Have you ever wondered what it takes to find investors and impress them? Well, who better to ask than leading VCs and angels themselves!

Earlier this week, I had the pleasure of facilitating an insightful panel discussion with four investors and founders at an event hosted by SeedLegals and Samaipata. It was a wonderful opportunity to not only meet face to face (something that I’ll never take for granted again!), but also to tap into the latest thinking from a very experienced panel. I want to share some of the things I heard to find investors and impress them so that you can take full advantage of their pearls of wisdom as you go on your funding journey.

Before we get into my key takeaways from the discussion, it’s worth explaining who the panellists were:

• Marla Shapiro, HerMesa

HerMesa is an angel syndicate dedicated to empowering women investors to support women founders. They prioritise investments with at least one female founder holding a minimum of 50% equity in their startup. Moreover, HerMesa actively engages with portfolio companies beyond financial support by offering board representation.

• Kirill Tashilov, Talis Capital

alis Capital, a London-based VC firm, comprises successful entrepreneurs who are passionate about backing visionary founders. They specialise in supporting entrepreneurs who challenge conventional thinking and envision a different future.

• Arnaud Bakker, Samaipata

Samaipata invests in digital platforms across Europe that foster network effects. They focus on technology that enhances human connection and interaction, making the world feel more interconnected.

• Daniel Sawko, Ship Shape

Ship Shape revolutionises the VC-founder relationship by connecting them based on shared interests rather than traditional metrics like sector or stage of development. Their platform facilitates deep connections, enabling founders to identify investors who resonate with their vision. Ship Shape has successfully raised £600K through grants and equity investment and is preparing to launch a £5 million seed round, with £2.5 million already secured.

Now, let’s explore the insights gleaned from the discussion. I’ve outlined key takeaways that startups seeking investment should consider. Additionally, if you’re eager to explore these insights further or have specific questions, feel free to reach out for a deeper dive at our Funding Strategy Workshop. Your journey to finding investors starts here!

Takeaway #1. How the founding team comes across is important

I asked the panel to think about their most recent investments and what stood out about the start-up that compelled them to invest. One of the clearest reasons investors invest is the founding team.

The panel stressed how important it is that the founding team are good at selling, and that the way they communicate their idea, vision and plan is important. They also look for traits in the founder(s) that demonstrate they would be capable of leading a fast growing, scaling business, such as inspiring people with your vision for the future, a willingness to adapt and try things different ways and the ability to lead a team, especially as the business and team grows).

Takeaway #2. Show current, or potential, tangible evidence of traction

Traction is undeniably important and helps evidence that the business is not just a good idea but has built a strong product that customers love. Although investors often talk about “traction”, it can mean different things to different people, so I asked the panel to define what it means to them.

• Marla explained how HerMesa has worked hard to define criteria that make their expectations clear to founders. She explained that for B2B propositions they require the startup to have achieved at least two paying customers, whilst for consumer propositions they look for 1,000 customers before considering an investment.
• The two VCs also agreed revenue is important but recognised it might not be the right criteria for some business models where engagement has to be secured before revenues follow, such as gaming. Instead, they pick a few key metrics and monitor the progress of these metrics over time. They are looking for a performance curve that consistently follows a strong upward trajectory. Engagement metrics like frequency and session length were offered as examples of metrics that, if strong, were likely to lead to revenue.
• All the investors recognised how hard it can be as founder to build strong metrics from a standing start. They recognise it takes time – and a good deal of trial and error – to “find the door handle that gets you out of the cupboard” when it comes to revenue and customer engagement.

If you want to explore what investors mean by traction, this blog explains how traction makes it quicker to raise investment.

Takeaway #3. Be clear and open about the size of the market opportunity

What was also clear from the panel is that the size of your market opportunity also impacts on what type of investor is likely to be attracted to your start-up.

The VCs said they use a portfolio approach to investing and require at least two of the businesses in their portfolio to have the ability to deliver a £5-10 billion business in order that the fund delivers the required return. Not all businesses are therefore suitable for VC investment.

Angel investors might invest in smaller opportunities, but they need to be able to see a credible exit, so that they know they can realise a return.

Reflecting on why investors had backed his own start-up, Daniel was very clear both the ability to portray the opportunity within the market and to demonstrate the progress you have made “traction” (see takeaway #2!) were both extremely important.

Takeaway #4. Do your research before you reach out

Our discussion touched on how to find and approach investors. There were two key watch words here: Research and Clarity.

Research

All investors – angels and VC – hate it when they are approached by founders who just haven’t done their research and – despite clear investment guidelines on angel syndicate and VC websites – founders apply who just don’t match the stated requirements. It’s a waste of everyone’s time – the investors and the founders. Daniel agreed that doing your research is paramount when looking to build relationships with investors whether for a current or future round. His company, Ship Shape, use long tail search data to reveal the interests of investors within venture capital firms making it much easier to find and then target investors who have a shared interest in what you do

Clarity

There was also a heartfelt plea from the investors for “clarity” when a founder makes an initial approach to investors.

The nature of the approach is less important than the message. The clear request is “don’t write an essay” but provide a succinct, clear description of the opportunity that anyone can understand. The KISS (Keep It Simple, Stupid) model certainly applies!

If you are not sure what information investors want to know, take a read of the blog the 7 Essentials that unlock equity investment.

Investors have a lot of opportunities pass their desk everyday – Marla vividly explained how hard it can be to keep on top of all the opportunities and how quickly a decision is made on which to explore and which to “pass” on. This mean they make also take time to get back to you and feedback may be limited. Don’t take it personally!

Persistence is key here. If you are sure there is a good fit, you may have to take extreme measures to get the attention of your perfect investor – even if that means camping outside of the investor’s offices in order to secure a conversation (which one member of the panel actually did in order to speak to the person they wanted to reach)!

My final thought

Time with investors, VCs, angels and founders is precious. So, I treat my time speaking with them, especially the panel from this session, as a gift. Hearing from people who back startups is an important way to know what they’re thinking, and how you can tailor what you’re doing to make an impact and maximise your time with them. I encourage you to see it the same, and take as many opportunities as you can to hear from other people and use what they tell you to inform your own approach.

I hope this roundup has been useful and given you some food for thought for your own funding journey.

Don’t forget, if you want to attract and impress investors, focus on

• Team
• Traction
• Opportunity
• Research

And finally, above everything, fortune favours the brave…and the persistent!

Good luck!

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