Fundraising

With uncertainty in the VC industry, LPs are being more cautious and scrutinous than in previous years. Meanwhile, LP teams are often understaffed meaning they lack the bandwidth to spend time doing due diligence on the growing number of VC funds. What does this mean for you as you kick off your next fundraise? You need to make it as easy as possible for LPs to understand, analyze, and build conviction about you and your fund. A well-structured, thoughtful data room plays a major role in streamlining the VC fund diligence process. This article highlights how to build a data room LPs will get excited about. What is a Data Room for LPs? A Data Room is a repository comprised of folders, files, and pages created by potential fund managers to give their potential investors access to sensitive information about their team, fund, and track record. LPs use this to ensure a fund meets their own investment criteria. It’s in part a marketing tool, in part a legal requirement, and altogether a critical step in being able to raise capital from Limited Partners. Learn more about Visible's fundraising tools for emerging managers. When do I need to Create a Data Room for LPs? You should start preparing your data room a month or two before officially kicking off your fundraise. At a minimum, you have a solid pitch deck in place and should be familiarizing yourself with an LP data room file checklist to start forming a plan around what content you’re going to need to get in order. Download Visible’s LP Data Room Checklist to start preparing your Data Room. What you need to avoid is having an LP ask for access to your data room and scrambling at the last second to put something together. That’s not the first impression you want to give when you’re trying to get someone to trust you with their money. LP Data Room Pro Tips Include excel files instead of PDFs wherever relevant. Analysts at Limited Partners organizations are going to be extracting and analyzing any data you give them so share it in excel format to make it easier on them. Every LP is different so be prepared to share different Data Room views with different people. Share your initial Data Room with a few LPs you trust and get feedback and then update as needed. Consider sharing a table of contents first, and then asking what an LP needs access to, to save LPs from wasting time digging through all your folders to find what they need. Always keep your founders’ privacy in mind when including information on portfolio companies. Investors have limited bandwidth to spend on diligence. Focus on the quality, not the quantity, of the documents in your data room. What should be included in my Data Room for LPs? We’ve broken down our list below into two sections: Initial Interest Data Room which includes the information you’d want to share with LPs who are just getting familiar with your fund. In-Depth Data Room which includes more sensitive information that you’d want to share only when LPs have expressed serious interest in your fund. Initial Interest Data Room for LPs Cover Letter A cover letter is a great way to add a personal touch to your data room (remember LPs are looking at hundreds of other data rooms) and should include high-level information about the GP and the fund. Your cover letter can answer questions like why you’re starting this fund, why you’re uniquely qualified, and your contact information. Table of Contents Including a table of contents is a great way to quickly help investors navigate to the right place to help them find what they need. Consider making your Cover Letter and Table of Contents public to pique the interest of LPs but make sure the rest of the folders are viewable only upon request. Pitch Deck Your pitch deck, especially if you’re an emerging manager, needs to shine. It is the main qualitative piece of content that LPs will use to vet your fund. If your deck doesn’t resonate or intruige an LP, they may immediately pass on viewing the rest of your data room. The average fund deck is 15-20 pages in length and explains: Your Team — Who is on your team and what relevant experience do they bring. Sourcing Strategy — How are you uniquely positioned to find and attract deal flow. Competitive Advantage — Why will founders choose your fund? What’s your value add? Investment Focus — What are you investing in? Why do you know this market, sector better than anyone else? Track Record — How have previous angel, personal, and private capital investments performed? Fund Structure — What is the size of the fund, stage of investments, and the number of investments. Network — Who is in your corner? Who have you collaborated with that could vouch for you? Appendix — Additional materials for commonly asked questions. The list above is inspired by Signature Block’s post on VC Fund Decks that Close LPs. Investment Process How are you going to find, attract, diligence, invest in, and support deals that are expected to yield a 10x+ return? In this folder of your Data Room, compile content that demonstrates an understanding of your investment sector, market, how you will evaluate risk, and your decision-making framework. Team Don’t skimp out on this section by just including resumes. Especially if this is your first fund, you need to paint a compelling picture that answers ‘Why YOU?’. What special experience and skills does your team exhibit? Why should an LP trust you with their capital and also want to engage with you on a regular basis for the next 10 years? Newsletters or Monthly Updates Your ability to communicate matters. LPs are investing not only for returns but also for insights. Are you able to analyze market trends, draw your own insights, and share them with stakeholders? Excellent! Include examples in this section. Visible lets investors embed Updates directly into their Data Rooms. Fund Model This should be an Excel file forecast of your investment strategy in practice. It is critical to get the math in your model correct. Incorrect calculations in your model signal a poor understanding of VC fund management that will be hard to recover from. Your fund model should include your fund size, average check size, management fees, carry, reserve for follow-on, average valuation, target ownership, etc, as it relates to your IRR goals. To better understand portfolio construction at a high level check out this post. Be sure to share your model in Excel, not PDF. LPs are going to use this file to stress test your model based on different assumptions. Track Record This should be an Excel file spreadsheet detailing your previous investments as well as a roll-up summary. The column headers should include the Company Name, Initial Investment Date, Initial Stage, Current Ownership, Realized Capital, Fair Market Value, Multiple of Capital, and IRR. Ready to take the next steps with Visible? If you’re raising your first fund and don’t have a fund track record, include examples of angel investments, SPVs, or personal investments. Be sure to specify how you found the deal and your specific involvement. Read more about sharing your track record as an Emerging Manager. Due Diligence Questionnaire (DDQ) Think of this as a standardized FAQ that LPs will use to easily understand and compare your fund against other funds. This should be a living document and updated over time as you engage with different types of LPs. No need to recreate the wheel for your DDQ. The Institutional Limited Partners Association (ILPA) has put together a standard template found here. This concludes what should be in your ‘Initial Interest Data Room’. Keep reading to get a better idea of what LPs ask for once you’ve passed the initial stages of their diligence. In-Depth Data Room for LPs The content below is usually only shared when LPs are conducting more in-depth diligence on a fund. It’s not best practice to share these files from the start (unless asked) because investors only have limited attention and bandwidth. In-Depth Data Room Content: References Sample Term Sheet Details on Portfolio Companies Case Studies Limited Partnership Agreement If you’re on your 2+ fund you may also be required to show the following: Previous Investment Memos Audited Tax Returns ESG Policy Conclusion Creating a well-organized Data Room is an important step toward making a good impression on LPs during your fundraising process. Preparing your Data Room in advance will help you stand out in today’s competitive VC fundraising environment. Interested in learning about Data Rooms for VC’s?

