Venture Capital Fundraising: Founder Guide

Last week Insurtech Gateway hosted a founder-led portfolio workshop around everyone’s favourite topic… venture capital fundraising. We thought we’d share the love and highlight the top 9 learnings on raising from institutional investors:

1. Do your Homework

Identify venture funds who are relevant to your mission and brand alignment. Go through their portfolio and see if any trends appear, have they written any content around your market? 

Does the Partner or team experience provide value other than capital? Will they provide insight or introductions you can’t get elsewhere?

Create your shortlist. 

2. Founder Intros

At Insurtech Gateway we review evey Founder who contacts us. Unfortunately this is not the case at all venture capital funds, so don’t underestimate the value of warm introductions. Build a strong network and leverage your connections, be focussed and targeted on your ask to make it easy to action.

❌ “Any VC’s you could intro me to?”

✅ “Saw you were connected to Jeff @ Rocket Capital, would you be able to provide an intro? Here’s a quick summary of the business if helpful!”

Avoid cold outreach where possible, find degrees of connection through investors and team.

3. Be Prepared

Before you start conversations with investors, get your data room ready.

You will need:

  • Financial model
  • Team background, reference information
  • FAQs
  • Market / Regulatory Analysis
  • Tech / Product detail

This will save you time by minimising repetitive questions and provides investors all the information they need for initial diligence. 

 

4. Always be raising?

This is hotly contested… But we believe it’s important to own your own timeline and not be pushed into a fundraise unprepared.

  • Not speaking with investors can create mystery
  • Fundraising is a full-time exercise, don’t do it half-heartedly

5. Rip off the bandaid

Every fundraise should be based on delivery of milestones, once you hit these metrics be ready to roll. 

The longer you wait, the more investors will be inclined to ‘wait and see’ how you continue progression – don’t let the goalposts move. 

Clear your diary. Zoom is your friend. 

Slow and steady doesn’t win the VC race, create momentum and push forwards as fast as you can. 

6. Confidence is key 

Own your vision. Have a roadmap to get there. Show investors the size of opportunity.

Check out our Template Pitch Deck to ensure you are covering all bases.

Don’t let one bad pitch change your mindset. Learn from it. You will know who your people are when you find them.

7. Lawyer up!

This is a large financial transaction. Securing venture capital funding is likely the biggest deal you’ll have done. Spend on quality legal support who have experience with venture and early stage financings. 

It’s also good for negotiation!

8. Invest in yourself

If you are raising a lot of money (Series A+), you need to be willing to spend in advance to get support on things like financial modelling and strategy development.

  • Know your unit economics inside out 
  • Financial model and forecasts
  • Find a business mentor (or therapist) who’s been through the process and can support you

9. Startup 101

Before you dive head first into raising venture capital funding, make sure you understand what raising venture money actually means:

  • Vesting & option pool
  • Investor consents
  • Board Control
  • Identify your red lines, what is most important to you and areas where you are willing to concede.
  • Make sure you can justify the valuation and show how it will get you to your next milestone.