Raising capital is a critical step for early-stage startups – especially those in capital-intensive businesses like deeptech and medtech. To succeed, approach fundraising like a focused sales process that builds momentum and creates FOMO among investors. Here’s a step-by-step guide to help you close your next funding round with confidence.
Treat Fundraising like a Sales Process!
Think of fundraising as a sales cycle. You start with a wide pool of unqualified leads, then refine them through a structured funnel until you close the deal.
Why is a structured process needed? Consider this: to secure 3-5 investor commitments, plan to make about 75 pitches. To land 75 pitch meetings, begin with roughly 150 qualified leads, which could in principle be interested in companies in your industry and stage. And to find those 150 qualified leads, your initial list should include around 200 potential investors.
Fundraising can drag on if you lack momentum. By preparing thoroughly and executing a tight, orchestrated plan, you boost your chances of success before you run out of cash. Begin early – budget for 2 months of preparation, followed by another 3-4 months after starting the active outreach until you have the money in your bank.
Preparation is Key
Before reaching out, ensure you have everything in place: a high-level teaser deck, a detailed meeting deck, a robust financial model, and an updated cap table. In addition, you should spend the time upfront to set up a CRM system to manage your outreach and to build a full investor pipeline.
To stay on top of all the back-and-forth interactions, you will need some type of CRM-system in which you can systematically move potential investors through the different stages in the sales funnel. You might start with a collaborative tool like Airtable, but dedicated CRM-solutions can drive efficiency. These tools integrate emails, track follow-ups, and host your pitch decks, streamlining your entire fundraising process.
Before you start with the outreach, your investor pipeline should be ready. Identify potential investors and qualify them to make sure they have available funds and would be interested in your industry and company stage. Often overlooked is the effort to identify a channel for each of them through which you can generate warm introductions, rather than just posting your presentations on their online portals.
Organize Coordinated Outreach
Keep in mind that your key goal for the fundraising process is to generate momentum. So you need to make sure that your fundraising round has traction and that you communicate this through regular investor updates
Avoid diving into details with random investors you meet at random events. Without a clear timeline, such discussions often become non-committal and waste valuable time. Instead, schedule your initial pitches in parallel. Start with less-preferred (C-list) investors, then move on to B- and A-lists over a 2-3 week period while continuously refining your pitch presentation and materials.
Always be closing. At the end of each meeting, ask for their interest, confirm potential check sizes, and agree on the next steps. Flip the conversation by asking how they would contribute to your startup’s success. Follow up within 24 hours, confirm verbal agreements by email, and send regular business updates. Most importantly, do not let up until the money is actually in the bank.
Final Thoughts
Building an investor pipeline is challenging but essential for securing funding. By following this structured approach, you can keep your outreach organized, build momentum, and achieve your funding goals more effectively. Having an expert partner like Scale CFO Services that helps you to organize the process and to stay on top of all open tasks while silently remaining in the background can be a gamechanger.
