There’s no doubt that asking people for hundreds of thousands of dollars to go into your product is a challenging task. Pitching for start-up funding is hard. But the reality is if we don’t pitch, then we don’t get money and there goes our dream. So, how can you pitch and secure the funding for your start-up? We spoke with two very different entrepreneurs to get their advice.
Renee and Andy Welsh are a Sydney husband and wife duo who launched online booking system Booking Boss in 2013. Renee juggled working a full-time job, kids and working on Booking Boss in her spare time to support Andy staying at home and working on the platform.
While the pair initially planned to bootstrap the start-up, a business coach encouraged them to start hunting for funding opportunities when the tourism sector began to heat up. Through their network of high-networth friends they managed to secure seed funding. This enabled Renee to leave her job and hire a small customer service team. From there things took off and the pair raised $2 million in a second round of funding.
Mark Deacon and Jake Robinson are two young Australian entrepreneurs. They built their company Superdraft from an architecture firm into a one-stop-shop for clients, helping them with design, drafting, engineering, surveying, construction and finance.
The business now has 6 offices in Australia and employs more than 100 staff. Last year, Mark secured $500,000 at a unique Think Tank that took place in Antarctica. While the money helps, he said it’s the combined wisdom and knowledge from the investors that has really propelled the business forward.
Top tips when pitching to fund your start-up
1. Know your product and know your why
Mark says Superdraft’s philosophy when they pitch is identifying an existing problem, providing what the solution is and explaining how their product is that solution. While Mark says rehearsing scripts before he goes in to pitch makes him more nervous, his advice is to know your product, what your goal is and what your plan to achieve it is. If you have a basic structure of what you want to say, the rest will come easily. But he warns to go in with an absolute understanding of your own business plan. If you are not confident in it, no one else will be.
2. Don’t go all in at once
Rushing it and spurting out facts and figures isn’t the best way to pitch, says Mark. Instead, he says build up to it. He highly recommends picking up Pitch Anything by Oren Klaff, a book that explains how our brains take in information.
3. Adjust your deck (keynote presentation) based on timing
Renee says you should have multiple decks to fit the time you have with an investor. “We have a 5, 10 and 20 minute deck,” she says. Ask how much time you will have with an investor and always leave time at the end for questions. If the investor asks many questions, pull out the longer deck, which gives more detailed information.
4. Don’t over value your business at the start
Renee says she got some excellent advice at the start of her journey and that was, “100% of nothing is still nothing, a small percentage of something is still something.” She says not to get caught up in the value and equity of your business, be mindful, but don't get too caught up. “At the end of the day you have to have faith that the investor has your best interest at heart, don’t get too greedy,” she says.
5. Make sure the investor is the right fit, it’s not all about the money
Mark says he and business partner Jake are extremely particular with who they let invest. “At the end of the day it’s not all about the money. I’ve found money is quite easy to get if you have a good product and a plan,” he says. Instead, he urges entrepreneurs to focus on finding the right investor who is willing to invest their wisdom, time, knowledge and connections.
Renee agrees. She says she was once told there’s dumb money and smart money, and there’s no point of getting money without the investor adding any strategic value for you. “Investors don’t just give you money, they can open so many doors for you,” she says.
6. Leverage your existing contacts and keep building relationships
Renee says she still speaks to the investors who she approached and who chose not to come onboard at the start of the Booking Boss journey.
“We speak with them and have been providing them with updates right the way through,” she says.
It’s these connections that have helped her expand her network. She says one particular investor who didn’t invest, connected her to 3-4 companies that he thought would be interested and who did eventually come onboard. But she also says you need to keep expanding your network on your own by going to as many events as possible.
“The start-up eco system and networking opportunities in Australia are phenomenal. Go to events at co-working spaces and get out there,” she says.
7. Being young is an advantage, not a disadvantage
When you’re young you can think you’re lacking experience and competence, Mark says. But he sees being young as an advantage. “It enables you to think differently. You haven’t built bad habits, you’ve been less influenced and you can look at things differently,” he says.
8. Always practice your public speaking and seek feedbackPublic speaking truly is an art form in the eyes of Renee and she encourages any entrepreneur to always practise. She has no regrets about any of her pitches and says it’s a learn-as-you-go experience. “People can be too hard on themselves. Work on improving every time, that’s all you can really ask of yourself,” she says. And to improve you need to ask feedback. She’s always found investors to be genuinely interested in helping her grow.
Both Renee and Mark have raised capital for their businesses in relatively short time spans and acknowledge this is not the typical scenario for many start-ups out there. However, if there’s one thing you take away from this article it’s to put yourself out there, build relationships and know your product back-to-front.
A big part of pitching is knowing your business and keeping an eye on your cashflow. Download this Start-up Cashflow Template to keep your finances in check.
Do you have any tips fund a start-up? Let us know in the comments below.