“There is a misconception it is a one-time process,” says Marks, “but you should always be raising money. Building your company is an ongoing process and so is raising money — do both, all the time, and they will sustain each other.”
Marks is the CEO of StartEngine, an equity crowdfunding company with the mission to help entrepreneurs achieve their dreams. He shares his top six tips for stacking the deck, so whether you’re in a scheduled pitch meeting, or unexpectedly find yourself sitting next to the venture capitalist of your dreams, you are prepped to pitch.
Write a simple mission statement
Oftentimes a mission sounds like a strategy statement or tag line — it needs to be your company’s purpose and it should sound inspirational.
Make an eight-slide deck
Besides a strong mission, this is the second most important tool for pitching investors, they love a great deck and most importantly, a short one. The typical order is: mission, team, problem, market size, solution, go to market strategy, timeline and contact info. Use a large font; the less words, the better.
Build a financial model
Once an investor is interested, send them a financial model showing how the company will make money. Ideally, this should include a three-year financial projection and the assumptions in a simple sheet for easy reference.
Pitch friends and family first
There is nothing like practice and the best audience is friends and family. They might want to invest as well, you never know.
Get introduced to a venture capitalist
Make a list of your 10 favorite VCs. Start with your forum, then with your chapter, finally move on to networks to find someone who can introduce you. VCs almost never invest unless they are introduced by someone they trust.
Use the power of the crowd
Today you can raise money by going directly to those who are likely to use your service or product. Equity crowdfunding is growing. Choose your own terms and list your company on a funding portal.