4 Fundraising Strategies That Make Investors Love You and Your Company
Healthcare founders and entrepreneurs are constantly looking for ways to raise capital. In order to launch a company that will meet the growing demand for healthcare services globally, raising money through venture capital is a likely stepping stone. From day one, founders are engaging in fundraising efforts with investors.
However, raising capital in these uncertain times can be extremely challenging. Investors who are excited about investing in your innovative idea can be hard to find. However, finding interested investors is just the first step. It can also be hard to convince them to ultimately fund your business. At Jumpstart, we are committed to providing insight for startup founders as they navigate their own fundraising efforts. We have researched and outlined 4 fundraising strategies that will give you the results you need to scale your healthcare startup.
1. Research and Target the Right Investors
The first key approach to a successful fundraising campaign is targeting the right investors who are interested in your area of focus. Different industries have different investors. It is prudent to spend some time to research and identify potential VCs who are interested in healthcare investments. While there may be a thousand healthcare VCs out there, take things a step further by researching their existing portfolio companies and understanding their investment history. Founders who invest some time upfront to research potential firms and investors often have a better understanding of what investors are all about and what they are most interested in.
All this work will help to identify investors who are right for your funding stage, focused on your industry, and have available funds to invest; and also save you some time from pitching to investors who may not be interested in your business or industry.
2. Prepare Your Supporting Documents
After finding prospective investors, it is important for you to tailor your pitch decks and messaging to resonate with their interests. Most VCs are looking out for founders who are able to effectively communicate their business ideas and how it will generate income over the next few years. Here is an example of an effective pitch deck investors really want startups to use.
Don’t lose a valuable investment because of a bad pitch deck.
Download our template approved by Jumpstart Foundry’s CEO Vic Gatto, to be sure your deck is set up for success.
Preparing fundraising documents that clearly outline your business story, highlight what sets you apart from others, shows current & projected traction (product/sales), and state why investors should invest in you is key. It is your responsibility to make all documents available to investors, so think about setting up a data room that is easy to share or grant access. Investors will love when you are able to present your supporting documents in a timely fashion. This shows how prepared and ready you are to do business with them.
3. Present a Concise and Compelling Pitch
You have researched and targeted the right prospective investors. You have spent countless hours preparing your supporting documents. You know your innovative ideas will generate a strong return on investment. Now is the time to wear your confidence and present your pitch to investors. While VCs are interested in your business, they are also interested in investing in you as a person. It is important to demonstrate that you are the right person to execute on your/their vision for the company
Before your first presentation, we highly recommend practicing several times to a friendly audience. You want to make sure that you can highlight all major points in a reasonable amount of time. Your pitch should be memorable, concise and clear for your prospective investors to be able to digest your idea in a split second. A general rule of thumb is that your first intro pitch should be 10 min MAX! Only after an investor has indicated interest in learning more should you dive into a longer presentation with more detail. But still NO LONGER THAN 25 min!).
Practicing will not only make you more conversant with the content in your pitch deck, it will also boost your confidence. During the presentation, be real and authentic with your potential investors. The confidence you exhibit during the presentation demonstrates how you can inspire others to create the change your healthcare business is seeking.
Little Tip: While it can be beneficial to practice in front of your friends and the mirror, it will be more effective to practice in front of a real-world audience. Attending a pitch competition is a great way to get started.
4. Leverage Your Networks and Existing Relationships
Effective fundraising goes hand in hand with strong relationships and networks. Founders and entrepreneurs who are proactive networkers generally have more successful fundraising stories. Investors are also more likely to do business with founders they already know. So it should go without saying that building strong networks and impactful connections can be beneficial to your fundraising efforts as a healthcare founder.
Get out of your comfort zone, attend networking events and make connections today. We recommend attending conferences, seminars, meet and greets, and industry-specific events to bolster your future fundraising activities. The Jumpstart Refinery has a list of great online events and webinars specific to the healthcare industry that you can attend. Sign up today to have access to build impactful relationships for your future fundraising activities.