58 days to go: making it through the investor conversation funnel

Jade Buffong-Phillips

Apr 03, 2024

Hey there 👋🏾,

For those of you who are short on time, here are the sections of the newsletter you can skip ahead to…

Win🏅: Booked 3x second-stage calls with investors
Loss🤕: None this week!
Lesson💡: The five stages of investor conversations (and how to get through them)
Resources 📚 : 3x things to consider when you’re bootstrapping and more

🎯 Objective

Book follow-up calls with investors & start call prep

After bouncing back from our event, I dove straight back into investor outreach and prioritised following up with investors we had positive first calls within the past 5-6 weeks. This led to:

3x second stage calls being booked with investors (all of which are super productive) 📞
2x missed calls being rescheduled & 1x async connection 🗓️
Major amends being made to our deck as I prepped for a series of first and second-stage calls ✍🏽

It was all pretty productive — even the feedback I received a few weeks ago influenced how I re-connected with these investors. And, as I make my way through the investor conversation stages, I’ve also realised there are a few running trends to investor expectations, what needs to be delivered, by when and to what level of detail. As someone who has experienced feeling stuck in the process, I hope this goes a long way to getting more founders through the investment pipeline 👌🏾.

As always, I appreciate feedback, so feel free to leave comments or reply to this email with your thoughts.

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🔋 Progress recap & highlights

Biggest wins

WIN 1️⃣: Booked 3x second stage calls with investors (2x funds and 1x Angel) 🎉

Booking calls with investors come in ebbs and waves. I’ve had weeks where things have been slow and steady and others where it feels like my calendar is imploding 😅.

This week will be busy as I’m prepping for several second-stage calls with investors that I’ve spoken to in the last month or so. This has stemmed from:

Fund 1 🏢: Connecting with them via cold email several months ago and fortunately got a reply from the MD. After a productive first call, they’ve asked for more details (e.g. product roadmap, financial model) and we will present/discuss this later in the week.
Fund 2 🏦: After a warm introduction, I had a call with their team and have been asked to present again - including a product demo.
Angel 1 😇: Also connected via a cold email and, while the call was initially booked to get some advice, they ended by saying they would be interested in investing.

This is all positive as I’m moving through the different stages of conversation (more on that in this week’s lessons). But there has also been a steady flow of final and first-stage calls booked in this week, which I’m happy with.

I’ll also be prepping in a few ways:

Run-throughs: practice is the only way to really sharpen a pitch. Even with a rough script, I still need to have an opportunity to dust off the cobwebs and get ready to present the best version of ourselves.
Team deck/demo reviews: Our Head of Product will be joining me for one of the investor calls this week! So, we’re going to review the pitch deck together and decide what areas of the business we’ll each cover.
Applying feedback to the deck: a couple of weeks ago, I was fortunate enough to join a Morning Mentor session with 15+ people who have a world of experience. After receiving a scorecard and some detailed feedback, I plan to make additional tweaks to my deck.

One of the most important things I need to prepare is the questions I have for each investor. I’m working on a list that Founders should consider and I’ll share this in one of the next newsletters 👌🏾.

TIPS FOR INVESTOR CALL PREP: ask what they'd like to see (e.g. deck, demo, financials) and whether they need any additional info ahead of time. Then, do some timed run throughs either by yourself or with a team member to iron out the kinks.

WIN 2️⃣: In conversations with a technical advisor 🔥

The search for the right technical team member has been a long but productive one!

To recap, I started looking for a Head of Product & Engineering a few months ago and quickly realised that I needed two people to lead the separate departments.

I believe that customer-centricity starts with the product team — especially if you want to create a platform that really serves your community. Not to mention, when you’re creating a feature moat and trying to clearly distinguish your product from the competition, it’s so important to have a seasoned person in that role. So, I changed the job title to Head of Product and found an incredible person to join us.

Also, FYI, Lenny Ratchinsky published a graphic that lists when some of the biggest tech companies hired their first product person — which is a goldmine — and this also helped me to make a final call.

That left me with one, very big, question… what kind of technical person do we need right now?

I needed help figuring this out so, I sought advice from a lot of people. Advisors, investors, CTOs, CPOs and the list goes on. The conclusion we came to is, Mane Hook-Up needs an advisor with the knowledge and experience that will help us to make sound technical decisions and hire the right people when the time comes.

Given I’m a non-technical founder, it’s also really important to have someone that I trust in this role. That had a huge impact on the way that I searched for a technical advisor as I chose to go through referrals and existing connections vs. posting a job as I did for the Head of Product role.

That said, we’ve been speaking to an incredible person who we’re now ironing out some details with 🥳. Hoping to shed more light on this in a few weeks, but this is another major milestone for the team and it should give investors more confidence in our team as well.

TIP FOR FINDING GREAT ADVISORS: Ask your network for referrals and speak to senior people that you trust and have worked with in the past. These two avenues allow you to find credible advisors whose work you're either familiar with or your connections can vouch for.

