6 lessons from raising millions from investors

When I was first raising money for my startup I was still in university and didn’t have a clue how to build a pitch deck or talk to investors. I was just a passionate maker who wanted to help people with the same problems I had experienced. Until that point, that had worked out well for me, and I could grew the business from our own profits without and needing to take any outside money.

Then suddenly, there was a lot of interest from potential buyers and investors. I thought to myself: Why not take some money and grow even quicker?

I didn’t know at that time what it takes to successfully raise money for your startup. I created a boring and simple pitch deck and talked to three or four investors without practicing for tough questions at all. Unsurprisingly, I didn’t get the investment and had to start all over again a year later. At that time I had already grown as an entrepreneur and got way better at fundraising because I knew exactly what the investors wanted.

Fast forward to today and a lot has happened. I scaled the company to millions in revenue, bought another startup, became an investor myself, and most importantly have helped hundreds of founders raise millions for their ideas.

Believe it or not, I never stopped making mistakes down the road, and thus decided to share my top lessons with the ProductHunt community. Although these lessons are mainly targeted at startups that want to raise money, there is also some wisdom in it for the indie hackers in the community.

Like any human, investors love a good story. You may think that you don’t have anything to tell but that's not true. Your story is what brought you here. Make sure to recount how you came up with the idea for your startup, what excites you about the topics, and how the world will look if the things work out as you imagined them.

This is one of the main lessons from my early years. You as a founder are responsible for running a smooth fundraising process. But what does that mean? It means you prepare great materials, practice for the pitch, and then finally decide when to contact the first investors.

I believe the main trick to fundraising is to talk to a lot of investors at the same time. Thereby, you create some fear of missing out. They will decide if they want to invest or not way faster and, in a best-case scenario, that also enables you to negotiate better terms and choose investors you truly want to work with.

I built & launched a Notion Fundraising Template some time ago to manage this whole process, including a CRM for tracking interactions with your potential investors, and moving them down in your funnel to close them.

Based on my experience, the whole process from starting to prepare your material to signing the final term sheet takes from 1-4 months.

Although it is just a presentation, your pitch deck is an integral part of your fundraising efforts that can decide your company’s destiny.

I always start by creating the content for the pitch deck. Think like an investor. Ask yourself: ”What would you expect from a pitch? Which trends drive the business? What is the main reason to invest? Is the team capable of doing it? Is there any traction yet? What are the risks?” Thinking about these questions helps you to include critical information.

After I have created the content I work on the design. You can use a Pitch Deck Template or another tool of choice. Statistics say that you only have 7 seconds to gain the attention of an investor. It’s a no-brainer that your deck has to be stunning for that, so don’t skimp on your deck design.

(Note: I think pitch deck templates are a great way to map out your content quickly in the right structure, but make sure to adjust them to your brand identity).

For me, it was also a good idea to get inspired by other pitch decks. When I was looking at the decks of Airbnb, Uber, and co (Pitchdeckhunt is a collection of 150+ real pitch decks) I tried to understand what kind of story they wanted to tell, how they structured their slides, and what kind of metrics they decided to include.

I have gone into a pitch without thinking about potential questions or even practicing the slides. It went horribly wrong because there were areas of my business that I had not really thought about yet.

I can only encourage you to take time and practice — it will pay out hundreds of times. Do peer pitching exercises with your friends. Invite them and colleagues to hear your pitch. Everyone listens without taking notes, then change roles and have your friends deliver the pitch. This allows you to understand which information stuck and where you have to improve your storytelling.

Besides that, I collected over 200 real investor questions to help makers with investor pitch training. You can use it to randomly pull a question around your pitch or business. Practicing can help you refine your pitch and your real business.

You will be rejected – a lot of times. Even the biggest companies today have been passed on by investors.

Although Investors are wrong a lot, they are still smart people and have a great sense of possible problems with your idea. Claim as much feedback as possible, during and after your pitches. This valuable feedback helps you refine your business and pitch deck.

Ultimately it is not uncommon for entrepreneurs to have a completely different and way better deck at the end of their fundraising efforts.

The last and final lesson is about network & reputation. 99% percent of cold outreaches to investors go wrong. That’s why it’s so important to have a network of people that can connect you with the right potential investor. A good way to build such a network is to surround yourself with other founders since they may have already spoken to investors or already have them on their cap table. An intro from another founder is always a strong sign.

Another way is to be active in communities like ProductHunt or Twitter. If you are building in public and tell the world about what you are up to, investors will find you quickly and want to talk with you.

That’s it for now with my lessons from raising money for startups. I hope these experiences will help you down the road. Let me know if there is anything that’s unclear or what lessons you’d like to see from me.

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