Ready to kick off your journey? 🚀
-min%20(1).webp)
Part 4 of our Comprehensive Fundraising Guide with Indie CPG & Amirt Richmond discusses strategies on all things fundraising. From researching the right investors, customizing outreach emails, and securing and preparing for meetings, this guide covers all the bases.
In P.2 of our guide, we outlined how to make a target list of funds to pitch. Now you need to decide WHO to pitch at the fund, as some funds have investment team members focused on specific sub-sectors of CPG like beverages, wellness, or pets. You should also look for signals in their past work or volunteering that they’d understand your brand more than other investors. Maybe they worked at a brand in your aisle, invested in a complementary brand, or published a market landscape about your sector hinting they want you to reach out.
Look up their profiles on LinkedIn and Twitter, and maybe they publish a blog or newsletter too. Do you have anything else in common with them on your resume or values alignment? Their social media profiles can also give you a sense of their persona outside of work. Maybe you share a cultural connection with them?
From my experience, Analysts and Associates at CPG funds actually have a voice at the table compared to tech funds where the teams are much larger and structured. If a junior VC reaches out to you, they’ve likely already spoken to their team about your company and it’s worth an informal chat about your brand. It’s also possible that one of the Partners at the fund asked them to reach out to you based on thesis alignment.
Whether you’re sending a cold email or an easily forwardable email for VC intros, ALWAYS customize them for the recipient. The majority of the emails can be the same, with personalization for their name, fund, and a sentence or two about why you’re specifically interested in meeting them. A simple template should include:
Now that you have upcoming pitch meetings, you want both parties to be prepared. If you haven’t already, send the potential investor a link to your deck ahead of your meeting. Use a digital link like Docsend so they always have the most updated information and so you can get analytics of who is viewing your deck. A Loom pre-recorded video is another way you can send your pitch ahead of time in a more interactive format.
In Part 2 of our fundraising guide, we encouraged you to narrow down your target list of funds by stage alignment, so at this time you should only be pitching funds that write the size checks you are seeking.
Hopefully, investors take the time to read your deck and website before the meeting. But in case they haven’t, don’t use the 30 minutes to just read through your deck. At the top of the call, ask them if they’d like a full overview or summarized pitch, which can give you a hint if they actually read your deck or not yet ;)
On your side of the table, you can practice your pitch with a co-founder or advisor, make sure you feel relaxed right before the call, and try not to schedule meetings right after VC pitches in case the calls go over on time.
Remember Part 3 of our guide when we said you need to communicate more traction than vision in the first half of your deck? This is even more important in a live pitch meeting to keep your audience engaged and get them interested in a second meeting. The most engaging pitches are conversations; they shouldn’t feel like a cringe interrogation for either party. You are both trying to get to know each other to gauge potential for a long-term partnership, so start a list of goals you want to achieve after every pitch meeting. A few suggestions for goals:
If you need to reschedule your pitch for a reason out of your control (e.g. a company or family emergency), kindly let the investor know as soon as possible and suggest a few alternative times. If the VC asks to reschedule your meeting, don’t take it personally as they may have overbooked their calendar or have a last-minute work trip, or they might also be working through an emergency in their life. Be understanding and patient.
Before a pitch call or meeting ends, you should have a sense of whether the investor is interested in learning more about your brand or not. A few ways to gauge interest at the middle to end of the meeting:
If they say no on the call or at the end of the meeting, do your best to still follow up and thank them for their time. Most people working in venture capital want to build a career as an investor at multiple funds over the next two decades. You might have another chance to work together when your company has scaled, or if they move to another fund that is more in your size/thesis zone.
When you hear your brand is in their thesis, but too early for their fund, you have a few options:
We know it’s a challenging fundraising environment, but that doesn’t mean you have to go into a long-term partnership with funds you aren’t jazzed about working with. Just like funds are now doing due diligence on your brand, it’s important to keep a list of your dream investor attributes as well as reasons for YOU to say no.
Investors are in the business of evaluating and supporting brands via dozens of pitches each month. Your priority is to secure working capital as soon as possible. This means you’re in a rush to raise faster than they are to deploy their capital under management, so it’s important to stay calm and cool.
The only way you can speed up their decision to invest or not is to have thoughtful answers to their questions and all of your materials ready that they might ask for. Additional materials may include a financial model, data room with your retail and/or DTC traction, and references from your other investors and advisors.
Be transparent about your timeline to close this round, but don’t try to force a VC into feeling fomo. They have to feel that on their own to build conviction and team-wide excitement about your brand.
The problem with communicating your fundraising close deadline too early in a pitch conversation (especially before you have a lead investor) is it will undoubtedly change in this time in history. When you go back to the same fund saying there’s still time to participate after you told them they missed the deadline, it means you didn’t get the commitments you thought were done deals. Better to say you aim to close by the end of the quarter or before the summer, and then keep in touch with them until they tell you they are going to pass on this round.
Hey, we know nobody likes to hear the word no, but it’s a means to an end during the funding process. Is there someone on your team, maybe a co-founder, senior leader or advisor, who can be your fundraising co-pilot? Having a trusted collaborator to work through deck feedback, secure introductions, and manage rejection will do wonders for your mental health over the four to six months it will take to secure new working capital.
Fundraising is a numbers game where you’re likely to hear no from most of the VCs you pitch. This is why we encouraged you to make a detailed target list of funds aligned by stage and thesis, so that when you hear no, it’s from investors who have context about your sector and insights from complementary brands they’ve spoken to recently via pitches and their portfolio companies.
How you respond to hearing no from an investor will also determine if there is an opportunity to partner in the future, or if they might refer you to another fund.
Additionally, consider getting comfortable with rejection outside of fundraising. You might try: