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25 May 2023

Startups… How can you seduce investors?

Beginners or confirmed entrepreneurs, believe in your project! Business angels or investment funds can support your development if you succeed in your presentation pitch.

Gone are the years 2020-2021 when a simple PowerPoint presentation could raise hundreds of thousands of euros. The time of trickle-down is behind us. It is now necessary to be patient to seduce investors. And for that, we will have to make yours the quote of the philosopher Epictetus: “Nothing great happens suddenly, since even the bunch of grapes or the fig does not.” So, yes you will have to row, sweat and always stay inspired, a fortiori, if you are a neophyte in the world of the new economy and mom and dad have no money or contacts.

LinkedIn an efficient tool

The first thing to do: subscribe to Linkedin. This is the essential tool that will allow you to contact the right person directly. Forget the phone and the assistant who will filter the calls. Be punchy! Make your message short and clear. Think of a catchy first sentence. Investors receive more than a hundred messages a day, so you have to stand out from the crowd by making a “custom” message. No question of copying and pasting your message. Find out about the business angels or investment funds you are targeting. Scan their DNA, their preferred field of activity, their balance sheet. The important thing is that your values match theirs. And don’t lose sight of this iron law: on average, only 5% of people will respond to you. Even crueller, out of this 5%, 95% will not follow up on your request.

Think international

Never give up! Your persistence will also demonstrate the strength of your project. If you don’t believe in it yourself…no one will.

For my first fundraising with my start-up, I had to wait almost three years! At the age of 30, I even had to go back to live with my parents and take a job in a fishmonger’s shop in Rungis, starting at four in the morning. My day was divided into two very asymmetrical sequences: handler in the morning, pulling heavy crates of fresh fish, and businessman in the afternoon trying to convince my contacts to support my projects. A double hat that is not always easy to wear, especially with regard to your family and friends who wonder if you have fallen on your head.

Hang in there and think big. Don’t limit yourself to domestic investors but seek out international business angels. Your country is not the ultimate horizon of your ambition. If your idea is good with a coherent project market, it will be, by nature, universal.

Highlight the quality of the team

When you have succeeded in attracting an investor likely to follow you, do not hesitate to meet him/her in person. To sell a project, nothing beats the distance, as we say today. The energy that unfolds between physical beings is rarely found behind the filter of a screen.

Above all, do not sell yourself. It may flatter your ego but it will be totally unproductive. No, what you need to put forward is the quality of your team, its skills, its complementarity, its creativity. Investors will be much more sensitive to this human dimension rather than to figures thrown on an Excel table.

Your interlocutors, with their experience, know very well that your company will evolve enormously over the years and that the initial business plan will be totally different a year later. Nevertheless, don’t neglect the projections and focus on one essential question: how will you use the money you will raise?

A rational relationship with money

Define your needs and determine what each euro will be used for. If it’s for a minister’s salary, don’t bother. On the contrary, put forward how much you have already invested in your structure to show that you believe in your project. And it doesn’t matter how much! Even if it’s only your 1,000 euros in savings, it will show your commitment.

Don’t get carried away

Don’t bite off more than you can chew. There’s no need to raise more money than you have to. Staying rational will make your project even more solid.

The biggest mistake many startups make nowadays is trying to raise too much money, too soon. In my opinion, the first step is to raise a maximum of 500,000 euros and to sell between 20 and 25% of the company’s shares. Qui va piano, va sano.

One last thing: if the deal goes through, don’t throw an expensive and flashy party. It’s extremely unwelcome, just like not giving news, from one day to the next, to your new partners that you have been over-soliciting for months. Becoming a successful entrepreneur is a long journey…

Romain Girbal is a French entrepreneur who cofounded two successful startups. Exclusive and IB2.