Raising capital for a business is hard. On top of building a fundable business, you need to find the right investors for your business. One of the aspects founders will look to first in an investor is their location. Some investors (VCs and angel investors) will invest based on a company’s location. Finding a list of investors in your area can be a great way to start building a fundraising list (of course you’ll want to make sure the investor fits your other criteria too). Related Resource: Venture Capitalist vs. Angel Investor If you are a startup based in Miami or the surrounding area, check out the list of angel investors in the area below: 1. Gold Coast Angel Investors As put by the team at Gold Coast Angel Investors, “Gold Coast Angel Investors is an early-stage investment group based in Miami, FL. We enjoy the process of mentoring and helping aspiring entrepreneurs while pursuing maximized returns… If you’re a business that is ready to pitch to our angels, see more information about getting funding. We try to target South Florida for our investments but look for the best deal possible for our members, whether in Miami, Manhattan, or Menlo Park, CA.” A bit more research on the Gold Coast Angel Investors site and you’ll find that when evaluating a company’s stage and industry, they’ll look for the following (visit the link directly here): 2. Black Angels Miami As put by the team at Black Angels Miami, “We are connecting amazing members/investors and founders. Opening the door to the technology startups eco-system. Enabling access to top-notch investment opportunities across the country. Changing the landscape of venture investing by leveraging the value of diversity. BAM believes diverse perspectives improve investment outcomes. With this in mind, we intend to recruit members of all races, creeds, and orientations while proactively increasing participation by Black investors.” Black Angels Miami does not make direct investment into companies but can make introductions to investors that are fit for your company. You can check out a few of the things they look for in potential candidates below (direct link here): 3. Miami Angels As put by the team at Miami Angels, “Our group is comprised of over 150 angel investors, many of whom have been entrepreneurs themselves. Beyond providing capital, we collaborate with our founders to ensure they have access to talent and future funding… Miami Angels’ broad and diverse membership base allows us to invest across multiple industry sectors at the post-launch Seed Stage. We look at companies where our expertise can have a real impact. We invest in US-based, post-launch SaaS-enabled companies.” You can learn more about what Miami Angels looks for in an investment by using their investment criteria doc: 4. New World Angels As put by the team at New World Angels, “New World Angels is a group of Florida business leaders who provide funding, knowledge, and guidance to entrepreneurs building early-stage companies. We seek entrepreneurs from diverse backgrounds and cultures. We seek to fund entrepreneurs and products that can create real impact in marketplaces and across our society.” New World Angels allows you to apply for investment directly on their website. Before starting your application, you’ll want to make sure that you are fit for them. They lay out criteria below (or direct link here): “New World Angel investors focus on early-stage companies, usually in Florida, that are seeking their first or second major outside investment. We typically make investments ranging from $250K through $2 Million. We can lead larger investment rounds in syndication with other investment firms. We typically focus on companies with valuations under $20MM.” 5. Access Silicon Valley Miami As put by the team at Access Silicon Valley, “Access Silicon Valley is the “virtual bridge” to Silicon Valley, where startup entrepreneurs and serial entrepreneurs in real-time, get access to relevant content, and have the opportunity to interact with, angels, VCs and great entrepreneurs that they otherwise wouldn’t get the opportunity to see, hear or possibly connect with. In addition, we have put together valuable workshops to prepare startup entrepreneurs for the roller coaster ride of the startup world! We encourage you to join us.” Access Silicon Valley does not make direct investment but they host virtual events and offer resources to help entrepreneurs find investors and angel investors in their community. Related Resource: How to Effectively Find + Secure Angel Investors for Your Startup 6. Florida Funders As put by the team at Florida Funders, “Florida Funders is a hybrid between a venture capital fund and an angel investor network that discovers, funds and builds early-stage technology companies in Florida. We exist to evolve Florida from the Sunshine State to the Startup State by ensuring there is as little friction as possible in the ecosystem, that investors have access to meaningful deal flow and entrepreneurs have access to a wide range of accredited investors.” Florida Funders has a thorough list of criteria, FAQ, and information for founders looking for investment (direct link here). You can check out their general criteria below: Visible Helps You Connect With Angel Investors in Miami Finding the right investors for your business is only half the battle. With Visible, you can… Find the right investors for your startup with Visible Connect, our free investor database Manage and track the status of your raise with our Fundraising CRM Upload and share your pitch deck with investors in your pipeline Build and share your data room directly from Visible when working through due diligence and the final stages of your raise. Manage every aspect of your raise all from one platform. Give Visible a free try for 14 days here.

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. The cloud computing industry is a rapidly growing and innovative space attracting significant investment from venture capital firms worldwide. VCs are often attracted to cloud computing startups due to their potential for high returns, driven by factors such as the growing demand for cloud computing services and the scalability and innovation of the industry. Accel estimates, “there is around $770 billion available to buy cloud companies, with $440 billion of cash on the balance sheets of strategic investors and $330 billion of dry powder from technology-focused private equity funds” Reuters reports. Venture capitalist Ben Horowitz has also stated that the shift to cloud computing has created new opportunities for investment and innovation, similar to the shift from centralized mainframe computers to the current distributed model with the advent of personal computers. He predicts that cloud computing will result in a significant wave of technological innovation in areas such as networking infrastructure, storage, and servers. Gartner has forecasted that end-user spending on public cloud services will grow by 20.7% to reach $591.8 billion in 2023, up from $490.3 billion in 2022. The forecast indicates that infrastructure-as-a-service (IaaS) will experience the highest growth rate of 29.8% in 2023. Other segments like platform-as-a-service (PaaS), and software-as-a-service (SaaS) are also expected to see growth, with Gartner forecasting growth rates of 23.2% and 16.8% respectively for 2023. The forecast suggests that inflationary pressures and macroeconomic conditions will have a push and pull effect on cloud spending, while organizations will only spend what they have and cloud spending could decrease if overall IT budgets shrink. Source: Gartner (October 2022) What Makes Cloud Computing Interesting for Investors Cloud computing startups are an attractive option for venture capitalists (VCs) due to their many advantages. One of the most significant advantages is their ability to scale services up or down as needed, which allows them to handle large amounts of traffic and data while also quickly adapting to changes in customer demand. Another advantage is the high gross margin of cloud startups, which is driven by the low variable costs and high demand for cloud services. This means that a cloud startup can generate a high-profit margin even with a relatively small customer base, and with a subscription-based revenue model that provides a predictable and recurring revenue stream. Cloud startups have a global reach, as they can serve customers all over the world, and can offer a wide range of services such as software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS), which allows them to target a diverse range of customers with different needs. The exit opportunities for cloud startups are also quite attractive, including strategic acquisition and IPOs. Overall, the barrier to entry and operational costs for cloud startups are much lower than traditional software companies, making it relatively easy for them to get started with a small amount of capital and have a high earning potential. Metrics Specific to Cloud Companies That Startups Should Be Tracking Tracking vital metrics specific to cloud computing is crucial to ensure its success and growth. These metrics provide insight into the performance, scalability, and efficiency of your cloud services, and can help identify areas for improvement. For example, tracking metrics such as network traffic, storage usage, and server utilization can help a cloud company optimize their infrastructure and reduce costs. Monitoring customer engagement metrics such as sign-ups, retention, and customer lifetime value can provide valuable insight into customer behavior and help inform product development and marketing strategies. Additionally, tracking metrics related to security and compliance, such as data breaches and regulatory compliance, can help a cloud company ensure that they are meeting industry standards and protecting their customers’ data. By tracking these vital metrics, cloud companies can make data-driven decisions, improve their services, and ultimately drive growth and profitability Network traffic: Measuring the amount of data that is transferred in and out of the cloud environment can help identify bottlenecks and optimize infrastructure. Throughput: The number of requests or data transfer per second that a cloud service can handle. Storage usage: Tracking how much storage space is being used can help identify areas where capacity needs to be increased or optimized. Server utilization: Measuring the utilization of servers can help identify underutilized resources and optimize the allocation of resources. Cloud resource costs: Monitoring the cost of resources such as compute, storage, and network can help cloud companies optimize their resource usage and reduce costs. Sign-ups and retention: Measuring the number of customers signing up for services and the rate of customer retention can provide valuable insight into customer behavior and help inform product development and marketing strategies. Customer lifetime value: Tracking the revenue generated by each customer over time can help cloud companies identify their most valuable customers and target their marketing efforts. Data breaches: Tracking incidents of data breaches can help cloud companies identify vulnerabilities in their security systems and take appropriate measures to protect customer data. The number of security incidents and the response time to them. Regulatory compliance: Monitoring compliance with industry regulations such as HIPAA, SOC2, and PCI-DSS can help cloud companies ensure that they are meeting industry standards and protecting customer data. As well as the number of compliance requirements that the company’s cloud service meets. Service availability: Measuring the availability of cloud services can help cloud companies identify and resolve issues affecting service uptime and availability to customers. Latency: The time it takes for data to be transferred to and from the cloud. Painless Metric Tracking with Visible, try for free for 14 days here! Future of Cloud Computing The cloud computing industry is constantly evolving and the future is expected to bring some significant changes. One of the major trends that is expected to shape the cloud industry in the coming years is the increased adoption of multi-cloud and hybrid cloud strategies. Organizations are increasingly recognizing the benefits of using a combination of public and private clouds to meet their specific needs. Multi-cloud and hybrid cloud strategies allow organizations to take advantage of the benefits of different cloud providers and to build more resilient and flexible IT infrastructure. This approach enables organizations to choose the right cloud for the right workload and to avoid vendor lock-in. Another trend that is expected to shape the future of cloud computing is the emergence of edge computing. Edge computing is the practice of bringing computing power closer to the edge of the network, in order to reduce latency and improve performance. As organizations look to support new use cases such as IoT and real-time analytics, edge computing will become more prevalent. As the adoption of cloud services continues to grow, there will be an increased emphasis on security and compliance. Organizations will be looking to protect their data and comply with industry regulations, which will drive innovation in areas such as identity and access management, data encryption, and threat detection and response. Finally, advancements in artificial intelligence (AI) and machine learning (ML) will continue to shape the cloud industry in the future. Cloud providers will continue to invest in these technologies, making them more accessible and affordable for organizations. This will enable organizations to leverage these technologies to improve their operations, automate repetitive tasks and gain insights from data. Resources for Cloud Startups Cloud industry groups like the Cloud Industry Forum (CIF) and the Cloud Security Alliance (CSA) provide information, resources, and networking opportunities for cloud startups. These groups offer information on industry standards, best practices, and regulatory compliance, and host events and webinars to connect startups with other industry professionals. Cloud-focused communities and forums: Cloud-focused communities and forums like Stack Overflow and Quora provide a platform for cloud startups to connect with other industry professionals and share information and resources. Professional services: Professional service providers like Deloitte, PwC, and KPMG offer advisory services and cloud computing consulting to startups. They can help startups with cloud strategy, cloud migration, and cloud optimization. Cloud providers: Cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) offer a wide range of services, tools, and resources for cloud startups. These providers offer various services such as storage, computing power, and databases that startups can use to build and run their applications. VCs Investing in the Cloud Computing Space Ignition Partners Location: Washington, United States About: Ignition Partners, a dedicated early-stage enterprise software venture capital firm, invests based on decades of operating experience and enterprise relationships. We have lived through the transitions from mainframe to mini to PC to cloud. We are the only firm operating with significant footprints in both Seattle and Silicon Valley, and our network has a global reach. Investment Stages: Seed, Series A, Series B, Growth Recent Investments: Snaplogic Archipelago Aviatrix New Enterprise Associates Location: Menlo Park, California, United States About: New Enterprise Associates is a global venture capital firm investing in technology and healthcare. Investment Stages: Pre-Seed, Seed, Series A, Series B, Series C, Growth Recent Investments: Regression Games PixieBrix Timescale Intel Capital Location: Santa Clara, California, United States About: Intel Capital is a force multiplier for early-stage startups – inspiring and investing in the future of compute via investments in Cloud, Silicon, Devices, and Frontier. Investment Stages: Pre-Seed, Seed, Series A, Series B, Growth Recent Investments: SaVia Medical Informatics Astera Labs Mohr Davidow Ventures Location: San Mateo, California, United States About: For 30 years the Mohr Davidow Ventures (MDV) team has invested in early-stage technology-based startups that redefine or create large new markets. The firm partners with exceptional entrepreneurs to build companies where big data, applied analytics, and the reach and power of the web/mobile cloud can be leveraged to drive emerging opportunities in verticals ranging from social commerce to finance to online marketing to consumer-driven healthcare and cleantech IT. Investment Stages: Seed, Series A, Series B Recent Investments: Kabbage Aryaka Webscale Battery Ventures Location: Boston, Massachusetts, United States About: Battery Ventures is a leading venture capital firm focused on investing in technology companies at all stages of growth. With a team of over 30 experienced investment professionals, Battery leverages its people, expertise and capital to actively guide companies to category dominance. The firm has invested in over 160 technology companies worldwide across the communications, software, infrastructure, and media and content industries. Investment Stages: Pre-Seed, Seed, Series A, Series B Recent Investments: Seek AI Mews Galileo Aspect Ventures Location: San Francisco, California, United States About: Aspect Ventures is a venture capital firm investing in the emerging mobile marketplace. Investment Stages: Seed, Series B, Growth Recent Investments: Silverfort Future Family Vida Health F-Prime Capital Location: Cambridge, Massachusetts, United States About: F-Prime grew from one of America’s great entrepreneurial success stories. Fidelity Investments was founded in 1946 and grew from a single mutual fund into one of the largest asset management firms in the world, with over $2 trillion under management. For the last fifty years, our independent venture capital group has had the privilege of backing other great entrepreneurs as they built ground-breaking companies, including Atari, Ironwood Pharmaceuticals and MCI. Investment Stages: Seed, Series A, Series B Recent Investments: Neumora Therapeutics Elicidata Ashby Formation 8 Location: San Francisco, California, United States About: Formation 8, a California-based technology investment firm, focuses on seed, early, and later stage venture investments. Investment Stages: Seed, Series A, Series B, Growth Recent Investments: Aviatrix Ascus Biosciences Fieldwire Looking for Funding? We can help We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey. Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VCs and accelerators who are looking to invest in companies like yours. Check out all our investors here and filter as needed. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors. Related Resource: All-Encompassing Startup Fundraising Guide After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here.

Data rooms are the next step to help us on our mission of giving founders a better chance of success. Data rooms are the culmination of a fundraise, diligence, or M&A event. They combine all of the documents, data, and resources that an investor will use to evaluate a company. With data rooms, you can now manage all parts of your fundraising funnel with Visible. Find investors with Connect, our free investor database. Track your conversations in our Fundraising CRM. Share your pitch deck with potential investors. And communicate with current and potential investors with Updates. Learn more about Visible Data Rooms and how you can leverage them for your next raise below: Organize and Structure Key Fundraising Documents Build data rooms specific to your raise. Organize your data room with folders, upload files, and create pages directly in Visible. Segment and Share Specific Folders Securely share your data with investors. Segment their access by individual folders or give them access to the entire data room. Understand How Investors Are Engaging with Your Data Rooms View analytics to understand how individual investors are engaging with different documents and files in your data room. Data rooms are enabled for all Visible users. Log into Visible below to get started on your first data room below: Create a Data Room Check out a few of our other resources to help get you started: What should be in a data room? How to write a cover letter for your data room How to create a data room How to share your data room How to create a folder in your data room How to view the analytics in your data room Build and share your data room with Visible At Visible, we oftentimes compare a fundraise to a B2B sales and marketing funnel. At the top of your funnel, you are finding new investors. In the middle, you are nurturing and pitching potential investors. At the bottom of the funnel, you are working through diligence and ideally closing new investors. With the introduction of data rooms, you can now manage every aspect of your fundraising funnel with Visible. Find investors at the top of your funnel with our free investor database, Visible Connect Track your conversations and move them through your funnel with our Fundraising CRM Share your pitch deck and monthly updates with potential investors Organize and share your most vital fundraising documents with data rooms Manage your fundraise from start to finish with Visible. Give it a free try for 14 days here.

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. 2022 has been a challenging year in the startup world. After a hot start to the year, funding and growth has slowed. As Tomasz Tunguz pointed out in the chart below, funding has collapsed since October. At Visible, we’ve spent 2022 building tools to help founders update investors, raise capital, and track key metrics. With the help of these 6 new features, founders will be able to level up their investor relations and strike when the funding iron is hot. Check them out below: Share and Comment on Fundraising Pipelines You can now share a fundraising pipeline via link. This allows you to ask current investors or peers for introductions or information about investors in your pipeline. In turn, your investors or peers can leave a quick comment to help make an introduction to investors they know. Customize Fundraising Columns and Properties Our fundraising pipelines have become more flexible so you can further tailor your pipeline to match your fundraise. With customizable fundraising columns and properties, you will be able to select the properties you would like to see at the pipeline level. Check out some of the most popular custom fundraising properties below: Min & max check size Who can make/made a connection? Data room shared? Investor type Will they lead? Log Emails with Potential Investors in Visible With our BCC tool, founders will be able to simply copy & paste their unique BCC email address into any email. From here, the email will automatically be tracked with the corresponding contact in Visible. This is great for cold emailing investors, nurturing investors, and staying in touch with current investors. To learn how to get BCC set up with your Visible account, head here. Automatic Fundraising Follow-up Reminders Over the course of a fundraise, most founders should expect to communicate with 50-100+ investors. In order to best help you stay on top of their ongoing conversations, you can now set email reminders for when to follow up with potential investors. This is a great way to speed up the fundraising process and get back to what matters most — building your business. Pitch Deck Branding and Custom Domains Control your fundraise from start to finish. With Visible Decks, you can share your deck using your own domain. Plus you can customize the color palette of your deck viewer to match your brand. You can check out an example here. Include Pitch Decks in Updates Keeping current and potential investors in the loop is a great way to speed up the process when you are ready to raise capital. In order to best help nurture current and potential investors, you can now include your Visible Decks directly in Updates. This can help when kicking off a raise, nurturing potential investors, or sharing a board deck with your board members. Custom Properties as Merge Tags in Updates As we mentioned above, updating current investors and nurturing potential investors is a great way to speed up a fundraise when the time is right. To best help you customize your Visible Updates, you can now use custom properties as merge tags in Updates. For example, if you’re tracking the city in which your investors live you can use that in an Update. Improved Dashboard Layout and Widgets If you’re sharing Visible Dashboards with your team or more involved investors, you can now customize the layout and include additional widgets (like text, tables, and variance reports). This will allow you to give additional context to any of the data your key stakeholders might be looking at regularly. Our mission at Visible is to help more founders succeed. Over the next 12 months, we’ll be building more tools to help you do just that. Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days.

