Marta Marrucco on Fundraising Mistakes and Investor Readiness

I'm very happy to be here. Thanks for having me and thank you all for joining. Yeah, so I'm Marta. I'm just to give you some human information before my background. I'm Italian. I grew up in Italy. I studied in the Netherlands and I moved to Berlin for a few years and I'm doing back and forth between Rome and Berlin. And I started, actually I started, my background is biomedical sciences. Then I decided to take a gap year and then decided that I liked business because I started volunteering for a Canadian startup that was doing plastic recycling things. One thing led to another and I went back to school to study innovation and started working for this company and then kept on working for different industries and different startups. At different stages. So I went from working either by myself during COVID on new business ideas to teams of 5 and 10 people at the seed stage, then jumping to bigger companies around 100 employees and then around 300 employees and in situations where there were acquisitions happening and handling these things. And so at some point of my career, I decided to found SmartFounder. Because I saw that every, at every stage you're struggling to fundraise. It doesn't matter if it's your, you know, pre-seed, you just have an idea, you wanna raise some money, or you're at the Series C. Obviously when you're later in stage, you have more, you know, data to back you up. You have more, you hopefully have connections already. You hopefully have VCs that keep on backing you up, but still it's a very time-consuming job. And so both people that have never done it need some help and guidance, but also people that have done it before, they don't really have the time because they need to run the business and they can't spend 6, 7 hours a day working on projects. And so that's where I jump in and I help both of these figures, let's say. So either, yeah, first-time founders, early stage or later stage. And it's kind of like a tailored approach. Yeah.

Awesome. What I really like is you have a very interesting journey, right? I don't think you intended to be doing what you're doing right now.

No, not at all.

But you kind of found your way here. And I think that's something common that you notice about people who have started companies, people who are within this space, right? Right? I think it pulls in people who really want to make a difference. So that's always really great. And folks, if you do have a question for Marta, please drop it in the chat or the Q&A section and I'll line it up for you. Marta, because you have experience working with startups and founders from across the world, one question that I would love to honestly know is what are some differences that you notice when it comes to fundraising for startups, let's say based in Europe versus the US, because we are hearing this a lot nowadays where it's like, oh, it's so much tougher to raise in Europe, right?

Yeah, I mean, definitely. I don't have that much experience in raising in the US, to be honest, um, because yeah, I think Canada is a bit of a different, uh, yeah, situation. Um, but it's harder. There's less money in general and it's a bit more conservative, right? It's less risk-averse and you tend to invest in things that you know. So yeah, the rounds are smaller. Usually they're around like 20 to 30% smaller, right? On average, I would say. Also the early stage, it's harder because sometimes you can raise in the US and still market in a country where it's cheaper to market in. So maybe, you know, getting $100K from an angel in LA, it's relatively easier than doing it in another country like Italy, for example, as well. But then you can still prove your go-to-market in a country like Italy and with $100K you can do quite some things. Whether the other way around is not that possible. So I think that's also something to take into account.

So since you're also, you know, helping founders like across the spectrum when it comes to that founder journey, right? So what are some common mistakes that you've noticed founders, they tend to make when it comes to fundraising? And I know there are a lot, right? Maybe, maybe talk about like some that really, really stick out.

Okay. So for sure, having the data room ready, it's very important. And with the data room, I mean a bunch of different documents that need to be ready. Like I think very often, especially at the early stage, founders believe, and they rightfully believe so, but they believe that their idea is the best, right? And then it will break the market. And that needs to be proved. And at the early stage, you haven't proved that. So investors are very skeptical when you present to them great numbers that are not actually backed by any real data, right? So if you present a document of financial projections in which you say, I go breakeven like first year, if this happens, and I will make 45 million in year 5, then that's quite unlikely unless some specific industries like biotech and you haven't, you already had 3 startups in biotech, you know how to do it. And so I think it's much better to actually step back a minute, work on the numbers and figure out what you can achieve and then present humble numbers to investors. Obviously you need to show them that you have aspiration and that you want it to grow and that you have the spark to make it grow. And then you're not gonna be happy with whatever, you know, if you make one, you wanna make one and a half, you know, and you wish you made one and a half. And so you always wanna make it, make more and make it better. But these are people that have invested in companies before. So they see through the, like, allow me to work crap that, that is a number like 50 million, a random number like 50 million is. So they want to see an Excel document. They want to see where this number comes from. They want to see how you get there, you know, like how many employees you need, how much does an employee, what's ROI of an average salesperson that you're going to get. You know, what kind of product lines are you going to have? What's the pricing of these product lines? What is the cost of goods sold for each product that you sell and all these things. And even though these are like when you haven't started selling and these all are projections, right? So you don't, they're not actual numbers, but doing this homework of filling out the data and testing different scenarios very, very often leads you to a completely different outcome than you started with. So whenever I work with a client and it's like, great, I'm going to sell this product and this is good. I'm going to break the I don't know, that market, the German market in 3 years, and I'm gonna, the potential is to make $30 million in year 3, then we work together and that number suddenly shrinks, but they realize why it shrinks, right? So then they work on this document and they're like, okay, well actually, yeah, that's true. Like maybe we can only attract 1% of this customer type and we can charge them this at the beginning and then maybe we can increase the price, but it's all, it's all thought through. and investors appreciate that. Yeah, so that's it.

