Insights
by Kaari Kink

Superangel’s Early-Stage fundraising guide

👋🏼 Hey founder, are you fundraising for your early-stage startup? I’m giving you a head start.

Fundraising is both art and science. There’s a certain practice that you can familiarise yourself with and as a result, avoid common pitfalls that could discredit your startup.

So here are some of the resources that might become handy when raising your Pre-Seed / Seed (and even Series A) round.

EARLY-STAGE Fundraising prep

Before you fundraise you should keep the below in mind.

Fundraising is most often not a 1-2 month sprint, especially in the current market conditions. You should estimate at least 6 months for the process so start reaching out early.

Your runway can either work for you or against you (graph below). Investors smell desperation: no runway = no leverage. And just like dating, you don’t want to come across desperate on your first date. So planning ahead is key.

Source: YCombinator

Tools for fundraising

  1. Pitch deck
  2. Fundraising CRM
  3. Investor pipeline
  4. Forwardable intro
  5. Dataroom

📌 PITCH DECKS

There are a lot of resources available to help you guide through pitch decks. Use them. Again, there are certain slides and information that is expected to be presented in your deck. This information should be presented in a concise manner that makes sense on its own, without having to present alongside. There’s little point to attach large reports or articles alongside the deck – most of the time we don’t have time to go through it all. And if it’s important, it should be in the deck. If you have existing investors, use them for feedback or find some founders who can help you.

As a starting point, read these:

PS! Design matters! Especially if your pitchdeck is the first impression you leave. So invest in design or use templates by Canva / Pitch. I’m sure you’ve experienced great UX and this made your experience much more enjoyable. The same with pitch decks.

Superangel receives tens of cold inbound requests a week from startups that we’ve never met before. It takes up to 5 seconds to formulate an impression based on a pitch deck. Not making sense of the pitch deck is the number two reason for not proceeding with the deal (first is no strategy match). But, I recently took a meeting with Biteful without having met them before because their deck just made so much sense.

✅ Quick DOs:

  • Use titles to tell a story. If investors only read the titles, they should get the big picture. After all, if you write “Market” on a slide that clearly talks about the market, you’ve just wasted important space to convey a message.
  • Make it mobile friendly. No small text / crowded slides.
  • Think how you present your team. Team is number one priority in early-stage investments. But pictures and titles say little of why your team is the right one to address this problem. Don’t be modest and show how your experience matters.
  • Design!

❌ Quick DON’Ts

  • State your valuation. Unless it’s determined by the lead investor of this round. Otherwise, you just shoot yourself in the foot by either proposing something way too high or even worse, too low.
  • Use clients logos who are not your clients – it’s easy to check
  • Not necessarily related to pitch decks, but be careful when you name drop all the investors you’re speaking to. It’s obvious if you try to create FOMO. And if none of these awesome investors end up investing then you’ve undermined your own strategy.
  • Set fake deadlines. If you’re closing the round because it’s oversubscribed and you need to move, then yes, communicate deadlines. But if you’re just doing it to make investors move faster, it doesn’t work. We often have other more mature deals in the pipeline that require work. We also like to do our DD properly so if we can’t make the deadline, we have to give this opportunity up.

FUNDRAISING CRM

Putting together your next round means you are likely to speak to 50-100 funds (yes, that many). This maybe an exception for your Pre-Seed round where some local funds might jump on board early on in the start.

Just like managing your client pipeline, managing the investor pipeline can make the process a lot more structured. Plus you’re able to easily share it with your current investors who can help you with intros.

You can consider the following tools to help with pipeline management (example stages Pipeline, Outreach done, Connection established, In process, DD)

  • Excel

Check out Helery’s fundraising cheat sheet as well, here.

INVESTOR PIPELINE

Once you understand how investors choose their investment prospects (which is strongly linked to their strategy), you’re more likely to approach relevant investors. If you take this seriously, a must read to understand how investors think is Secrets of Sand Hill Road: Venture Capital and How to Get It.

TLDR: We also have investors (limited partners) who have backed our fund based on a certain strategy. In most cases, VCs have clear geographical, sector, and stage focus. That means, we can’t go out there and invest into whatever lands on our table. As an example, if you’re a hardware company, you should not be surprised that you got a negative response from an investor that only does software. Therefore, understanding if your company matches the strategy of the fund, should be your first priority before spending more time with them.

Here’s a list of resources of VC lists and their strategies

Please bear in mind that these databases might not be regularly updated but are a great starting point.

FORWARDABLE EMAIL: Make it easy for others to do warm intros for youtive Heading

Warm intros are by far the best way to get your foot through the door. Your job is to 1) find the people that can open doors for you (LinkedIn connections are the first obvious place to start with) and 2) make it as easy for the investor to forward the information. After all, they’re spending their credit to help you.

This template on how to ask for VC intros by Raimonds Kulbergs should be a mandatory item in your toolset. It’s one of the resources I share the most.

The more facts and clear metrics you can share, the better. Generic intros don’t tend to do too well.

📌 DATA ROOM

When investors get more serious in investing in your startup, they start asking for more information, which is standard. Have them ready to make the process move faster.

Creandum just launched a Seed Data Room Template that has everything you need to be prepared for your fundraising, including metrics, financial plan, customer overview etc. You can’t avoid this, so use the resources provided to you.

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Superangel is an early-stage VC fund located in Tallinn, Estonia. We’re investing 300k-1M€ tickets into industry-defining technology companies in the Nordics and Baltics. We’re the backers of companies like Bolt, Veriff, Montonio, BOBW, and many more.