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Article by Tülin Tokatli, CFA
Founder, Pitch Me First
Continuation of the previous publication “Prepare your fundraising from Institutional investors”
Are you fundraising for your PE or VC fund but worried about the tough competition and high rejection rates? According to a recent survey we conducted with 21 LPs mainly investing in European funds in VC stage, results have shown that over 70% of funds don’t make it past the first meeting with institutional investors, and a whopping over 90% are rejected overall.
However, this is not a death march but survival of the fittest. If you’re willing to stand out and persevere, there are still opportunities to be had.
Here are some tips to help you navigate the fundraising process and increase your chances of success:
Your Background is Your Springboard.
Your track record, background and experience are your launchpads.
Investors want to see proof that you can turn opportunity into profit. Impress them with stories of your successes and even modest achievements, to show that you can keep your head above water even in tough times and that you can bring something new and valuable to the table.
Let your Pitch Deck Tell a Compelling Story.
Your pitch deck should be more than just numbers and figures. It should be a story that resonates with investors, evokes curiosity and paints a clear picture of how you plan to turn a profit. Make your story compelling so that investors are eager to buy into your vision.
Make it slick and professional. Don’t forget that this is one of the first things that investors see and first impressions can immediately put you ahead of the curve.
Reflect Your Identity with an Inspiring Environment.
Your fund’s environment should reflect the aspirations and ambitions of your investors. Whether it’s through your physical location or digital presence, create an environment that resonates with them. A powerful website can be an excellent tool to help you achieve this. There is really nothing better than a user-friendly and interactive display of your portfolio and unique value proposition to communicate your brand.
Be Bold and Confident.
In a crowded market, boldness sets you apart.
Be confident in your approach and showcase your readiness to tackle any challenges head-on. Understanding your market position, your weaknesses (ideally counterbalanced with mitigation points) and strengths are crucial elements to highlight your uniqueness. Project an image that shows you’re not just following trends, but leading the way.
Stay Visible and Vocal.
Out of sight, out of mind.
Behind the institutional titles lie individuals with human sentiments. Recognize that forming connections and building relationships are at the core of fundraising. Treat each interaction as an opportunity to connect on a social level.
Maybe it’s time to up your LinkedIn game?
The Verdict.
Fundraising in the PE and VC industry is a challenging process paved with many unknowns and complicated further by high rejection rates.
But don’t let the numbers hold you back.
Remain determined and focused, nurture your portfolio and your network, be convincing and stay credible. Doing so, you can unlock your potential for success, establish yourself as a leader in the industry and drive your organization forward.
Your next closing may be just around the corner!