Tomasz Tunguz, VC at Redpoint Ventures, recently shared a chart (above) detailing the best time of the year to raise capital. 2022 looks a lot different than 2021 (and the previous 10 years). After a hot start, the # of deals has collapsed since October. As fundraising slows and the holidays/New Year approach, founders might want to consider re-grouping and putting together a plan for raising in 2023. Check out 3 ways to get a head start on your 2023 fundraising efforts below: 1. Build the right audience As we mentioned in a previous Visible Weekly, most founders should expect to communicate with 50-100 investors over the course of a raise. When balancing 50+ conversations it is important to make sure you are spending time on the right investors. Use Visible Connect, our free investor database, to filter and sort investors by the fields that matter (sweet spot check size, investment geography, fund size, etc.). 2. Track ongoing conversations 50+ conversations is a lot. If you’re running a fundraising process off the cuff, using the last few weeks of the year to set up a pipeline and outreach process will allow you to spend more time on what matters most — building your business. Check out some tips for setting up a Fundraising Pipeline here. 3. Keep investors engaged with updates If you’re planning on sending an investor update to your current investors at the end of the year, you can use a “lite version” to engage with potential investors (think big wins, fundraising status, high growth metrics, etc). Check out an example here. Reading List The Best Time of Year to Raise for Your Startup Tomasz Tunguz of Redpoint Ventures studies recent funding data to understand the best month to raise venture capital. Read more 3 Tips for Cold Emailing Potential Investors + Outreach Email Template On the Visible Blog, we share a template to help you craft cold emails for potential investors. Read more Founder How-To: Writing Forwardable Emails Stephanie Rich of Bread & Butter Ventures breaks down how founders can best write a “forwardable email” for fundraising. Read more

What is a Community-driven Company? A community-driven business is a company that puts community at its core. This can be a case where the community is the product (e g. Reddit) or where the community is central to the business’s identity and success (e.g. Peloton). A community-driven company is one whose value is its members and its success depends on them. The value that is derived from the community benefits both its members and the company. The community can either be the company’s product or its community is built around its product. These companies are often founded by individuals who believe they can solve problems better through collaboration and are built around a specific mission, problem, or just simply the community itself. Lolita Taub of Ganas Ventures points out that there are various takes on what community-driven companies are but it’s part of what makes this model so special. At Ganas, they focus on companies whose, customers identify as members members are able to create value for other members members start the marketing and sales flywheel She also believes that companies with the community at the core will become unicorns and produce outsized returns. What Makes a Community-driven Company Valuable and Successful? Community-driven companies are becoming increasingly common in today’s competitive environment. In order to survive and thrive, organizations need to adapt to changing customer demands and expectations. Community-driven companies are able to respond faster to these changes because their users are directly involved in decision-making processes. This new way of thinking about customer relationships means that companies no longer focus solely on selling products or services. Instead, they create value for their customers through the experience of the community- redefining the relationship between consumers and businesses. Companies that are driven by their customer base and community are growing at a faster rate than other companies. They also tend to outperform competitors because they focus on solving real problems instead of chasing trends. Which is why community-based businesses are becoming increasingly popular. Some of the other community-driven benefits include: Less marketing spend Brand Loyalty and LTV Lower operating and sales costs (companies can be leaner and small) Retention Referrals Defensible business model (difficult to replicate) What’s a Community-Led Company’s Secret Sauce? Community-led growth (CLG) is a type of go- to market strategy that these companies are using to leverage their communities to sell. The important thing to note here which Lolita points out, is that “community-led growth should not be confused with marketing. Community-led growth companies focus on creating a safe space for their community to come together, share value, create relationships, and best use their products/services to solve a problem or help achieve a goal.”. As a result of nurturing this space, “your community acts as a multiplier for company growth”. Community-driven companies are also often considered more innovative because they focus on solving problems or sharing information, and they get the answers from the people that matter most- their customers as well as enthusiasts on the topic. This approach has become known as ‘community-based innovation’ (CBI). They rely heavily on their customers or consumers to create new ideas, develop new products, and even provide feedback. This also tends to make running a community-driven company less expensive to start and run. Taking feedback or observing what the community is saying gives you the best understanding of customer needs and wants. When you then use this information to shape future decisions you have a competitive advantage and can deliver exactly what is wanted and needed. This also helps build trust between the company and its customers. In addition, it allows the company to stay relevant and responsive to changes in the marketplace. What Might the Future of Communities Look Like? With social media platforms becoming more powerful than ever before, communities are booming. People are creating their own networks, sharing information, and collaborating together. This has led to the rise of the Creator Economy, which has allowed people to monetize their following. According to CMX Community Industry Report, “Communities are cautiously dipping their toes into Web 3.0- 15% of communities are actively working on Web 3.0 focused projects and an additional 17% are considering it. Decentralized autonomous organizations (DAOs) are the most common form of Web 3.0 project that community teams are working on.” Web 3 is not only allowing companies to monetize on their community