In the past ten months, I coached six Luxembourg-based startups in order to help them raise EUR 4 million, and we’re currently working hard on additional fundraisings, which could amount up to EUR 5 million, this year only. When it comes to fundraising for startups in Luxembourg, Entrepreneurs now know that they’ll find suitable fundraising advice and connections to investors, by (almost) simply knocking on our door at nyuko.
(Author: Nicolas Valaize, nyuko / Image Credit: Didier Weemaela)
The hard truth you’ll have to face when you raise funds is that we live in a world of accelerated returns. In the next ten years, technology will advance faster than it has in the past ten years. And the last decade saw technology developing faster than in the previous one. The direct consequence is that investors expect you to come to them armed with modern graphic design and a working demo. No more excuses, recess is over. I could find you ten brilliant graphic designers from around the world within an hour; I could list for you ten different mind-blowing online tools to make your mobile app come alive within an hour, without any coding skills required. The worst part of that reality? Everyone is doing it. Every team you’re competing against for funding is bootstrapping as much as possible, reaching investors even after their product/market fit and early traction.
Investors expect you to come to them armed with modern graphic design and a working demo.
Allocate the necessary time to work on your pitch deck, both content and layout wise. You’ll have one and only one chance to get an investor’s attention, before he/she clicks on that deadly delete button. Part of the process, at least with me on your side, will be to take your detailed “this is what I’m trying to achieve and all the complex things behind it” dozens-of-pages business plan and wrap it up into the sexiest and most frictionless 15-slide presentation ever. The aim of such a document is not to convince the reader to write you a check right away, but rather to close a first meeting with them. After a couple of face-to-face sessions at nyuko, I’ll be able to tell you exactly what’s important from your business and personal story to put in your pitch deck.
Do not waste time building a long Excel spreadsheet with plans to cold email them all.
Let me tell you why we need to do this right. Investors rarely, if ever, invest without discussing an investment with their entourage and/or fellow partners, often in a well-orchestrated weekly deal flow internal meeting. Go ahead and picture it as a scene from an old movie, where the big money guys gather to discuss important matters, smoking cigars and drinking whiskey, except without the cigars and whiskey part. If your pitch deck does not provide easy-to-remember and simple-to-replicate messages, odds are that your project will not even be mentioned around the table. Why would anyone—particularly a VC partner who is usually surrounded by bright minds—take the risk of looking like a fool by introducing something that he/she is not even sure to understand him/herself?
Another must-have in the fundraising process is getting the right introductions to the right investors. Do not waste time building a long Excel spreadsheet with plans to cold email them all. Instead, visit investors’ websites and identify the best contact for you to reach out to from within their team, trying to find a common connection you have with that person. Ask LinkedIn and your fundraising advisor for assistance. The connections both resources can offer will amaze you. At nyuko, for instance, we’ve carefully built strong relationships with dozens of business angels and VC partners over the past months, throughout Europe. Chances are that we’ll find you an investor that is outside of Luxembourg. And that would be ok. After all, didn’t some American startup called Uber recently have to travel all the way to Saudi Arabia to raise its last USD 3.5 billion round?
Entrepreneurs, I urge you to speak with a fundraising advisor before welcoming any kind of money from external investors. I have seen too many disastrous toxic rounds happening in Luxembourg—rounds with tricky terms that simply kill the startup from day one, without the founders even noticing until I meet them and start asking questions.
This article was first published in SILICON