Because there's so much that we could really zoom into and, you know, kind of get into the details there. What's really interesting is that I had this conversation with somebody else who is a part of a VC in the Middle East, and they had, you know, they had a similar comment about how especially like first-time founders, they have big ambition and they have really great ideas. So with that, their target market is sometimes big, a little too big. And oftentimes the case, especially at the earlier stage, is like zooming in and really focusing on that one customer and making sure that you're able to provide like the utmost value, right? On your point about the data room, what are some non-negotiables within the data room that you feel like, okay, every single startup should absolutely have this?

Yeah, it's a good question. So you obviously need a pitch deck and everyone hates pitch decks because there's a lot of ways to make them and they're probably all a bit correct. You know, there's not a correct specific one that you need to follow, but the idea is that it needs to be easy to understand, quick, 'cause people scan through something like this, you know? So if you make it too complicated or not attractive enough or too heavy on text, then attention span is going to drop and no one will look at it, even though probably it's great. And they should have. Numbers need to be correct also in the pitch deck. And these numbers come from a financial document that you also need to attach in the data room, which is a 5-year projection plan with different tabs, you know, income statement, cash flow, 2025, 2026, 2027, 2028, 2029, amortization and things like that. So it's a big document, especially if you want to start raising from a VC. Maybe if you want to raise from some angel investors, then, you know, then they don't require that much of a thought-through process, but anyone who does this as a job, then they do. Then all the contracts of clients that you might have already, or the pipeline of clients that you have Then if you have IPs, if you filed for patents, if you have some patents pending, add that shareholder agreement and, you know, who owns the company, what are the kinds of shares that each person has, how much do they have. If you have some borrowings or liabilities, if you took a loan. Yeah, I would say these are The main things. And if you have some PR, it's always good to add some good PR in the deck. Sometimes the one-pager is nice to summarize the deck, to send it as a kind of like a catcher. I don't know if it's an actual term, but attention grabber. Yeah, these are the main things that come to mind.

Awesome. That's a really insightful answer. And I think folks, if you, maybe you want to run that back and take notes. We will be sending out a recording in the next 48 hours. So if you've signed up for this event on our, on the FI website, you will receive a follow-up email. Okay, so Marta, going into a couple of audience questions, we have this question here from Ash, and they ask, what is the average money raised at pre-seed based on your experience? I think for this, it's kind of, it depends, right? I'm assuming. What's really interesting is the second part of this question, which is does cold calling and maybe cold emailing investors work?

Okay, so for the first part of the question, it really depends. It can be from, I don't know, $50,000 up to, on average, I would say like €350,000. I know it's a big spend, but it really depends on what your idea is about. There are some fields that, for example, are more heavy tech intensive that require more money. Some other, maybe, you know, SaaS, business to consumer product that you can create with a no-code that requires less money. So it really depends. And that's not taking into account fields like biotech or medical tech or pharma, right? Where you don't do anything with $150,000, so that's much higher. Or deep tech, space tech, or, you know, things like this, like very intensive technology industries. Also depends where you are based. As I said, in the US, ticket sizes are higher than in Europe. So it really, it depends on the industry, on how much money you actually need. I would always advise to raise as little as possible. As possible at the beginning and not overdo. Like actually, because being a startup is being, you know, it's figuring out how to make it work with as little money as possible. So if you need a job to be done and that job can be done by your friend, then have your friend do it instead of hiring a fancy freelancer. You know, unless you need a specific expertise that your friend doesn't have, obviously. But if you're like at the early stages, you have an idea, you're trying to like create the first concept, the first MVP, spend as little money as possible. And investors usually appreciate that because you're not, you know, imagine it, imagine it the other way around. Imagine if you had to give away your money to someone because pre-seed is usually angel groups or angel investors, or, you know, I don't know, accelerators, incubators, or things like this. Imagine if you had to give away, you know, your savings you would hope that the people using your savings are spending in the most thought-through way as possible. You don't want them to be wasting money, your money on tests, right? And that's how investors feel. Also because you retain more shares if you ask for less, and that's always good at the early stages. On the second part, it depends. I am not— I don't want to say that cold calling is not good, because lots of startups have been founded from cold emailing. And if you just don't have the network, then there's not many other ways of doing it. I do always advise to, you know, do it in a warm way, you know, try warm leads, obviously, right? So if you can attend events, if you can find, I don't know, like webinars you can attend to, there's you know, there's a lot of different ways in which you can contact people like sideways, or if you wanna do it on LinkedIn, I always tell people to send a connection request to someone that, you know, you think is an attractive investor, either works in a VC that has the scope that you need or has invested in similar companies before. So target is key. Don't just spam people. You know, you need to really see like, oh, my startup is in XYZ. I need to contact people that invest in XYZ and not in something else because then they don't really appreciate it. But send a connection request. And then once they accept it, send them a message being like, hey, like I see that you're an expert in this and I see you've done great work at I see that you invest in this startups and I would love to hear some thoughts about something that I am cooking, something that I'm doing. Would you be available for a quick call? And I think that's a more effective way to get to a first call to someone than just sending them a one-pager being like, this is my startup and do you want to invest? People love to feel that they have knowledge that to share and not that you want their money, essentially, even though it's not theirs and it's for their fund. But that's the, yeah, basic, basic, um, thought process.