but their members can now also benefit as well through NFTs and DAOs. What is the Difference Between a Web2 and Web3 Community-driven Company? Ganas Ventures highlights two pain points for each: “Web2 companies – People create content, products, and services – Companies earn money Web3 companies – People/communities create content, products, and services – People/communities earn money” Related Resource: 10 VC Firms Investing in Web3 Companies Additional Resources and Tools for Startups Community-Driven Companies: What They Are and Why We’re Investing in Them CMX Community Industry Report Ganas Ventures Resources Follow Lolita Taub for updates in the space Origami– helps Web3 communities launch and grow their DAOs Paragraph– Paragraph turns your subscribers into members through NFTs which gives your audience ownership in your community. VCs Investing in Community-Driven Companies Flybridge About: Flybridge is a seed and early-stage venture capital firm whose mission is to assist entrepreneurs in growing innovative, global companies. With more than $625 million under management, the firm is focused on seed and early-stage investing in technology markets and is led by a team with domain expertise and more than half a century of combined experience in venture capital. Thesis: We see a vibrant community as a source of competitive advantage and we are excited to invest in companies and entrepreneurs who share our vision for the power of community across a range of sectors. Investment Stages: Pre-Seed, Seed Recent Investments: Dame Products Trend Teal Ganas Ventures About: Ganas Ventures invests in pre-seed and seed Web 2 and Web 3 community-driven startups in the US and Latin America. Thesis: Ganas Ventures invests in pre-seed and seed Web 2 and Web 3 community-driven startups in the US and Latin America. It’s run by solo-GP Lolita Taub. ​​ Investment Stages: Pre-Seed, Seed SV Angel About: SV Angel is a San Francisco-based angel firm that helps startups with business development, financing, M&A, and other strategic advice. Investment Stages: Seed Recent Investments: Kiln Payload FlowForge Lerer Hippeau About: Lerer Hippeau is an early-stage venture capital firm founded and operated in New York City. Since 2010, we have invested in entrepreneurs with great ideas who aren’t afraid to do hard things. Our portfolio includes more than 350 leading enterprise and consumer businesses including Guideline, MIRROR, Blockdaemon, K Health, Allbirds, ZenBusiness, and Thrive. We’re experienced operators who invest early and stay in our founders’ corners as they build iconic companies. Thesis: We seek entrepreneurs with product vision, consumer insight, focused execution, and unwavering ambition. When we are lucky enough to meet such people, our hope is that they will choose us as a long-term partner. Investment Stages: Seed, Series A, Series B, Series C Recent Investments: Anode Labs Onward Bookkeep The Community Fund About: A $5 million early-stage fund that invests in community-driven companies through an investment partner team. Thesis: We’re an early-stage fund that invests in community-driven companies. Investment Stages: Pre-Seed, Seed Recent Investments: Elektra Health Kindra Founders Fund About: Founders Fund is a San Francisco based venture capital firm investing in companies building revolutionary technologies. Thesis: We invest in smart people solving difficult problems. Investment Stages: Seed, Series A, Series B Recent Investments: Namecoach Speak Elemental Machines General Catalyst About: General Catalyst backs exceptional entrepreneurs who are building innovative technology companies and market leading businesses, including Airbnb, BigCommerce, ClassPass, Datalogix, Datto, Demandware, Gusto (fka ZenPayroll), The Honest Company, HubSpot, KAYAK, Oscar, Snap, Stripe, and Warby Parker. Thesis: General Catalyst is a venture capital firm that makes early-stage and growth equity investments. Investment Stages: Seed, Series A, Series B, Growth Recent Investments: Guild OneSchema Buildkite K50 Ventures About: K50 Ventures is the most trusted first-check investor for mission-driven founders building a better future for the 99%. We invest up to $2M in pre-seed and seed stage companies in the US and LATAM that are prioritizing access, affordability, and wellbeing across the categories of Health, Finance, and Work. K50 partners with those who refuse to accept the status quo; those who have a vision for how to radically improve daily life for everyone – in our local communities, and around the globe. Since 2016, we have invested in 170+ companies including Groww, Mammoth Biosciences, Self, Tul, Frubana, Kueski, Fintual, Valon, Real, Osana Salud, June Homes, among others. Investment Stages: Pre-Seed, Seed Recent Investments: June Homes HoneyBee Osana Salud Halogen Ventures About: Halogen Ventures is an early stage venture capital fund focused on consumer technologies prioritizing a female in the founding team.Thesis: Halogen Ventures is an early stage venture capital fund focused on female led consumer technology companies. Investment Stages: Early Stage Recent Investments: Ellevest Vivoo Live Tinted Graph Ventures About: We are a group of founders & operators with experience starting and scaling technology co’s globally. 300+ investments. Investment Stages: Pre-seed, Seed Recent Investments: Tract Comm Technologies Disclo Founder Collective About: Founder Collective is a seed-stage venture capital firm that has invested in over 300 startups, including Uber, Airtable, PillPack, SeatGeek, The Trade Desk, Whoop, and Cruise. Founder Collective’s mission is to be the most aligned fund for founders at the seed stage. FC has offices in NYC and Cambridge, MA and has been the top-rated seed fund on the Forbes Midas list for four of the last five years. Investment Stages: Seed Recent Investments: Kapu Odyssey Energy Solutions Gigasheet Looking for Funding? We can help We believe great outcomes happen when founders forge relationships with investors and potential investors. We created our Connect Investor Database to help you in the first step of this journey. Instead of wasting time trying to figure out investor fit and profile for their given stage and industry, we created filters allowing you to find VC’s and accelerators who are looking to invest in companies like yours. Check out all our investors here and filter as needed. To help craft that first email check out 5 Strategies for Cold Emailing Potential Investors. Related Resource: All-Encompassing Startup Fundraising Guide After finding the right Investor you can create a personalized investor database with Visible. Combine qualified investors from Visible Connect with your own investor lists to share targeted Updates, decks, and dashboards. Start your free trial here.

