Over the next few weeks, millions of dollars will be invested in entrepreneurial businesses and products. Will yours be one of them?
Did you know fundraising has seasons? The fall (September to December) is one of the best times to be fundraising (and the slowest season is January to March). Over the next six weeks, millions of dollars will get invested by angels and VCs in thousands of companies. Will yours be one of them? According to research, December is one of the best times to get funded if you are looking for the big bucks.
“Assuming a three-month fundraising process, the best times of year to start a financing process is in September, targeting a December close, when investment sizes are 15 percent larger than average and investment volumes are 50 percent larger.”
Along with traditional pitching to investors at angel groups or VC summits, you can apply to any number of pitch competitions. For a list of competitions click here.
I had the privilege of serving as a judge at the UPS Xport Pitch Competition last week, which awarded a prize of $10,000 in UPS export shipping dollars to the company with the best plan for going global. Founders pitched their business to a panel made up angels, VCs, and members of international business community.
As a judge, I got to channel my inner Barbara Corcoran from Shark Tank, and heard from 10 impressive entrepreneurs who were selected from the hundreds who applied. Four of the companies had women presenting, including:
- Ringly, a company that has integrated wearable tech and fashion jewelry. Picture this: your ring lights up blue when you’re at a party and Uber is outside waiting to take you home, or red if your babysitter calls. Ringly can also count your steps, distance traveled, and total calories burned.
- Electric Objects, a company that brings fine art into your home using a digital screen that allows you to constantly change out your artwork (so you could have Picasso on Wednesdays and Rembrandt Fridays!)
- Snuggly Cat, a husband-wife team that invented the Ripple Rug, a strong and durable, yet soft play space perfect for claws or teeth, but cozy enough for your cat to sleep in. The Ripple Run has already been purchased by thousands of cat-owners who want to keep their feline friends from scratching up couches and beds.
I want to highlight some of the hiccups and homeruns I saw, as I think we can learn so much from seeing other people pitch (I highly recommend you attend a pitch competition if you are even considering raising money to see the best practices).
1. Make sure you’re conversational about your finances
One woman who pitched was asked about her margins by a judge and answered “we don’t reveal our margins.” This made her look naïve since we actually do and should reveal our margins, it’s current revenues people sometimes don’t reveal. That embarrassing moment could have been avoided if she had sat down with someone who has pitched before, or an advisor who knows what kinds of numbers investors want to hear. Read more finance language in my blog You Don’t Need a Business Degree to Talk Finance. Make sure you can rattle off your run rate, gross and standard margins and anticipated revenues for the next 1-2 years.
2. Prepare for the unexpected
When one presenter was asked about which countries she would target first in her international distribution, you could tell the question took her by surprise. Her company sold intricately crafted bird homes and she answered, “Many countries don’t like birds—they eat them.” With a little preparation she could have just named a few countries where birdhouses sell well, and leave the bird-eating countries out of the story. Have someone ask you mock questions before you pitch so you’ll be ready for anything.
It’s always a good idea to get trained in the art of the public speaking, whether by a professional (optimal) or a friend who is good at it (know anyone who works in PR? They can help prep you). Learn and how to get what you want to say across, regardless of what is asked. If the honest answer to a question is going to highlight a negative reality, have talking points prepared that will showcase the positive.
3. Know your numbers
The husband-wife team really impressed me because they were able to rattle off their financial status quickly, succinctly, and confidently. The female co-founder knew what her profits were, how many units they’d sold (which was already in the hundreds of thousands), and which social marketing tactics were working really well for them.
Before approaching a potential investor, practice your pitch to get the three C’s right:
- Practice for clarity: ensure that your story is delivered clearly and in a way they can remember and easily retell it
- Practice for content: pay attention to the details of the story you are telling. Is all of the information relevant? Is your content concise? Less is more when pitching.
- Practice for confidence: your vision is only as strong as you present it. Have you worked with a coach on your presentation style?
- Practice for competition: what sets your business apart from the rest? Do you know your competitors? What makes your business invaluable to your customers?
Once reason I am bringing together women for the first Million Dollar Women Summit in March is because we will be able to run our very own pitch competition, where five founders will have the chance to pitch to a panel of top angel investors and VC seed funders. We are gathering funders who have an explicit interest in funding women entrepreneurs, so if you are raising capital, please apply!
Even if you aren’t raising money, consider joining 150 high growth women entrepreneurs and me at the Million Dollar Women Summit for a chance to change your game and change your future.
Good luck out there getting your funding on! And if you have a pitch coming up, remember my mantra – “Fortune Favors the Brave.” I’ll be rooting for you.
P.P.S. The winner of the UPS Xport Competition was Eric Sevilla, CEO of Gifly Bike which is a new foldable, electric bike that will be released in early 2017.