Yeah, that's super helpful because, uh, a lot of, uh, you know, a lot of founders, they initially start off with an idea of who their ideal investor would be And to be very realistic, it's super hard to actually get your ideal investor unless you have, you know, that warm intro. So following that up, Marta, I want to know maybe because there are investors who do want you to give them updates, right? What's a good way to maintain like an investor-founder relationship? Let's say you haven't raised, but you have established like that first contact, what do you do next?

So once it has already invested, you mean, or before they invest?

Before they invest, like you want to keep them in the loop. So for the future, maybe.

Okay. I mean, if they're in, if they tell you, for example, like I'm interested, it's a good concept, but I usually invest at seed stage. So keep me posted on how it goes. Um, then like a monthly email on updates or new features that you build and new clients that you onboard, kind of like a newsletter. Situation, I think it's nice. Yeah, just to keep them warm. And then if they— my way of doing this is usually if people find your startup interesting, they will come to you being like, hey, I want to put my money here, I really believe in this, rather than the other way around of a startup or being like, could you please give me money, I need your money. Right, because at the end of the day, you're making investors money, right? So when they're very excited about something, they will come themselves. So if there is even newsletter, they see that this is growing, they see that the market is growing, they see you're getting clients, they see that you're going somewhere, and then all of a sudden you're like, hey, we're opening a new bridge round, whoever is interested reply to this email, who is actually interested will reply, in my opinion.

No, that's super helpful. Okay, so we, on your point about LinkedIn, we have this question here from Linda, and Linda wants to know if you have a choice between LinkedIn and maybe dropping them an email, like which one would be better, right? Like what's more effective?

I would say LinkedIn, definitely LinkedIn, because nowadays we receive so many emails and spam emails and there's also a bit of less— I would say that on LinkedIn people tend to reply because there's a human, right? So you see a picture, you see that there's someone behind whether on an email or they're just an email address. So if you don't know them, then why would you reply to someone you don't know if you're not interested, right? So then maybe they need to send 3 follow-ups before you get like, oh, not interested, sorry. Whether it will be good to have it straight away, the answer. And on LinkedIn, I think the last thing is that people can do apply quicker and nicer and yeah.

Perfect. Because we also have a ton of founders who are at the earliest stage, they're just ideating. How in your words would you define pre-seed and seed, especially when it comes to raising funds?

I mean, it's just, it's just names, to be honest. Like, it's just like number 1, number 2, number 3 round. We just decided to call it pre-seed, seed, Series A, B, C, and then IPO, right? But you can call it 1, 2, 3, 4, 5, 6. I don't know why we came up with this, uh, this much more complex structure than it needs to be. Um, but yeah, um, If it's the first time you raise some money, it's called pre-seed. If you already raised even just like a little bit, if you won an award or something, you could technically call it seed. But at the end of the day, these are marketing words. So you could still reach out to a VC that only invests in like seed and Series A. If you, and then you, you know, you're like, oh, but I won an $80K award or I won a grant from the, I don't know, this country or the European Union or like a grant from a regional grant or something like that. And then you could technically also count it as pre-seed. Like it's a bit of a play, I would say.

Yeah, on the grants point, because, you know, not every startup is built for venture funding, right? What, like what should the consideration be like if you, when it comes to like whether or not venture funding is for you, or maybe you should be considering grants or something of that sort?