The General Partner (GP) and Limited Partner (LP) relationship is built on trust. The best way to establish trust with LPs is through transparency, authenticity, and regular communication. When LP reporting is done well, LPs should easily be able to understand how both the fund and the fund manager are performing and be able to use this information to inform their investment strategies in the future. The best GPs view sending LP Updates as a relationship-building activity and as a fundraising tool — not as a way to simply check off a requirement from their LPA’s. For emerging managers, your relationships with initial LPs are of critical importance for your reputation as a fund manager and future fundraising. This rapport forms the basis of the fund manager’s credibility and will surface again when future LPs are doing diligence on the emerging manager. First-time fund managers will need to have clean data to support their track record and positive relationships with current LPs to set themselves up for success in raising additional funds. The Weekend Fund recently wrote a thoughtful article on How to Write LP Updates with four main takeaways: Send LP updates consistently Go beyond the basics Be authentic Don’t share sensitive information without portfolio founders’ sign-off We’ve translated this guidance into actionable steps that can be streamlined with Visible’s Portfolio Monitoring and Reporting tools below. 1. Send LP updates consistently. Weekend Fund Advice — “One of the biggest mistakes new fund managers can make is not sending LP updates consistently. Most send quarterly updates. At Weekend Fund we send updates approximately every two months. Regular, detailed, and transparent updates builds trust with your LPs, which is particularly important if you want them to write a check into your next fund.” Visible provides fund managers with tools to make sending updates to LPs on a regular basis easier. To start, you can Upload Your LP Contacts (including custom contact fields) via CSV within seconds. Then you can create Custom Lists to organize your contacts. We suggest organizing your LPs by Fund and also by whether they’re a current LP or a potential LP. This means within minutes you have all your contacts organized into custom segments that are useful to you. You can then simply choose which list you want to send an Update to in the future. Visible also streamlines the creation of your LP Update content by letting you choose from an Update Template Library. You can easily pull a template into your account, further customize it as needed, and save it as your own template to use for future updates. 2. Go beyond the basics. Weekend Fund Advice — “Of course, you should introduce new investments, share updates from the portfolio, report performance metrics, and other key updates from the fund, but the best updates go a step further to educate and inform LPs. This might include your analysis on the market, perspective on emerging trends, or learnings from experiments.” Visible’s LP Update editor supports rich text, videos, images, files, and perhaps best of all — custom data visualizations. This means you can visualize your custom fund analytics that will resonate with your LPs and embed them directly into your Update. The data is derived from data hosted within your Visible account and updates your charts in real time. It’s also a great idea to include a market overview section at the top of your update to shed light on how you’re evaluating and staying ahead of the curve in the markets in which you invest. This is a great way to continue to instill LP confidence in you as the steward of their capital. On top of that, it’s important to remember that “many LPs invest in funds as a learning opportunity. The updates are the primary artifact to support that learning.” (Source) You can also stand out to LPs by getting creative and embedding a video recording of your recent portfolio updates directly into your Updates. Open the update below to view an example of how a Visible customer incorporates video into their updates — —> View Update Example with Video Embed 3. Be authentic. Weekend Fund Advice — In general, people gravitate toward authenticity. Writing with personality is more engaging and magnetic. LP updates are an opportunity to share your unique voice and build your fund’s brand. The Weekend Fund incorporates authenticity in their updates through their narrative updates and transparency, but also by including personal photos. Visible lets you embed personal photos directly into your Update in two clicks. —> View the Weekend Fund’s Update Template 4. Don’t share sensitive information without portfolio founders’ sign-off. Weekend Fund Advice — “Fund managers often have inside knowledge into how a company is doing. Some founders are extremely sensitive to information shared about their company, even when the news is positive. It’s prudent to get approval for any non-public information shared with LPs.” Visible recommends explicitly asking for portfolio company’s permission to share information with LPs. One way to do this is by incorporating it into the descriptions of your Request blocks. (How to Build a Request in Visible). Here’s an example below — It’s important to remember that as a GP you’re not only competing with other GPs for LP capital but also with every other asset class. So it’s to your advantage to use every tool in your toolkit to stand out and impress LPs. Over 400+ VC funds are using Visible to streamline their portfolio monitoring and reporting processes.

For a bonus episode of the Founders Forward Podcast, we are joined by Mike Evans. Mike is the founder of GrubHub and the current CEO of Fixer — Fixer provides skilled experts, solving a variety of home problems in one visit. About Mike Evans Mike shares the ins and outs of his time building GrubHub — from humble beginnings in his Chicago apartment to the IPO 10+ years later. We cover everything from the difference between quitting and giving up, to building a valuable board, to raising capital, and more. Our CEO, Mike Preuss, had the opportunity to sit down and chat with Mike Evans. You can give the full episode a listen below: What you can expect to learn from Mike Evans: The difference between quitting and giving up Why Mike doesn’t like NPS as a metric How a board can be valuable How to build a list of potential investors Why cash doesn’t fix problems How to turn problems into resolutions Related Resources: Hangry: A Startup Journey Mike Evan’s personal website Building Your Ideal Investor Persona

Last week we covered how many investors founders need in their fundraising pipeline. When communicating with 50+ investors during a fundraise, founders need a system to track and manage their ongoing investor conversations. Default Properties At Visible, we help founders do just this with our Fundraising CRM. Like any CRM, we offer default properties for investor contacts (e.g. potential investment amount, star rating, contact date, follow up date, etc). Popular Custom Properties In addition to the default properties, founders are using custom properties to match their fundraising efforts — check out the most common custom properties below to see how other founders are keeping tabs on their pipeline: Min & Max Check Size — In addition to our default check size property, we are seeing founders track min and max check size amount to get a more accurate look at where their round stands. Connection — Warm introductions are valuable when fundraising. Founders are tracking who made/can make an introduction. Data Room Shared — If a founder is moving an investor down their fundraising funnel, chances are a data room will be shared. In order to keep track of who has access, founders are creating a yes/no property to track who has access. Investor Type — We are seeing founders track the type of investor to have a better look at the mix of investors in their pipeline — e.g. strategic, existing, lead, etc. Will They Lead — Finding a lead investor is a must for a fundraise. Keeping an eye on lead investors is a surefire way to help founders stay focused on the right investors. Of course, these are just a few of the custom properties founders are using — we’ve even seen a few founders track an investor’s favorite sports team or personal interests. Learn more about our Fundraising CRM and give it a try below: Learn More Reading List Level up Your Fundraising Process with Email Syncing In order to best help founders stay on top of their raise, we recently launched a BCC tool to help founders sync emails from outside Visible to the respective investor record in Visible. Read more A Guide to Seed Fundraising The team at Y Combinator shares an in-depth guide covering the ins and outs of raising a seed round. Read more Seamlessly Manage Relationships with an Investor CRM On the Visible blog, we break down what founders should look for in an investor CRM and fundraising tracking tool. Read more

