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How to raise venture capital in a hybrid world

Alexa von Tobel has been on both sides of the table, here she gives advice for making your pitch even if you are never in the same room.

How to raise venture capital in a hybrid world
[Source images: kreatikar/Pixabay; Magnet.me/Unsplash]

When I raised capital for my startup LearnVest over a decade ago, getting on a plane to meet investors in person was a matter of course. Many founders have tales of their trips up and down Sand Hill Road, and war stories of missed flights and sleepless airport nights.

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I’ve now gone from the founder seat of a startup to the founder seat of a venture capital firm. I started the early-stage firm, Inspired Capital, just months before Covid hit. When fundraising was forced to go remote, we all honed our skills at building meaningful relationships over Zoom and learned how to do deep diligence from afar—writing checks into companies with massive visions without (in some cases) ever having been in the same room.

Today, it’s increasingly clear that getting “back to normal” will be a hybrid scenario, a new mix of in-person and remote that would have been hard to visualize just a few years ago. As we try to get our feet under us, I wanted to share a few tips with founders who are setting out on their fundraising journeys today.

Practice, practice, practice

Whether you’re pitching an investor in the same room or remotely, the nuts and bolts are exactly the same. You have a limited amount of time to sell someone on your vision and explain why you’re the best possible person to start this business. Take the time to practice and hone your message. My best advice: Ask your smartest friends or mentors to listen to your pitch and give you their toughest feedback. If you get the same questions time and again, you know it’s time to create a slide to answer them.

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Most importantly, know what setting you’ll be pitching in. If on a video platform, perfect the transition into screen-sharing your slides and make sure to enter the Do Not Disturb mode. Put some thought into your background: I always prefer to see authentic spaces over faux Zoom backdrops, so find a polished corner that works well on-screen.

If in-person, it’s OK to ask in advance about the room setup. In a high-pressure moment, it’s always worth trying to get ahead of any technical difficulties that might disrupt your razor focus.

Let your guard down

View fundraising as an opportunity to build relationships; don’t approach it transactionally. Your mission as a founder is to get to know potential investors, understand how they think, and explore how their fund operates. Once a term sheet is signed, you’re entering into a long-term relationship with them.

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There’s no need for a veneer of formality. Luckily, that’s not the world we live in anymore. When we back early-stage founders, we care tremendously about who they are as people. As our boundaries between work and home have blurred, you can open up and be your authentic self.

For example, don’t be afraid to share the parts of your business that are keeping you up at night. Instead of trying to say what you think an investor wants to hear, challenge them to have a good discussion and brainstorm with you.

Find space for deep work

At Inspired, we’re obsessed with the craft of early-stage company-building. Our favorite work to do with founders is deep-dive strategy sessions, where we work through a tough problem together. Pre-Covid, that would be as simple as inviting a company into our office and working together at an actual whiteboard. But in our hybrid world, making space for that type of deep work must be a more conscious effort.

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Choosing your venture capital partner is like entering into a long marriage. Overnight, you’re going to be teammates, and you will (hopefully) be so for decades as your company grows. Make sure to find the space to do strategy working sessions before you decide to go into business together. We’ve now done this virtually, time and time again, and know that it can be just as powerful over video when that’s the best option.

Look beyond your backyard

We’re no longer all at the same pitch events or networking sessions every night of the week, which means it takes an extra effort to build relationships in the VC ecosystem, thinking ahead to future fundraising efforts.

On the plus side, our hybrid world has leveled the playing field for fundraising. You don’t have to just look at the firms in your own city. You have an opportunity to pick your head up and think about what firm or investor is the absolute best fit for you, no matter where they are. Inspired’s portfolio includes companies across the country—from Boulder, Colorado, and Columbia, Missouri, to San Diego. Use this distribution of companies, investors, and talent to your advantage.

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There are always external forces at play when you’re launching a business, far outside of your control (I started LearnVest back in 2009, in the heart of the Recession—which made my business timely, but also meant a complex fundraising environment). None of us knows how long this hybrid world will last. But you can use this environment as a competitive edge: It’s never been easier to meet investors and build relationships across the country.

Alexa von Tobel is the founder and managing partner of early-stage venture capital firm, Inspired Capital. Alexa is a serial entrepreneur who founded LearnVest (acquired by Northwestern Mutual in 2015) and hosts a weekly podcast, Inc.’s The Founders Project.

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