Again, it depends on the, on the industry. There are some— it depends where you're from and for the industry. So for example, I would say like in Italy, there's a lot of tourism grants that you can take. Or if your headquarters are in a less developed region, then there's more grants that you can access. So it's about opportunity. So if there are a lot of grants that are in the space that you are working on, then I think that's a great way. You need to take into account though, that with grants, that it takes a while to get them deployed to you. So you send the proposal and for the European Union, for example, like, um, Like if you want to get some Horizon funds, then it takes around a year to be received. And there's a lot of paperwork on how you need to report how you spend your money and what you spend and send all the invoices and everything that you spent. But that's kind of, you know, that's free money, right? So I always advise to go through that route if you have the capabilities and knowledge on figuring out which grants you need, because it's not that easy as a portal, for example, European Union, to read and to go through. There's also, there's a lot of consultants that help on that. But I think it's quite great. So if you have grants in line with what you do, you should definitely do it. And yes, not every startup needs to go to venture capital. I am actually a strong advocate for or bootstrapping. Again, if you are in an industry and selling a product that you can, basically you can actually bootstrap. Because when you raise with venture capital, you're under constant pressure of reaching targets. And sometimes these targets are not the best targets for your startup, actually. Sometimes you have to fight with investors to be like, yeah, okay, but you want growth in terms of this KPI, but actually that is not a good KPI for us as a company. We should look at, I don't know, this other, um, this other KPI is better. Whether they really care about the return on investment on the short term, because you need to meet target on like 1, 2, 3, 4 years. And sometimes you need to look at the longer picture. But they're not that interested in the longer picture unless you're like working in an industry that will make them like 100x, which is also quite rare. So it's, I would always strongly advise to bootstrap and to try to be, try to spend as little as possible, start with like some, like a niche clientele, focus on them. Make it work, have a, you know, have a side job, maintain yourself in that way. And then see if things kick off or not. And then once you see the potential, you have clients, you, and then you actually have too much demand for your team to handle, then you can go to a fundraise and be like, hey, like, you know, I need to meet this demand. Can I need some money to hire people and then to bring this to the next level. I'm going to turn on my light because it's getting dark and I'll be back in one second.

Yeah, no worries. Folks, I hope you are enjoying all the great insights that Marta has to share. I do see a bunch of questions here in the chat. I think what would be more effective maybe is adding those questions to the Q&A section. The Q&A button is right under the chat button. And hopefully if your question has enough upvotes, I will do my best to bring it up. Marta, getting back to our discussion, you talked about, you know, venture funding not being for everyone, so, and also I also think like not every investor who's interested in your startup is necessarily the right investor for you, so what are maybe those things to watch out for, right? right? Like maybe red flags, uh, just things to determine whether or not you should take investment from an investor.

Yeah, it's a good question. So if, if you're getting money from an angel investor, um, then it's very important that you actually get along with them on a human level. Um, you never want dump money, what's called dump money. Like they need to be helping you in some way, need to be bringing you some form of expertise that you don't have, some form of network that you don't have. You know, get you like, I don't know, into specific events that you may not be able to get yourself, clients that you can't get yourself, something, you know, it can't just be mere money. And I would strongly advise someone that knows what, you know, knows the industry they're investing in and knows how small companies work because Sometimes you get, you know, there's, there's some people that have a lot of money in their bank accounts, but they have never worked in a small environment or have worked in something completely different. So they don't actually know how the struggles of day-to-day life of trying to sell a product to your client. And so then you get into discussions about what their expectations are, that you, what they think you should be doing. And they feel very entitled to tell you so because they gave you money. And what you believe as a founder of what you should be doing. And in the end of the day, you're the one that knows, right? This is like the startup is your baby, you know how to nurture it better. So try, they need to be people that you would like to hang out with, basically I would say. And that you value their opinion and, or they bring you something that you don't have that is very important for your startup at that stage. Yeah, when it comes to venture capitals, you can be a bit less picky because there's a whole team behind. And then there, the important thing is that also that they bring you the expertise that you don't have, or they help you get into markets that you have no connections in. So for example, you can get into a venture capital that you want to get into the Middle East market, GCC region, for example, get an investment firm that works both in your area and the GCC region so that they have the connections for you to enter the next phase of growth that you want to enter.

Awesome. Okay, so folks, I'll pick out a couple of questions from the audience Q&A right now. Before that, we do have a really cool resource on benchmarks for raising funds. It's fi.co/benchmarks. Fahima will put that down in the chat. So if you want to maybe learn about benchmarks across various industries and regions, check that out. Okay, so getting back to questions, we have this question here from John, and John asks, what percentage of equity should I expect to give up at each stage? Again, I know that this is very dependent on what you're building, but what are some of like the basic things to be mindful of here?

Yeah, so yeah, depends on where you're raising and what you're raising. On average, I would say the first couple of rounds is around 20%, and then it goes decreasing until Series C, until like 12, 13%. This is average. So the first round, you can give as little as like 12 and as much as like, what, 27, 30? You know, that at the end of the day, it's a negotiation. Because when you haven't, made any money, when you are at the concept stage, and you, so you haven't proved to anyone that your startup can actually work. It's about how much you think it has potential. Obviously it's about the size of the market, the pricing, and you know, your competitors and how much money they've made and what their pricing structures are and what is the gap in the market, how big is the market I want to enter and stuff like that. But it's your personal opinion. You are the only person that can say my company's worth X and I'm willing to, and I need $200K, so I'm willing to give away X% in order to get my $200K. And investors will likely tell you like, oh no, that's too much. Your, you know, your valuation is too high. And then it's a negotiation. It's just like when you're trying to sell something new to someone, when there's no, where there's not really a value benchmark that you can put yourself at. So you're saying this pen is worth €5, but I think this pen is worth €2. So how, where do we do it? How do we do it? Then let's settle to €3.50 or things like this. You know, like it's, it's not that, it's not that defined as you might think.

