6 Things Your Investors Want to See From Your Startup Right Now
Let’s face it, you did not have COVID-19 or a massive global economic shutdown in your 2020 projections. Take a deep breath and shake it off, because neither did the scrappiest startup founders nor any global CEO.
Luckily, as a startup founder, you are no stranger to the unexpected. So, with the same swagger you muster after every bump in the road, follow these steps to continue towards your capital raising goal.
1 - Communicate.
In a recent interview, How to Pitch to VC’s, Kim Seals of The JumpFund advised, “Don't be afraid to stay in touch and communicate with us. Just be transparent. If you're in one of those modes where you're just laying low, trying to survive right now, then let us know that.”
The startup community, especially the Atlanta startup community, is nothing if not collaborative. Let your investors and potential investors know how you’re handling this moment and in what ways you need assistance.
2 - Adjust Your Forecast.
If you haven’t already, it’s time to go back and update, at a minimum, your 2020 and 2021 financial projections. Investors are always looking to see if you have your finger on the pulse of the market.
Now, more than ever, it’s key that you do not show up telling yesterday’s story. As you work through your financial models, be sure to include several different scenarios. This process helps you create contingency plans for what could happen next and demonstrates to investors that you are prepared to thrive amid multiple market conditions.
3 - Adjust Your Valuation.
New projections can lead to new valuations which may not be a bad thing. Could an adjusted valuation, or terms previously taken off the table, be the negotiating chip you need to bring investors from the sidelines to your Cap Table? Don’t be afraid to work with a professional to determine the best method for valuing your startup.
4 - Get Creative.
Startups are about solving problems. Well, congratulations, because the world just got 99 more of them (at least!). Get creative and seize the opportunity. In a recent interview, Pivoting Through a Pandemic, Chrissa MacFarlane of Patientory said, ‘It really shows your ability to execute rapidly and really come up with a strategy that's still in line with your organization's values and mission.”
Keep in mind that pivots come in all shapes and sizes. Some startups are pivoting their technology to serve a new segment. Others are pivoting their marketing strategy to expand their audience and lay the groundwork for future growth. Stay true to what is right for you.
5 - Get Resourceful.
Have you explored all of the financial resources available to your startup outside of venture capital? The Payroll Protection Program and millions of dollars in grants are now available to companies like yours. Research the requirements and get to work applying.
There are also unique resources for your capital raise, like Republic.co. In a recent interview on the open investment platform, Cheryl Campos shared, “Republic allows startups to raise up to a million dollars in capital from anyone around the world.” Unlike traditional crowdfunding platforms, all startups featured on Republic are vetted and pass due diligence.
6 - Lead.
Communication and transparency are non-negotiables with investors. The same goes for your team. How are you supporting your employees, keeping them engaged, and building on your company culture? This moment will test and showcase your leadership like nothing you’ve ever experienced. Continue supporting and building your team, and let your investors know how the humans in your organization are experiencing this shift.
What your investors want to see more than anything is the truth. If you're struggling, say so. Perfection is long gone and compassion has arrived in spades. Raise your hand if you need help.
The saying that investors “choose the jockey over the horse” is true because of moments like this. There will never be another opportunity to demonstrate your leadership as powerfully as right now. Keep your mind clear and keep moving forward.