before you need the money.
Be a stage ahead. If an investor can follow your development for a couple of years, it makes it a lot easier to raise the money when the time comes. — Chris Gardner, CEO at Sequence Bio
It’s never too early to start building connections with VCs. Ensuring that they have a longitudinal and positive evaluation of you as a person before raising money from them can be incredibly beneficial. — Joshua Young Yang, CEO at Glyphic Biotechnologies
5. Investors want $$$, not cool science.
VCs won’t fund your cool scientific idea. VCs will fund you if they think you can turn your idea into a billion-dollar company. — David Li, CEO at Meliora Therapeutics
6. Use every interaction as an opportunity to learn.
Even if you don’t come out of a partner pitch with a term sheet you will leave with valuable learnings that you can use to strengthen the business. — James Field, CEO at LabGenius
7. “Financing is a means to an end, not the goal itself.
The goal is to build an enduring, useful company for customers. Think about what’s needed to build that kind of company, and backsolve into the amount of money required to reach that goal.” — Ramji Srinivasan, CEO at Teiko Bio
8. Vet them as much as they’re vetting you.
“When talking to investors, your goal should be to create a relatively even information exchange. Ask them how their firm supports companies like yours and how they relate to founders. We had set a goal to have term sheets by the end of the summer, and we told each investor that.
This gives you the opportunity to see who is respecting your time and who is dragging you along.” — Cheri Ackerman, CEO at Concerto Biosciences
9. It’s not just about the science; it’s about you.
Be yourself and be willing to share your story, aspirations, and motivations, and not just focus on the science. I learned that early-stage investors are betting on you and your team. — Nabiha Saklayen at Cellino
My $0.02: There are 100s of reasons a VC won’t invest in you that you’re completely unaware of:
• bad memories of deals gone south
• internal politics
• conflicts of interest with other portfolio companies
• an investor’s unconscious fears and biases
Yet, founders will come up with 100s of reasons to make it ALL about themselves.
I see founders who want to change everything in their pitch after talking to only one investor—and without ever having received any direct feedback from them! And I go… how do you know???
There’s as much randomness in the fundraising process as there is in people!
How you deal with randomness:
• ask for direct feedback
• don’t change your hypotheses unless you have a sufficient statistical sample
• kiss a lot of frogs to find the prince
Oh, and all this randomness applies not only to an investor’s nos … but to their yeses too! You may think that it’s your bulletproof technology that got you funded… but is it?
Remember that investors are always taking bets… especially in an industry with 10-year lifecycles and 98% failure rates in clinical trials…
In the end, what will get you funded is your passion, your perseverance, your commitment to solving the problem you’ve decided to solve.
It’s your belief in your vision that will increase the investors’ belief in you.