So just zooming in on the maybe the product not being ready yet bit, we do have a really interesting question here from David, and David asks, what are maybe numbers and metrics that you could show to investors if your product isn't there, maybe if your MVP is not quite ready yet?

Okay, you can, ideally you would've run some questionnaires, to potential clients. And so you can share the results of these questionnaires. For example, the age range, the gender, the location that is most interested in what you're trying to sell. How much do they believe is valuable on a scale of 1 to 10? How much are they willing to spend for the product? Which, by the way, what's obvious is very different. Like the willingness to spend and the actual spend very often don't match. Because it's easier to click on, yeah, I will spend €1,000 for this. But then when it actually comes to putting your credit card details, a lot of people back down. But still, these are interesting metrics to show potential of what your idea is and to show that you have gone to people, you have talked to people, and you have put some data behind what these people have told you.

So we do have a question here from Simon, and Simon asks, just to answer this super briefly because I feel like you already have, does having a prototype give you an advantage of getting funding? I think of course, right?

Yeah.

No product is better than, sorry, a product is better than no product, right?

Yeah, absolutely.

So we also have a couple of Europe-specific questions here. Kalpana here asks, are there any specific grants for, let's say, women founders in health tech in the EU? More specifically, how do you find information about grants? Like what are some good sources to go to?

Mm-hmm. Oh, but for the European Union, there's the European funding portal. It's their official website. And then from there, there's different programs that they run. And so then you need to, you can filter, you can use some filters and then look at each program and see the list of grants that exist. It's a lot of research. So it's not going to be a very nice user interface and experience that will lead you automatically to where you want to be. There's going to be quite some like reading and figuring out, okay, what does that mean? When do I get my money? Like, how much are you going to give me? What is the deadline? What do you need me to bring? And things like this. But there's always good official portals. So every region has them, every country has them, and the European Union has them. And for sure, there are also some service providers that can aggregate this data and then give it to you in a more digestible way. And every country has its own. I think you can just Google it and there's a lot of them and they're quite respectable, I would say. I think you can recognize them and they usually charge like it's a SaaS, right? So they give you some free access for a couple of days and then they charge if you want to continue using them.

Awesome.

Okay.

So we have this question here from Ed and this is pretty interesting. Ed asks, should founders be negotiating with investors themselves? Should they, I don't know, maybe get an attorney? What's the negotiation process like?

Both, both. So the founder is the point of reference, and then you need to talk to your lawyer and then talk back to the investors. It's quite the back and forth, and then the investor will probably talk to their lawyer, and the lawyers will talk, and then the investor and the founder will talk, and there is no specific way of doing it. Yeah, also because every investor wants to do due diligence that's a bit different, and so it's quite a case-by-case scenario. It takes a bit to do due diligence, it takes 2 to 3 months, so it's going to be frustrating. There's going to be things that investors are picking and you're like, why are you focusing on this? This is not really important in your opinion, but they really want that sorted because that's important to them. And so it's quite frustrating in the diligence process, but it comes to an end and then you have your money in your bank account and then you can move forward and you're happy then.

Okay, so we have this question here from Maria, um, and she asked this a while ago. Assuming that you had great traction in the first year, right? And then going into the second year, your traction's been kind of stagnant. Uh, what do you do in that case? Should you still be reaching out to investors? Uh, should you maybe focus on, you know, pivoting or growing, uh, those metrics?

It's a good question. Um, stagnant, you mean like staying still, right? Not, not declining, I assume. Yeah, I think it's a very specific You know, it's a very case-to-case scenario, right? Like, why is the traction stagnant? Like, you know, like, were you running on ads, for example, if you had a kind of product that allowed you to, or were you running on personal connections in a specific industry and then you got clients and then you run out of your network and that's why it's stagnant, or did some team member leave? Is internal team communication not good? Is the salesperson, not performing as well. Why? That really depends. That really depends. And it also depends like how much, how much you need the money. For sure investors don't like numbers that are not with the plus X percentage. But sometimes it's not, sometimes it's also a sign of resilience that if, let's say, if like your wanderers will Years 2, there's growth mid-year and then there's some stagnancy. And then the 3rd year is a bit stagnant. And the 4th year you have a bit of growth. And on the 5th year, no, no, no. Like not all investors are looking for the next unicorns. A lot of investors are also just looking for some stable return on investment that's more than 3 to 5%, which is what, you know, your savings account offer you, 5% when you're lucky. But like, you know, maybe they just are looking for like 7, 8%. And they don't want to invest in real estate, they're interested in tech. So, and then in that case, you can really talk to them. You can explain to them like, hey, we're not growing because of all of these reasons, if they're all justifiable, and we need your money to pivot or to focus on this or to hire a new stronger sales team because that's the issue or to, you know, whatever it is that you need money for. Yeah, I can't tell you to pivot directly because it depends, right? If you have like a steady monthly recurring revenue that's sustaining you and the problem, maybe it's not the product, maybe the problem is something else. Maybe the problem is the team. Maybe the problem is how you reach out to people. The problem is the sales. The problem is the market, the geography, or What are the problems? The UX maybe, or whatever. So trying to really figure out the problem and then figuring out ways to tackling them, and pivoting is one of the ways that you can tackle it.

