By Diana Murakhovskaya & Irene Ryabaya, Co-Founders Monarq
Our mission at Monarq is to help women start, fund and grow new businesses by connecting them to their fellow founders and the funding and resources they need to succeed. Every month we host an intimate #MonarqMoguls breakfast and dinner for twenty Women Founders in all stages of entrepreneurship and feature an investor passionate about funding and promoting women led startups. Our March 2016 #MonarqMoguls breakfast featured Carolyn Fikke, a current Managing Director at Golden Seeds and a 20-year Wall Street vet who is passionate about companies that give back to women and kids.
“Take any experiences you have in life and make it available to others.” – Carolyn Fikke
A common theme that we get asked often about is what do Angel investors look for in a company? Fundraising can be a long journey that often takes 6 months or more and consumes you at the crucial time when you should be focused on running your business. Making sure that you are prepared to tackle the key questions many angels have can be critical to your success.
Can You Create 10x Return on Investment?
“You can’t help more companies if your money is tied up in one business for 20 years” – Carolyn Fikke
Though many angel investors have personal passions – for Carolyn, investing in EdTech is how she gives back to women and kids in the community – investing is not a charitable undertaking. Angel investors decide to fund your business because they believe you can create a 10X return on their investment in 5 to 7 years. That means they expect your business to have a successful exit, which is often a purchase by a strategic partner, in a relatively short amount of time. The sooner your company is sold and the investor collects their profits, the sooner they can put that money back to work and invest in other startups.
Are You a Fundable Founder?
“We invest ‘in the jockey not the horse’” – Carolyn Fikke
There are many quantifiable factors that help investors decide whether your company is fundable, but they don’t tell the whole story. With so much uncertainty in the early stages of a startup, angels often rely heavily on their gut feeling about the founders as capable leaders when making investment decisions. Before preparing to fundraise ask yourself, are you hardworking? Can you juggle? Are you coachable? Do you have a clear vision for the future? Can you hire the right team to execute that vision? Do you have command of your business? Do you surround yourself with a solid network of mentors and advisors? Great founders are all these things which enables them to shepherd their company through the inevitable pivots and difficult times before finding their path to a successful company and exit.
Can the Investor Add Value?
“I understand the consumer and retail marketplace. I get it and I can actually add value” – Carolyn Fikke
Angel investors tend to invest in verticals where they feel comfortable. After longstanding, successful and often financially fruitful careers in their respective fields, many angels prefer to focus their investment and energy in familiar sectors and disciplines where they can add the most value. They know the performance indicators relevant to this market and want to see how you stack up to the competition. If you are looking for a variety of help in your growing startup outside just money – angel groups like Golden Seeds offer access to broad array of expertise you can tap into.
Do You Tell a Credible Story?
“I ask myself ‘Do I believe what I was just told?’” – Carolyn Fikke
Spinning tall tales and promises of unicorns amidst massive untapped markets might sound like a good way to pitch based on what you see on TV, but the storyteller founder a myth. Professional investors will quickly use their expertise to question and rip apart every part of your pitch if your story doesn’t quite add up with your numbers. Focus on telling the story backed up by facts of an underserved market niche and proving to the angels you are pitching that the niche is big enough, that your solution is the right one and that only your team can take it there.
Do You Know Your Numbers?
“Know your numbers! Too many women are passionate about telling a cool story and don’t know their numbers.” – Carolyn Fikke
Impressing investors with your pitch and maximizing your chances of getting a check mean combining your passion for your mission with solid knowledge of all the numbers that support your company. You need to clearly articulate the key financial drivers of your business and show that you live with them day to day. Be ready to speak off the top of your head about the Key Performance Indicators (KPIs) relevant your vertical including revenues, growth rates, sales figures, operating margins, CACs, LTVs, marketing costs, conversion rates, and especially monthly burn rates which are often the key to business survival. Don’t wait to be asked about your KPIs – be forthcoming and make your audience see that you are watching them and being constantly thoughtful about your business. Knowing your numbers proves to the investors that you are in full control of your company.
Ready to jumpstart your fundraising journey? Join us at our next #MonarqMoguls breakfast!
Check out more from our #MonarqMoguls Advice series for helpful tips from top investors on funding your female-founded startup.
(Photo by Cathryn Lavery)