Nakd Brand’s CEO Australian Justin Davis-Rice
almost fell out of bed - when he saw his struggling lingerie company’s NASDAQ share price going through the roof - “We were trading at a market cap of $US550 million and we had been about $US80 million the day before - on the verge of collapse
— Justin Davis-Rice, Bendon CEO”
A band of Reddit Investors came to the party to support the stock giving the Australian export a chance to shine
As one of Business Insider's"30 Women in Venture Capital to Watch,” Fran Hauser knows what gets her to open up her own wallet to help fund a startup.
Here are Fran Hauser’s 7 most common mistakes people make pitching their business:
1. Forgetting the investor is a human being. Yes, fundraising is about products and money and financial returns and all of that. But there is also the human factor, too. You're asking this person to join you in a potentially risky (and hopefully successful) long-term relationship. Since this is a human relationship—and not one solely with the investor’s bank account—trust needs to be established first. To do this, spend time learning about the investor ahead of your meeting so you can make a personal connection. I know I greatly appreciate it when a founder starts the meeting by referencing something about me personally. Remember, the investor is a human being, not a human ATM.
2. Not qualifying investors. The same way you qualify prospects for a sales position, you have to qualify investors too. Look for investors that, not only like your industry, but also have either previously invested in that space or have a personal affiliation with it. It’s important to know if they are actively investing at the stage you’re seeking funding for, because otherwise you’re wasting their time—and yours. Find out when the last investment they made was, plus how many investments they make annually. And it’s crucial to know their reputation as an investor and how they treat partners. Regardless of how much money they can offer, do you really want to work with a known jerk?
3. Lack of honest Q &A prep. A great salesperson always tries to anticipate what the objections, comments and questions are going to be. Develop answers to the five questions you hope investors won't ask. Where are the company’s vulnerabilities? What holes are still yet to be filled in? Why won’t the company turn profit for a year? Make sure you air all your personal concerns that keep you up at night and have data-backed reasons why those issues won’t be a problem in the future.
4. Too much jargon. You want the investor leaving the meeting thinking yours is an opportunity too big to pass up. That now is the right time and YOU are the founder who can make it happen. But you don’t want the investor thinking you’re full of BS because you load on inspirational quips and a giant vocabulary. Be authentic by providing actual numbers and real-life stories. These are things that investors are going to remember and will be able to easily repeat to their colleagues. Simpler is better.
5. Dismissing feedback. The companies in my portfolio that failed have one common thread and it went back to my initial meetings with the founders: They were quick to dismiss any feedback. You can still be confident, have conviction in your company, and run things they way you want, and also show that you’re coachable too. Being responsive shows the investor you’re open to ideas, just like any good boss worth their salt should be. Relationships are not one sided.
6. Lack of mindset. Mindset is everything. If you go into your fundraising with a growth mindset, it will make the whole process so much more enjoyable. Go in with your eyes wide open. There are going to be a lot of NOs, but if you turn each one of those rejections into a learning moment, you’ll enjoy the process a lot more.
7. Why does the world need another X? Another common mistake I often see is that the founder starts with a product description before they communicate the pain point or opportunity. Convince the investor that there is a need first and then follow up with how you are addressing that need with your next billion-dollar idea.
From seeing dozens of pitches from entrepreneurs every week, I've learned what makes a great pitch deck TRULY STAND OUT!
Here are five strategies to make your deck compelling and increase your chances so that investors can't say "NO" to you when you go out to raise money for your business.
✔️ Make it crystal clear what problem you're solving and how your business is doing that. The person on the other side of the table or the other side of the email you're sending the pitch deck to probably knows nothing — so you should make sure you're explaining things so clearly as if you were telling something to a toddler.
✔️ Clearly outline how much of the market opportunity you think you could capture. Whether that's a billion-dollar or two-thousand-dollar opportunity, be realistic and let investors understand your business's full potential. The right investor is going to be a little different depending on what the market opportunity is.
✔️ There are many teams out there that investors can back; why should they back you? What is the unique expertise that you bring to the table? Why are you the person to solve this problem?
✔️ Don't be afraid to be clear about what you don't know. Be open about the gaps in your skill sets or your team's and share how your advisors and other people can fill them in when you don't meet specific criteria. Investors like to see that you're not pretending to know everything in the game.
✔️ Establish a clear ASK in your deck. I've seen so many great pitch decks that got me excited about a company, but then they never specifically said how much money they were raising, in what increments, or how much the valuation was. Make sure you have a specific ask at the end of your deck so people know exactly how they can get involved.
Check out her latest YouTube video on this topic here. #pitchdeck #pitching #investors
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One of our investees who started in our office was a company called NewLease - that leased software to corporates.
It backdoored into a listed shell called Rhipe - and last week accepted an offer by
Global IT consultancy Crayon to acquire it for $2.50 per share or $402.7 million.
What an amazing story
SMEs are the backbone of our economy
and yet they seem to “be stiffed” by the banks!
To say that they are under-serviced by the finance sector Is an understatement
Investors - who invest in equity and hybrids (a mix of equity and loan are a great source.
Money that is not getting good returns need to find a home
There is money out there - but how do you
The $2m to $10m turnover range SME have the opportunity for exponential growth - and this is where The opportunity is!
The Banks
Most SME loans are currently secured by housing - lack of collateral is the most common reason for a business’s inability to access finance; 37% of all rejections can be attributed to this issue.
The Fintechs
For the last five years, so-called peer-to-peer lenders have connected investors and borrowers to provide more than $20bn in finance, faster than the banks ever could.
The Investors
Where to find them?
many are unsophisticated
The VCs invest - but not in many
Connecting SMEs with lenders and investors is a challenge – and beefing up risk assessment in the process is a requirement by the SME
SMEs, investors and indeed brokers are looking for viable alternatives to the banks, but not at the cost of security.
A broker’s job is not just to secure finance for a client, but to find the right finance.
Good advice and great financial management from brokers is crucial for the success of small businesses over the next 10 years
Who can relate?
Who needs money?
Whose keen to invest and play in this space
Let’s explore the opportunity
Inspired by https://www.marketlend.com.au/blog/editorial-the-true-role-of-the-sme-broker/