Okay, so before we go into the next question, we have a bunch of people who are asking for your LinkedIn, folks. Fahima will share that in the chat. Marta, if you have maybe a website or email where you, where you would want to people to reach out to you, feel free to shout that out.

Yes, of course. You can reach out to me on LinkedIn. And otherwise, I don't know if I can say it now. So I, as I said before, I work with first-time founders to get them ready for fundraisers and that's making the compelling pitch decks on the financial part. That I usually work with. They're kind of like high sale tickets, but for this event, I made a template and an ebook with how to fill a pitch deck and how to approach it and how to market slide, for example, and all of these things. And I will share here the link and then you can take a look if you're interested, text me.

Awesome, thank you so much for creating a resource for all the lovely people who are here with us today. Okay, so getting back into the Q&A, we have a question here from Jason, and I know you briefly went over this, right? Maybe you could talk about this a little more in the context of a waitlist. So Jason has a steadily growing waitlist on their landing page, Can they use this as a proxy for traction when they're going out for pre-seed funding?

What do you mean? So the landing page, like can you use the landing page to show the product?

So they have a waitlist on their landing page and that waitlist is growing, but they don't have the traction at the moment. Right. In terms of customers, in terms of recurring revenue. So is that waitlist useful?

Yeah, definitely. Definitely. A waitlist is ideally people that, you know, are waiting to use your product. So it means that people want your product. Then I would say define whether you're going to give a free version or it's already paid and whether this customer, potential customers are aware of the pricing or aware of the fact that maybe you're giving it for free at the beginning. Maybe like if you have some more information about the kinds of people signing up to your waitlist, if it's a B2C, B2B, for example, you know, there's like X amount of companies that have between 50 to 100 employees, X amount of companies that have 200+, X amount of companies are like sole entrepreneurs or things like this. Like the more data you can extrapolate, the better it is, but definitely it's a good, it's a good sign that your waiting list is growing.

And we also had a question here from Georgie, and Georgie asked, um, so they were, they were asking about, uh, new VCs, right? Like you have VCs who just created their funds, maybe they're, they don't have a ton of experience investing in startups. So let's say as a company with Choice, is that something that you would consider when you're raising around, or should you prefer maybe VCs with much more experience and a bigger portfolio.

So you're saying like if you have the choice, then go for a smaller or bigger VC, right? I mean, it's quite, I would, I would, I would say you've done a great job if you have a lot of choice. That's usually not the case at the beginning. Usually the more VCs you can sign up, the better it is because let's say you're raising like a, I don't know, a $2 million round, there's, there's going to be a lead investor, there's going to be a lot of follow-up investors. And the lead investor doesn't always mean, like, it's not always like a ratio of like $1.5 million and then the other $500,000 between other 3. It could be that the lead investor is, say, putting, you know, $400,000, and then they have like a bunch of other ones putting between $100,000 to $300,000. Um, so it depends. Um, if you have the choice, I wouldn't look at this how big the VC is, but rather how much they can help you and the people that would be in charge of helping you, how much you get along with them. And if you think that these people have the expertise that you need, because it can also be that the VC is huge, but then they don't have any connections in, I don't know, Australia. And then that's where you want to grow. Whether there's more VC, it's small, they would give you less money, but they're, you know, greatly connected there. Um, so again, I'm sorry to always say that it's a case-by-case scenario, but as it usually is.

Yeah, and I think it's also because, like, uh, you have so many diverse ideas, you have so many diverse markets, right? So it's very hard to come up with an answer that applies to everybody, right? Yeah, but I think, like, the good part is I think from a lot of the things that you've shared, you can pretty much maybe extract like, you know, the structure, right? And maybe apply it to your scenario. Okay, so I have this question here. I lost the person's name, but they asked about crowdfunding, Kickstarter and Indiegogo. What are your thoughts? Are these legit? Should a founder go for these platforms? And maybe what are the implications on raising a seed round after you do something like this?

