A finance 101 through Covid-19: How to get an edge raising investment

If you missed out on our ‘How to get an edge raising investment’ webinar, we have collated a snapshot below of the key learnings for startups and businesses navigating financial challenges presented by Covid-19. You can also catch-up on the takeaways from our Building Future Resilience webinar on R&D tax credits here.

What impact is the pandemic having on investment? Despite the difficult climate, investors are still funding enterprises – but securing investment has become harder. There is less capital around, investor risk appetites have reduced, and many funds are looking after their own portfolios and have put a moratorium on further funding for the next six to 12 months.

Covid-19 has definitely made the already competitive process of asking for money even tougher. However, if you do decide to go down the route of raising funds through investors, these tips from leading seed stage venture capital firm Playfair Capital could give you an edge:

• Do your research – some investors only invest in specific sectors and business models. Only approach an investor with your proposal if it relates to their field of expertise. (eg if an investor only invests in B2B don’t message them with a B2C proposal)
• An investor may get up to a 100 pitches/emails/LinkedIn messages requesting an investment opportunity per week, so yours must stand out from the crowd – make sure it leaves them wanting to know more so that they follow up
• Just as you would tailor your credentials to a specific role in a job application, ensure that you tailor your introductions to the investor and the firm they are from
• When approaching investors practice the three-strike rule – if you don’t receive a response after three emails, don’t continue
• Make the most of networking events and opportunities as you can make very valuable connections to investors this way. Warm introductions to investors (made through a personal introduction) are much better than cold introductions (when you don’t know each other rely on a direct email from you to the investor)
• Your pitch deck must be succinct, properly designed, and impactful with no mistakes
• Practice makes perfect! Make sure to rehearse your elevator pitch so that you perform it confidently and smoothly. Elevator pitches must be sharp and to the point
• If you have pitched and the investor has chosen not to invest, always ask for feedback. Everything is a learning curve and an investor will have good and specific constructive advice for you to work on for the future.

If you would like more insight into pitching for investment, make sure to register for our virtual 'Reverse Pitching' event - designed to be a unique learning experience for entrepreneurs, attendees will get the opportunity to put panel of early stage and late stage investor in the hot seat to be grilled. To register, please see here.

For more advice on how to secure investment, check out Sifted’s article which features advice from seven investors on how to cope through the pandemic here.