The Art of the Pitch: A Lesson in Startup Funding

This past Thursday, we sat down with two of our co-founders and co-CEOs, Sam Li and Austin Ogilvie, to discuss how they raised a Series C round of funding. With the complexities of the current economy, the timing of this funding highlights the fact that many companies view compliance as a top priority and how Laika is filling a much needed gap in the industry. Laika  provides automated compliance and integrated audits supported by deep industry expertise, making it the only comprehensive, centralized compliance platform on the market.

Some key takeaways established in the discussion with Sam and Austin include:

  • What to have before you pitch (your prep is critical!)
  • How to choose partners and what is needed to do so
  • Tips on how to secure funding during the current economic climate

Watch the full discussion here:

Before the pitch

There is a lot of prep work that goes on behind-the-scenes before pitching begins.

“A lot of the data you present to the investors you are already collecting and maintaining it organically through your day-to-day business operations,” says Sam Li. “You should have a basic idea of your growth and product, [among other] things.” To secure investors, you want to avoid the headache of last-minute number crunching. 

As every found knows, you’ll also need your pitch deck. As Li points out, “It is not only a great piece of material to share with investors, but also a structured way for you to collect your thoughts and tell your story.” A pitch deck also shows where the gaps in a company are and its key strengths. 

When putting your pitch deck together, make sure to prepare key information like:

  • Sales and marketing metrics
  • Gross numbers
  • Different revenue opportunities
  • Customer acquisition costs
  • Financial mode
  • Competitive data; and,
  • A customer list. 

Investors can call your customer list to get references, so it is important your customer list is aware that they may reach out.

Partners you choose: how to choose who fits?

“You want to find partners you like as well as what we call the ‘path to introductions’. Warm introductions are always much, much better than cold outreach.” Li says. Warm leads offer more leeway as the partner already knows your product. 

“In the very beginning, you want to be moving to written terms as quickly as possible,” says Austin Ogilvie. “Take a deep breath, don’t react to it, and use that term sheet to generate more.” 

Investors often provide a term sheet when offering their private investment. The inital term sheet will help to generate more term sheets. “Once you have this first term sheet, there are logical people that you call next to let them know, ‘Look, we’re talking to great investors, we have a term sheet, and we’re not making a decision tonight.’” Communicating this is a fiduciary duty and a common courtesy to other potential investors. 

The art of the pitch given the current economy

“In this particular round, Laika is stepping into a growth stage,” says Ogilvie. Pitching relies on what stage you are at and where you are going. “The round composition you want to think about differently at different stages.” Different stages or rounds require different types of pitches to secure funding. You will use each funding round for different means, so explain to potential investors where you envision the funding going.

There are changes in the economy that impact the current fundraising for start-ups. “From our perspective, we are lucky,” says Li. “We have been friends in the community (with our investors) for a long time. Yes, the pitch happens in a very short amount of time, but many of those investors are longer-term relationships that hopefully you have built in your journey as a start-up founder.”

Pitching, although short-term, relies on great relationships. Instead of picking up the phone to talk, consider coffee or lunch with potential investors. When you take the time to sit down and listen or discuss ideas, it shows you care and value their unique point of view.

Last tips?

“The art of the pitch comes down to the relationship you have with your potential investors and the community,” says Li.

“Be very calculated with your timeline,” says Ogilvie. It is important to be very clear by asking questions about the investor’s timeline and what they need to get to that milestone in your timeline.

Interested in learning more about our Series C?

Read our blog post to learn how the Series C funding will strengthen Laika’s competitive edge, grow our team in new ways, and help more customers reach critical compliance milestones.

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