Good question. So Indiegogo and Kickstarter, very reliable platforms. First of all, this is product crowdfunding, right? So this platform works that you presale a specific item. You want to create a new, I don't know, a new iPhone cover or whatever it is. Usually it's a bit more tech. Specific than that, or a new video game. You want to develop this new video game. You say like, hey, buy my video game at a discounted price for $50. When it will be actually live, it will be for— I will sell it for $100. So now you have the chance to buy it for $50. And I need $20,000 to develop it. So people will buy it. And then if you reach the goal of $50,000, you will, you will receive the chunk of money. And then within 2, 3 months or whatever the timeframe that you've decided, you will give the video game to the people that bought it for a discounted price, but you will not lose any equity because you essentially just sold the product before it was born. And that's not applicable for many industries. It's applicable when you're producing specifically an actual product or gaming sometimes. What I usually— the segments that I usually work on are more equity-based, right? So, and for that crowdfunding also is a good approach. There's a lot of very reliable platforms in each country actually. And it's very nice. And there's also smaller let's say angel clubs that just create their own crowdfunding platform and it's an easier way to manage the campaigns. One thing to say about crowdfunding is that it requires a lot of marketing. You will need to make a compelling video, which usually you need to spend $2,000 on with a video maker to make it and to edit it and to cut it. I need to spend a lot of time. Behind that. You need to make a compelling visual, compelling presentation, good storytelling written down. And, and that's— and if you don't do that, you're not going to raise because the only thing that people can see is what you put on that page, right? So you need to put a lot of effort in that page. And another thing is there needs to be as much as waitlist as possible. Because for Kickstarter, for example, there's, you know, everyone is applying, everyone's creating their own campaign every day. And the platform promotes the ones that are growing the most. And at the beginning, if you haven't told anyone that you're creating this campaign, then people are, you know, how are they going to find you? You're not going to be showcased at the beginning of the Kickstarter page when people like open it up to look around. But you will be showcased when you reach like 10% of your goal, because Kickstarter wants you to finish it because they get their cut if you reach your goal. So the first chunk is very important. And that's why if you have an email list, you know, a waiting list that you can push that to, then it's much easier to get funded. Yeah.

So just to kind of follow up on being able to market, and we're seeing this a lot, I think, with, with founders, especially now that so many people are on LinkedIn. Should a founder who ideally wants to raise a round in the next couple of months focus on marketing themselves, you know what I mean? Like building out that profile, having like a public persona that's maybe tied to their startups, is that a good idea? Is that something that even matters to investors?

Yes, yes, I would say so, yes. Take into account that it takes like 6 to 9 months to fundraise, so you need to be really starting very early. And for sure, like, I mean, at the end of the day, when you talk to someone, you check them out on LinkedIn, then you check out the website, you see what they're doing. And if their life screams the startup and their life screams like, oh, you're, you know, you're actually doing this, you're good at this, you've done this before, you know, look, you're a professional, then they're much more likely to invest in you. So like get a nice, uh, You know, create a brand, even if you don't have a product yet, but like really invest some money in like creating a brand, creating the graphic that people these days require to, yeah, to take you seriously, unfortunately. And take some professional pictures maybe with, you know, you and your teammates with a branded t-shirt working together or things like this. And Try to engage your audience on LinkedIn being like, oh, day 1 of this activity, we're doing this, we're testing this thing. And then, you know, at the beginning, no one will like it, but eventually you will start getting some traction. And even if you don't get the traction, but an investor will open your LinkedIn profile and they will see that you've been working on something because otherwise they have no other way of knowing that you have been. Obviously you have been, but they can't see it. So.

Yeah, awesome. So, okay, so going into last couple of questions here, you shared this really great resource on building a pitch deck. Maybe, uh, briefly, if you could share like what are some slides that you have to include no matter what.

