The past months have been intense and unpredictable. Startups all over the world had to find new ways to react to a changing environment, enhance their customer base and build partnerships.
To help the startups in the F10 ecosystem get ready for investor meetings, Maximilian Spelmeyer shares practical tips on the preparation, pitch content and meeting structure. Max is a senior investment manager at SIX FinTech Ventures, a 50 million CHF corporate venture capital fund that invests in early-stage startups that make a difference for the Swiss financial centre. “The scope of investment is concentrated in the DACH region and the EU –but opportunistic beyond that. Typical investment size is between 1 and 1.5 million CHF. We also start quite small at 250’000 CHF with the ambition to be an active and long-term committed investor, taking a role in the startup’s board and supporting future financing rounds”, Max explains.
With the corporate VC fund, SIX focuses on small and highly scalable companies that can grow on their own. A recent investment was the Zurich-based startup PXL Vision, with SIX Fintech Ventures leading a 4.6 million CHF seed round with the German High-Tech Gründerfonds, Arab Bank and well-known business angels. Another investment was granted to Yokoy (formerly Expense Robot): the F10 startup received a 1.7 million CHF seed round co-lead by SIX Fintech Ventures and Swisscom Ventures. PXL Vision participated in the F10 Incubation Program in Zurich while Yokoy was one of the post-seed startups in the first batch of the F10 Acceleration Program in Zurich.
Conduct a thorough research on potential investors to learn what they are looking for. “Many Startups loose time by contacting high numbers of investors without considering if it is truly a match”, says Max.
"Before the meeting, make sure you understand the investors’ strategy. This includes ticket size, geographical area, industry, stage, and investment thesis”, Max advises..
Many investment experts recommend working with no more than two VC investors. This increases the probability of high commitment and fruitful investor relations. During the first meeting, you should focus on establishing a relationship: “Most of the time, the investor has already had a look at your pitch deck before inviting you to the first interview which means there is an initial interest from the investor in your idea. Take the chance at the beginning of the meeting and ask why the investor was interested in your startup. This helps establish a deeper connection and learn more about your meeting partner’s intentions”, Max explains.
The heart piece of your pitch should be a demonstration of how your solution solves a problem and benefits the customer. “Do not deep dive too much on every feature of your solution”, Max recommends.
Relevance is key: show that your startup is addressing a current problem and explain how you are solving it. Nice-to-have products or niche solutions are often not relevant enough to receive VC funding. Once the investors recognize that you are solving a relevant problem, they will be more willing to invest in your venture. Technical details are often not decisive in the first meeting.”
Entrepreneurs who spent months exploring market opportunities, developing their product, and testing hypotheses should not assume that investors automatically have in-depth knowledge about their markets and the problem the startup is tackling. "Emphasize that the market is huge and link the driver of your business model that makes it scalable to the market", Max says.
Besides addressing the problem-solution fit, founders should include relevant financials, a sales pipeline and use of funds in their pitch deck. “It is not recommended to state a pre-money valuation in your deck as that might scare away investors before you had the opportunity to speak to them in person” Max states.
“For most investors, especially in early-stage deals, the team is the most important factor when deciding on a deal. Avoid losing the chance to convince with your personality.”
After your pitch, ask for feedback as true collaboration includes being open for other perspectives. An article by the platform “Entrepreneur” claims that many successful entrepreneurs “are not only good at sharing information and ideas, they are also often eager for the opinions and reviews of others and include the best ideas of others into their own thinking. While it may be possible to unearth a brilliant idea by yourself, getting from inspiration to implementation as a team of one is a very unlikely path.”
Especially in the first stages of founding a startup, it is essential to get feedback on your ideas from potential customers and investors. Identify the areas in which the investor could support your startup and add value. Regardless of whether it is a virtual or a physical meeting, you should always agree on the next steps before leaving. Following up on the meeting is crucial. According to an article on startup fundraising by “Forbes”, it is “almost impossible to receive a check after your first investor meeting. You will need to follow up and build a relationship with the investor so that you get to generate trust and eventually receive the investment that you are seeking.” Send your investor pitch deck and further documents requested during the meeting when reaching out to the investors after the meeting.
F10 believes that the fastest route to innovation lies in early collaboration between startups, incumbents, and investors. With the F10 Acceleration Program, we bring post-seed FinTech, RegTech, InsurTech and DeepTech startups together with major banks as well as insurance companies and provide introductions to investors.
Learn more about our acceleration program.