3 Things Entrepreneurs Should Focus on Before Investor Meetings

The saying “you never get another opportunity to establish the first connection” has suffered because it’s valid. That is why it’s critical to tirelessly plan in front of financial backer gatherings, particularly in these three regions.

Ponder how much cash you genuinely need
The expense of building new companies has dropped significantly throughout recent years. I regularly see first-time business people looking to raise more considerable than-required amounts of cash for their pre-seed or seed adjusts, which diminishes the number of financial backers liable to contribute. They’re attempting to fulfill what could be various rounds of financing all at once. Or on the other hand, they’re representing jobs in their arrangement that aren’t appropriate for their present stage -, for example, employing colleagues or sales reps during item improvement.

Private supporters prefer not to be first. Assuming that you’re raising $2 million, a financial backer trying to contribute $50-$100K is probably going to ask the amount you’ve raised until this point. If the response is low, they’ll presumably let you know they’re intrigued; however, request that you return when you have $1.5 million raised. As you drop the sum, you’re chasing. This becomes simpler.

For most first-time business people, your story should peruse something like this:
• I’m looking to raise $X to subsidize item improvement and the development of fundamental pieces of the business, including the site and beginning go-to-showcase framework.
• I’ll begin once I get $X; however will keep raising money.
• As we approach the satisfaction of our underlying achievements, we’ll start fund-raising to market the business.

Research financial backers, and afterward research them once more
Since financial backers will need to realize the amount you’ve raised, you will need to follow financial backers in fast progression. You need term sheets lined up, so you don’t need to tell a financial backer you’re looking out for other term sheets to come in.

However, you would instead not center exclusively around financial backer amount. It’s similarly critical to have countless thoughtfully paired financial backers, as well. Before you connect, read their blog and tweets and whatever else that may assist you with seeing how they think.

Likewise, you’ll need to determine what stage they put resources into and assume your organization is a solid match. Assuming they show an inclination for organizations with network impacts or item drove development, ensure you’re adjusted there also.

When you have gatherings with suitable financial backers set up, keep getting your work done. I propose you spend no less than 30-an hours exploring a financial backer before each pitch. Attempt to expect their inquiries, intuit what they need to hear, and consider their complaints. So, do all you can to deal with any possible explanation somebody would not have any desire to contribute. Avoid any unnecessary risk.

Regardless of whether you understand a financial backer isn’t ideal for you, gain as much from the discussion as possible. Inside your initial ten gatherings, you ought to have a superior handle of what changes you’ll have to make your pitch.

Set up a SAFE understanding
I suggest you come into financial backer gatherings with a predefined structure. Nowadays, that is a Simple Agreement for Future Equity (SAFE), which was created at Y Combinator.
SAFEs let you postpone your valuation until a future date while raising capital. They permit you to accept financial backer memberships, really, rather than having a characterized shutting as would be directed by a valued round.

With a SAFE, your financial backers will get stock in your organization sometime in the future. This occurs related to a particular, legally settled after financing occasion. It’s by and large the offer of favored offers by your organization, regularly as a component of an evaluated round.

Before we continue further, here are a few SAFE wordings you should know (on the off chance that you don’t know as of now)
• Valuation cap: Lets financial backers get a more good cost for every offer in the future by setting a most extreme convertible price. Valuation covers reward financial backers for facing hazards.
• Limits: Discounts expect financial backers to face hazards. They’ve utilized if a financial backer’s cash changes over in future financing adjust and the valuation was at or underneath the valuation cap.
• Pre-cash or post-cash: Pre-cash is the valuation before new financial backer cash. Post-cash is a valuation that incorporates capital brought up in that round.
• Most-leaned toward countries arrangement: Prior financial backers get similar terms when SAFEs or convertible protections are given to future financial backers at better times. All financial backers partake in similar honors.

Not at all like a straight-up value buy, shares have no worth when the SAFE is agreed upon. All things being equal, you and your financial backers arrange a valuation cap for the organization or potentially a rebate to the offer valuation. This way, a SAFE financial backer benefits from organization development between the time the SAFE is marked and the trigger occasion.
However, a SAFE isn’t a credit. There’s no interest paid and no development date, and that implies SAFEs are not exposed to similar guidelines as convertible notes. As per Y Combinator, it was their aim for SAFEs to work very much like convertible notes – yet with fewer complexities.

While you positively can change the foreordained terms of a SAFE, I’d prompt against it. Just put in your valuation cap and leave the rebate at 20%. The moment you begin to play with a SAFE, you’re changing what it is and welcoming further exchanges – and maybe legal costs. The SAFE is an authoritative record and subsequently comprehended by the two sides without getting attorneys included.

Assuming that a financial backer places in a lot of cash and arranges an ideal arrangement, you can return all the time to your initial financial backers and proposition them similar terms. I’ve done everything equal on a few events, and financial backers are excited 100% of the time.
Alternate ways of laying out the groundwork for yourself

If conceivable, attempt to have a couple of “ringers” become your first financial backers and seed your first round. This will show energy and make FOMO for different financial backers. On the off opportunity that any of these financial backers are specialists in your space, you can use their “star power” as an extra mark of approval for your endeavor.

On the off chance that you can’t draw in prominent names, don’t let that influence your strut. Nobody needs to finance a business visionary that doesn’t project enthusiasm, so make sure to ooze certainty while exhibiting skill. You’re selling yourself in these beginning phases, however much you’re selling your organization.