Tips for female founders on how to prepare for their fundraising round from an investor perspective.

Meet Alena Redeker from the investment team at Auxxo Female Catalyst Fund, Alena is also a Grace mentor and expert that has been supporting the Grace vision for years.

Auxxo is a sector-agnostic pre-seed and seed-stage venture capital fund that backs female (co-)founded startups in Europe.

In this interview, Alena shares her tips for female founders on how to prepare for their fundraising round from an investor perspective.

What are your Top 3 tips for founders preparing for their fundraising round?

Network as much as you can, this will help you build relationships with people who might be able to either share their experience in the fundraising process if they have been through it themselves or introduce you to potential investors.

Build up a list of the investors that would be a fit for you (e.g. right stage, geography, industry focus, etc.) and then try and fill that list with contact information and ask people from your network for introductions to these investors. Treat this like you would also treat a sales CRM, diligently inserting all of the information, the next steps, the process, the value they can add, and what they would like to see from you.

Practice makes perfect! Prepare the pitching well in front of many different people (e.g. industry experts, but also someone who has no idea about the industry to make sure you bring across your message in a short and understandable way). Additionally, also prepare a data room ahead of the fundraising round and collect feedback on this or exchange insights with fellow founders.

How can founders build and maintain relationships with potential investors?

Investors attend a lot of events, such as big conferences, pitch events, and founders' office hours. Try to attend the ones that are relevant for your industry and stage and speak to investors, even if it is just casually while e.g. waiting in line for a coffee.

Ideally, someone who knows the investor introduces you, as warm intros are always better. Once you have had your first touchpoints, investor updates via email could be a great way of keeping investors in the loop and up to date ahead of your fundraising. Building a relationship before you need to fundraise is crucial, especially the later stage you get.

LinkedIn is also a great way to stay visible and is a crucial sourcing tool for investors, so make sure your LinkedIn profile is up to date so that potential investors can find and contact you there.

How can founders best prepare for investor meetings?

Usually the first meeting, at least how I see it, is a more conversational introductory meeting in which you both get to know each other. Sometimes these will go very deep into detail and at other times it will be a first glimpse. But ideally, this will only be the first of many meetings to follow, so try to be prepared, and do your homework, e.g. look at the fund and the investor you are speaking to, the investments they have done, etc. For me a great first call is one where I leave the meeting feeling excited, wanting to learn more, dive deeper and really want to work together with the founders.

In terms of preparation: Practice pitching with friends, colleagues, and fellow founders to get comfortable and see what questions might arise and think about potential questions investors might ask.

Overall, there are so many different types of first meetings and there is no one size fits all, but the more calls you do, the more natural this will feel. Being prepared, curious, on time, with material (e.g. pitch deck) at hand is already a great way to start!

The most common topics that will be covered are a short introduction from both sides and questions around the problem, solution, product, business model, team, timing, market, competition, traction, and round size. Knowing what you ideally want to go out of the meeting with is great to give some guidance, e.g. is the investor a lead or follower? What would be their ticket size? How fast are they in decision making? What does the process look like? What value can they add?

Lastly, I would suggest agreeing on next steps: Do they want to see a data room? Do they want to schedule another call? Do they discuss it internally before and you should follow up after a given time? Do not forget that it is a two sided process, you as a founder should get the investor excited, but ideally the investor should also show you why they are the best partner for you.

Do not get discouraged if you receive a lot of rejections. Venture Capital is a numbers game and we as investors look at thousands of decks and speak to a lot of founders. Most of the time each fund only makes around 10 investments a year, so there will be a lot of no's, but in the end you only need one yes and someone that believes in you and your vision, so do not give up too early!

Thank you Alena for the Interview! We are happy to have you on board as a Grace mentor.