Timestamps:

4:03 - Is my company VC-backable?

7:04 - How to find investors

22:48 - What makes a good pitch deck

28:26 - Picking a bad VC

36:45 - Raising funds is getting harder

About Arijana Walcott:

Arijana Walcott is a co-founder and managing partner at DART Labs, together with former Swisspreneur guest Sophie Lamparter. DART invests in early stage startups from Switzerland and Europe and helps them test and scale their ideas in San Francisco. Arijana holds a Bachelor of Applied Science in General Management from HSO and previously worked as VP Innovation & Technology at Swisscom.

At DART Labs, she interacts with dozens of startups on a weekly basis, and during her chat with us she summarized some of the lessons she’s learned so far.

Is your startup VC-backable?

That depends on how fast you’re willing to go. The question in any investor’s mind, when deliberating whether or not to invest, is “Can this investment provide a return for the entirety of the money this fund has invested thus far?” If you’re not willing/able to grow your valuation 3x every 12 to 18 months, VC money is probably not the right choice for you. Growing at this rate is not the right option for every startup necessarily, but it is very much the type of thing VCs want. For instance, at DART Labs, Arijana and Sophie ask startups whether within 5 years they will be able to reach 50M in revenue, or be acquired for 50M.

Should you go for VC money or business angels?

That depends on the stage of your company. If you’re at a pre-seed stage, you’ll probably only be able to convince business angels. At seed stage, your investor pool might look like a mixed bag. From Series A onwards, you’re much more likely to captivate VCs, and may perhaps start relying more on them than on angel money.

How should you best approach a venture capitalist?

Make sure you’re able to reference a specific thing that has motivated you to reach out to them. You can mention something they said at a conference, which really resonated with you, or a company in which they’ve recently invested, that does something similar to what you’re doing.
Play with their FOMO (“fear of missing out”). VCs, Arijana included, very often fall prey to that dreadfully tempting emotion.
Don’t let the VC you’re talking to know that you’ve already talked to 30 other investors, if that's the case. Because if you have, and you don’t have any soft commitments yet, the VC may very well assume the fault lies with your product (and ask yourself: does it?).

Arijana recommends that you structure your fundraising timeline around upcoming milestones which impact your valuation. She also urges you to make sure you have enough runway. 6 months for fundraising and 7 months of runway… is a recipe for disaster.

What are VCs thinking about during the first intro call?

“Is this the right team for this challenge?”
“Is this challenge worth tackling?”

In future calls, you’ll discuss things like the business model, your sales pipeline, etc.

What makes a good pitch deck?

It’s never a bad idea to go with the typical, Silicon Valley-style, “10 slides, problem -> solution” pitch deck.
If your product is deep tech or healthtech, make sure to have your scientific research ready at hand.
If you have a strong sales funnel, include it in your pitch deck! Investors wanna know whom the great companies you’re talking to are.
When giving investors access to the data room, it’s a great idea to include a Q&A/FAQ file with all the questions other VCs have previously asked.

EP #55 - Thomas Brändle: Financial Advice For Later Stage Startups

Swisspreneur ShowBy SwisspreneurJan 22, 2020