Yes, of course. Um, I can share my screen also, um, because it's easier. Um, I can just share the template. Let's see. Okay, good. So, I mean, basic slides, right? Like who you are, the problems, the solution, some mockups of your solution. There's a lot of now like free tools where you can create mockups and they're quite nice. One slide that is often overlooked is a user journey, I would say. And if you have a SaaS product, if you have a product which is, you know, it's a sign up, there's a clear path that the user takes. Then it's very good to add it because very often maybe we just bomb the investor with, oh, I have this feature and this feature and this feature and this feature. And they're just like, okay, but how does it work? You know, if I open this new website or new app or this tool, like what do I do? You know, what are the options of the user journey that helps them get a more visual representation of how the flow looks like? The market trends. So why, Would I invest in this now out of all times, essentially? If you can add like, it's a marketplace, why a marketplace? Or like, you know, you can focus a bit more on the business model. The business model, this is a very important one that there's a lot of confusion on, I would say, the market sizing. And you need to have this 3 information, which are called the total addressable market, the serviceable available market, and the serviceable obtainable market. The idea is that this number decreases by a lot. So the idea is that like this is the total addressable market. This is like if I would sell my product to all of the people that could be interested in it, how much would that be? So there's different kinds of markets. I have the market 1, market 2, market 3. That could be all be applicable And then worldwide, and then you go into like, okay, but like ideal, like actually I'm probably gonna sell in, in Europe and Europe is just a segment, uh, you know, it's just a fraction of this, the total market. How much is that? And then maybe not everyone in the specific market is interested. So maybe I'm gonna take a subfraction of that. And then the last one is what can I actually obtain of this serviceable market? Which is how much money can I make in the next 3 to 5 years? It needs to be a reachable number. Very often I see like trillions and then here's like 200 million, and that's not like— you cannot obtain 200 million in the next 3 years. It's not possible. This number is between— it's usually like, it's not higher than 50 million, or not. Investors won't take it seriously, I would say, if it's too high. And that is just a lot of research getting these numbers. And in the ebook attached to the template, you can really see if it's open. You can really see, oh yeah, here it is. Like, how do you understand this concept? Like, what can you, you know, how can you get this report? You can also use AI and ChatGPT, for example, or Perplexity. Really make sure to look at the sources. And to see if there's the right, you know, year, the right source, like if it's a reliable source or not. Who uses your product? So what's your customer type, your competitors, what makes you, you know, different and kind of try to like make chunks of your different competitors. So being like, this is a temporary thing. Okay. These are all focusing on pet sitting. These are focusing on house sitting or whatever, you know, and then maybe you do both and then you put your logo, usually try to be on the top right. I don't really do the four, like the cross. That's also fine. It doesn't really matter. The idea is to showcase that you are better than your competitors or that you offer something different. Go-to-market, talk through go-to-market, you know, country's focus, how you're going to get your customers, financial projections. And this is a screenshot of your P&L statement from the Excel document that you've created. If you are at a super early stage and you are raising like, I don't know, €50,000, you don't need that. You can create a basic graph being like, these are the projected costs based on personnel, it, na na na, try to break down some costs and then figure out how much revenue can you make and try to showcase that in a simple graph. And don't go breakeven before year 3, I would say. But if you're raising more money, then you need a full-on document to back that up. You can text me about that. Then some traction, whatever you have, you know, try to showcase growth, try to be like month-to-month growth or, you know, trimestral growth or something and try to put as many numbers and make you look good as possible. Pretty much. The team, focus on your experience and how that actually helps. Don't just say I've worked in this, if that's not at all connected to what you're doing. Try to say like, oh, like I use this skill in this job too, and that makes me ready for this now. Some testimonials if you have them. The raising round, you know, I'm raising $2 million, I'm gonna spend X on personnel, X on this, X on this, X on this. Try to not have personnel number very high because, you know, like investors don't like to pay salaries, right? They want, ideally they want all their money to go into like marketing, that it grows, or sales. And then of course you need software development, but that's also, they like this number as little as possible. Try to give yourself a fair money evaluation. There's a lot of different methods that you can do that with. I would say if you're at the early stages, you don't need to overcomplicate this. It's about how much you think your company's worth and how much you think you can make it. And then kind of make like a a good amount that you're satisfied with. Don't overdo it, don't underdo it. How much has been spent so far? How much you spend every month? How many months do you have of runway? Like if you're not really, if no one's going to give you these $2 million in this case, how much longer can you survive? Is it 3 months? Like usually try to have this number as high as possible, obviously try to make it, try it to be like at least 6 months. Uh, yeah, that's some milestones, and that's— and then your contact information, and that's kind of it.

Awesome, thank you so much for going through that. And folks, I do know that, uh, you can access this, uh, template. Marta, if you could maybe share that link again in the chat because we have a bunch of people who are who really want all of this great insight.

Yeah. And one thing that I want to say, like, the objective of this template is to make you successful and to help you and have my tips because having it done by a professional, it's going to cost you, you know, over €1,000 for sure. Or at least that's what I would charge. So that's why I created this for situations where maybe, you know, you can't afford it or you're not the moment, you know, you don't want to, or whatever the reason may be. And so I try to convey my expertise and the tips to make a good deck yourself. But if you live, I don't know, if you really can't afford it, or there's something that's blocking you, or I wanted to make it, you know, we all come from different countries and we have to adjust it to the purchasing power of different countries. So if you, if there's something that, you know, doesn't adapt to you or it's too much for where you live, feel free to text me and then we can figure something out.

Awesome. I wish we could honestly go on for another hour. We have so many questions that we could ask. We have a bunch of audience questions as well, but folks, unfortunately we are at the hour mark. Marta, so much, thank you so much for taking out the time to be here and answering all of those questions, providing all those great insights. Before we close out, Any final words or messages for the audience?

Not really. Like, stay strong, keep on going. You know, you're going to receive a lot of nos and a lot of people telling you, oh no, that's not going to work, or like, I'm not interested in investing in this. But don't stop if you believe in it. I know it sounds like it sounds cheesy, but out of 100 nos, you get one yes. Yes, and that's what's gonna make you great. And so yeah, keep on looking for that. Don't give up easily.

Awesome. There you have it, folks. Don't give up that easily. If you are interested in being a part of a future FY event, visit us at fi.co/events. I hope you have an awesome day ahead. We'll see you at the next one. Bye-bye.

Was wonderful. Have a good day.