If you are ready to raise capital – and you should check out the posts in the Raising Capital section of this blog to make sure you are – you are going to need four communication elements in your process of raising money.
- The intro email – first we are assuming you have a warm introduction to the investor. It’s virtually impossible to get an investor’s attention without an intro from someone they know. This email needs to be short – assume it will be read on a smartphone and you don’t want the reader to have to scroll. And it needs the hook: What is it you do that’s really amazing?, as Frank Zappa asked multi-instrumentalist Ian Underwood during Ian’s audition for The Mothers of Invention. This email needs to be crafted to be passed along, because if it’s compelling it will be. If you have a web site, include the url. The goal of this email is to get an investor’s attention and response.
- The one page executive summary – Once an investor is interested they will want to know more. Send them your one-page business model canvas. The goal of this communication is to get a face to face meeting with the investor.
- The pitch deck – investors expect a presentation. Guy Kawasaki has a good outline in his book The Art of the Start 2.0. Try to avoid sending your entire deck via email. Your deck should be crafted to support you speaking to an investor, not as a standalone document. Your one page exec sum should get you the meeting where you can deliver the presentation.
- The demo or prototype – in many ways this is the most important of all. It’s all about show, not tell. Investors get hundreds of emails and sees dozens of pitch decks. They see many fewer demos or prototypes. If you have a great demo or prototype you may well want to lead the meeting off with it. While a demo is a must have, a prototype is a much better have. It’s the important step between a demo and a real product.
You’ll have a lot more work to do before you use these investor communication tools, such as qualifying your investors. But you shouldn’t start trying to raise capital until you have these four elements.