WIN 2️⃣: Applied the Morning Mentor feedback to our pitch deck and presented to 2x investors 🔥

At the beginning of this journey, I thought my pitch deck would be this fixed thing that I spent a chunk of time building and designing.

Oh how wrong I was 🥲.

Little did I know, it would be an ever-evolving, living document that changes considerably over time.

I’ve made more changes to my deck than I can count. Don’t get me wrong, it’s been painful at times, but every adjustment has made it stronger and helped me to gain better responses from investors.

Last week, for example, I applied the feedback from the Monday Mentoring session to my deck and had two very productive investor phone calls off the back of it — one of which invited me to a follow-up call with one of their senior leaders. So, while I know deck amends are no one’s favourite thing to do, there’s a lot of value in actioning any feedback you’re given.

Here are some of the best pieces of advice I took, that I think apply to everyone:

Don’t be afraid to sell the vision 🌄: my original deck focussed on what we’re doing now and what we plan to do in the immediate future (e.g. 2-3 years). But, a mentor commented that I really need to sell the long-term goal of becoming a global company.
Dispel any concerns about risks in the deck ⚠️: there are 2-3 recurring questions that crop up about risk mitigation whenever I present our deck. While I’ve been pretty well equipped to answer these questions, a mentor suggested that I answer these directly in my deck as the visual aid will help. Not only have I applied this already, but I’ve also had positive feedback from not one but two investors about this particular slide.
Deck length isn’t as big an issue as you think 📏: having read 101 articles about building a pitch deck and seen so many templates with 10-12 slides max, I became really fixed on capping the number of slides in my deck. I’ve since realised that length is not an issue… but missing key information certainly is. I’m not saying you should go crazy and have a 40-slide deck, but having 15-16 slides, packed with useful information is much more helpful than having 10 that don’t quite answer all of the questions an investor will typically ask.

Hopefully the above helps you as much as it helped me! I’d love to know if anyone else has received some useful pitch deck feedback in the past. Feel free to mention it in the comments.

TIPS FOR SHARING YOUR PITCH DECK: given you'll get to V100 of your deck, it's probably more productive to share a link with investors to make sure they always have the latest version. PDFs are fine, but you investors may end up with an older version as you make more amends.

WIN 3️⃣: Launched a new set of automations 🤖

Automations have been the bread and butter of my investor outreach. They have helped me to start at least 30% of investor conversations and 5x’d the size of my monthly investors update email list.

Needless to say, while all of my regional automations have come to an end, I’m now launching another batch using this list of investors. As I’ve been running automations for several months, I have enough data to choose the best templates, subject lines and sending days/times to supercharge the latest one.

That said, here are some of the variables that I kept the same across all automations:

Set up for all the automations

📧 7x emails in total sent 9 days apart
✍🏽 1x subject line tested

And here’s a quick performance summary of the latest batch:

Performance so far

💃🏾 400 people added to automations
🏓17 hard bounces (now removed from the list)
📧 93 people have opened my emails (23% open rate)
🖱️ 5 clicks on our pitch deck (1% CTR)
↩️ 4 people have replied so far (1% of people)

Considering this automation has only been live for a week, this has been a pretty good result. I’ll continue to include the automation updates in the newsletter until the final batch has been sent but if anyone has questions about how to get started, just reply with your questions and I’ll see what I can do to help!

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Biggest L’s 🤕

None to report for last week! But that doesn’t mean that I didn’t learn anything…

💡 Lessons learned

Quote of the week
Strive not to be a success, but rather to be of value.
— Albert Einstein

LESSON 👩🏾‍🏫: The five stages of investor conversations and how to get through them

Fundraising is equal parts art and science.

On one hand, there is an art to having conversations with investors. They are interested in the product, the market, the founder and how charismatic you are can really influence how people feel about you.

But, there’s also a science to the fundraising process and the Founders who understand what investors need to see at each stage are the ones who will ultimately win.

At the beginning of this journey, I very quickly felt that I was trapped in the initial call stage. I was getting into inboxes, people were reading my emails and replying — that seemed to come quite naturally to me… understanding how to write a solid cold email helps. But, it took me a while to understand how to move on from this stage to getting phone calls and then nudging my way further down the funnel.

As I look back over the past few months, I can see there’s a recurring process that a lot of investors follow. Here are the stages that I’ve experienced and (in my opinion) what helps/hurts your chances of moving on to the next.

Stage 1: Getting a reply ↩️

Task: Sending cold emails to investors or asking connections for warm introductions.
Aim: Get a reply as that suggests your message was at least worthy of a response. A ‘no’ can at least lead to warm introductions and building your investor updates list.
Docs you’ll need: Intro deck, cold email templates and forwardable introduction email template.
What helps you: Searching for investors who are a good fit based on their investment focus/thesis (personality-wise, you never know until you meet with them). Knowing how to craft a good cold email and referencing the things that investors care about (e.g. market size, traction, team). Personalisation can help, but is not the be-all and end-all.
What hurts you: Not referencing core information (e.g. funding stage, vertical), poor grammar or having a poorly structured intro pitch deck.
Result when done well: A reply that either leads to a call, introduction or a polite no.

