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.

I find myself repeating the same things in calls with founders, and whilst it’s okay to mentor founders in the early-stage regarding fundraising, there are pitfalls that you can easily avoid in the first place.

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

 FUNDRAISING CRM

Putting together your next round means you are likely to speak to 50-100 funds (yes, that many). 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

Fundraising is both an art and science. 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 who have committed to our fund based on a certain strategy. In most cases, VCs have clear geographical, sector, and stage focus. We can’t go out there and invest into whatever lands on our table. As an example, as 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.

I personally prefer if these are written in a neutral tone. If I think the company is strong, I will comment on it myself. But I almost always delete the part when founders themselves write it in the blurb. Having an obvious statement of “This amazing, fast-growing company…” is not what gets investors interested. Or, if fast growth is what sets you apart, the least you can do is to back it up with numbers.

📌 PITCH DECKS

There are sooooo many resources available to help you guide through pitch decks. Use them. It’s so unfortunate when companies do it completely wrong. It shows that you’re not resourceful. If you have existing investors, use them for feedback.

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 mean one can argue, if you can’t design a pitch deck, what’s your product’s UX / UI like?

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 pitch deck. Having no logical storytelling is the number two reason for not proceeding with the deal (first is no strategy match). But, I recently took a meeting with a young, energetic team of 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 please.
  • 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 please don’t 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. If I’m closing other deals and you say I supposedly have a week to do DD to your startup, I’ll just pass.

📌 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 100k-500k€ tickets from our fresh 50M€ fund into industry-defining technology companies in the Nordics and Baltics. We’re the backers of companies like Bolt, Veriff, Starship, Montonio, BOBW, and many more.