Stage 2: Getting the 1st phone call 📲

Task: As above, sending cold emails to investors OR having a warm introduction via email that requires a follow-up.
Aim: To book calls with investors that are either a good fit or have a network that’s relevant to your round.
Docs you’ll need: Intro deck and cold email templates.
What helps you: A solid introduction pitch deck that outlines the market, the problem, your solution and the team in enough detail that it piques their interest.
What hurts you: Not referencing core information (e.g. funding stage, vertical), poor grammar or having a poorly structured intro pitch deck.
Result when done well: A call booked in your diary that the investor turns up for. Calls booked, but missed, cancelled, ghosted, suggests something was missing.

Stage 3: Getting a 2nd phone call 📲

Task: Presenting to the investor on the first call.
Aim: Sell yourself and your business to the investor, understand what their process looks like and have clarity over where you are in the process.
Docs you’ll need: A data room with your longer/full deck, financial model and product demo. Plus, a pitch script for yourself.
What helps you: A solid presentation where you demonstrate the market/product knowledge and have a clear path to sustainably generating revenue. Ability to answer investor questions/concerns/objections upfront, clearly and honestly but having the humility to say ‘I’m not sure’ when you’re unable to answer. Being able to follow up with core documents that provide investors with more context. Asking the questions that will help you to better understand the process.
What hurts you: Not having clear differentiation between yourself and the existing market, not understanding your financials, not having solid follow-up documents or following up too frequently after the call without a significant reason or update.
Result when done well: A follow-up conversation about due diligence and terms.

Stage 4: Discussing terms 🗣️

Task: Sharing the details of your terms with investors (e.g. valuation, models)
Aim: To get investors who are the right fit to make a commitment.
Docs you’ll need: Term sheets and anything else related to how you're collecting the funds.
What helps you: Having a realistic valuation based on where the business currently is. A good runway as the amount being raised is clearly sustainable enough to get you to the next stage. A very clear sense of what kind of relationship you expect to have with investors.
What hurts you: Valuations that look like something from the wild wild west 🤠🔫. Raising mechanism that doesn’t work for this investor e.g. you’re using a SAFE but they prefer a convertible note.
Result when done well: A soft verbal/written commitment from an investor.

Stage 5: Going through due diligence ✅

Task: Go through the investors’ final checks!
Aim: To give investors the confidence that what you presented to them was true.
What helps you: Honesty (from the beginning) would have helped you up until this point.
What hurts you: If we backtrack to the 2nd call, given everything that you presented at this stage was true, due diligence should be fine. However, if you’ve overexaggerated or misrepresented your numbers then it will likely crop up here and cause the deal to fall through.
Result when done well: Commitment secured, money in the bank or in your SPV.

I’m sure there are probably slight variations to these stages, but I’m sure you get the gist! With these lessons under my belt, I feel better equipped to have conversations with investors now and in the future. The most important thing is registering how and why I’m making it through to the next stage of conversations so I can successfully replicate the action.

It would be great to hear from founders who are fundraising right now to get their view on the five-step process and see if there are any missing!

TIP FOR MAKING IT THROUGH THE STAGES: honesty will always serve you well. Any over exaggerations will catch up with you at the final hurdle and make the entire process feel like a waste of time on all sides.

💥 Hack of the week

Nothing new to add this week! Feel free to revisit some of the hacks from my previous newsletters:

📚 Resources

If you made it all the way to the end of this newsletter, you deserve a reward. So here’s a list of the best resources I came across last week to help you with your raise.

Fundraising

What to consider when you’re bootstrapping: Toby Egbuna from Chezie shares his top three things to consider when bootstrapping after doing this himself to $100k+ in ARR.
Funding for female founders: Bridgette L. Smith shares a link to book a call where you can ask her anything. Bridgette is involved in several funds/syndicates and focuses on supporting women-led start-ups and minority founders.

General advice

Content & community office hours: Jeanine Suah is running her second office hour session with Founders who are interested in learning more about community and content-led growth. This is an online session that will be recorded and shared with anyone who isn’t able to make it.

🧰 Founder’s toolbox

Anyone who knows me knows that I love finding tools, apps and systems to add to my arsenal. Here’s a list of the best tools that I found last week.

Marco Polo: video chats on your schedule

What’s it for: Send videos to people in your network to start conversations in your own time.
How it helped: Connecting with people when we both don’t have time for a call, but questions can still be answered in a really helpful, digestible, way.
Price: Free for basic features and $5 a month for Plus.

Questions? 🤔

Feel free to drop any questions in the comments below! Until next week,

J x

P.S. Here are some of my other posts:

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240 Days to Raise