Raising venture capital is a numbers game. The Fundraising Funnel At the top of your funnel, you are identifying potential investors through research, direct outreach, and intros from your peers. In the middle of the funnel, you are sharing your pitch deck, meeting with GPs, and perhaps the entire partnership. At the end of the funnel, there are (hopefully) multiple term sheets and negotiations ahead of closing. This process is full of “nos”, “maybes”, and “ghosts.” Inevitably, different investors will pass for different reasons so it is important to have a thorough list to keep the momentum going. Between our own product, the Founders Forward Podcast, and online resources, we’ve found the following benchmarks for how many investors you need in your funnel: How Many Investors Should You Expect to Target 40+ — Mark Suster of Upfront Ventures, “Ideally, you want to have 40–50 qualified and interested investors in your funnel.” Learn more here. 48 — The average # of investors a Visible user has in a Fundraising Pipeline. Learn more about our Fundraising tools here. 50+ — Gale Wilkinson of Vitalize Ventures, “If you don’t have a list and you’re raising now, don’t worry. Spend a weekend and write down who are your top, you know, 50 to 75 that you want to target?” Learn more here. 60+ — Brett Brohl of Bread & Butter Ventures, “You’re going to have to reach out to probably about 60 funds and have about that many meetings to close a round.” Learn more here. 100+ — Elizabeth Yin of Hustle Fund, “I made up a rule of thumb: 5-100-500. Over 5 weeks, meet with 100 investors to close $500k in your seed round. If you want to close $1m, double all of these numbers.” Learn more here. Before building your list of investors it is important to understand your ideal investor. Once you have an understanding of your ideal investor, check out free databases, like Visible Connect, to find investors for your startup. Give it a try and filter through our 5,000+ early-stage investors below: Find Investors P.S. If you filter by “Verified” that means these investors have personally verified the data in their profile is correct. Related Reads How to Build an Investor List with Gale Wilkinson of Vitalize On the Founders Forward Podcast, Gale Wilkinson of Vitalize Ventures offers countless takeaways to help early-stage founders fundraise — covering everything from list building to ownership benchmarks. Listen now The Fundraising Wisdom That Helped Our Founders Raise $18B in Follow-On Capital The team at First Round Review shares an in-depth guide for running a fundraising process using best practices from their portfolio companies. Read more Building Your Ideal Investor Persona On the Visible Blog, we break down the attributes that a founder should consider when identifying their ideal investor. Read more

Raise capital, update investors and engage your team from a single platform. Try Visible free for 14 days. Being a startup founder is hard. On top of finding customers, hiring top talent, building a product, and managing an acquisition funnel — founders need to secure funding for their business. At a high level, most funding options for early-stage startups are similar. However, there are some nuanced differences based on a company’s vertical or market. Over the last 2 decades, SaaS (software as a service) companies have risen in prominence. At the same time so has the venture capital industry and the funding options available to startups. Learn more about this data from Silicon Valley Bank here. Related Resource: The SaaS Business Model: How and Why it Works Learn more about SaaS financing and funding options below: What is SaaS startup financing and how is it unique? Over the last 2 decades, SaaS startups have become a popular investment vertical for venture capitalists and investors in general. As put by the team at Salesforce, one of the original SaaS companies, “Software as a service (or SaaS) is a way of delivering applications over the Internet—as a service. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management.” SaaS companies can increase margins and build at scale with a smaller team due to the ease of access for their customers. Naturally, monthly or annual pricing (subscriptions) has become the norm for SaaS companies. These areas combine to fuel investor interest as SaaS companies can efficiently grow and become large, profitable companies. As SaaS is still relatively new, so are the funding options. Over the past few years, the funding options available to SaaS startups have been improved and expanded. Learn more about the common types of SaaS funders below: Types of SaaS startup funders As we mentioned above, the funding options available to SaaS startups have improved and expanded over the last 2 decades. The innovation has led SaaS startups to a plethora of funding options fit for any stage. Related Resource: Valuing Startups: 10 Popular Methods Learn more about the most common SaaS funders below: Venture capital As put by the team at Investopedia, “Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.” Venture capital has been integral in the funding of SaaS companies. VCs are generally willing to take risks and fund startups with little to no revenue in the hopes the company will create long-term value. However, this comes with a set of pros and cons — learn more below: Pros Venture capital certainly comes with its list of pros. We boiled down the list into a few key points below: No personal capital of the founding team. Getting a SaaS startup off the ground requires some form of capital investment. To help get things started, VC can be a popular option as it does not require capital (or free time) from a founder. VC requires little traction or data. Traditional funding methods (like bank loans) require collateral or some type of traction. VC investors are buying equity in the hopes that your company will grow into a large company. Lastly, VCs offer extensive networks and resources. VC funds need resources and tools to help founders succeed to stand out among their peers. This can be everything from helping with hiring to helping with product strategy. Related Resource: All Encompassing Startup Fundraising Guide Cons Of course, venture capital comes with its own set of cons. We boiled the list down to a few key points below: Giving up equity. In order to secure venture capital, startup founders need to give up equity in their businesses. This can be costly in the long run. VC pressure. A VC fund’s duty is to generate returns for their LPs (limited partners) with the hopes of raising another fund in 10-12 years. Because of this, some of the pressure to exit or change business strategy might fall on the shoulders of portfolio founders as GPs look to generate returns for their own investors. Notable venture capital funders As SaaS has become a hot commodity in the VC funding space, there are thousands of investors out there. Below are a few of our favorites (check out our free investor database, Visible Connect, to find more SaaS investors): High Alpha OpenView Ventures Harlem Capital Bessemer Venture Partners M25 Related Resource: 23 Top VC Investors Actively Funding SaaS Startups Angel Investors As put by the team at Investopedia, “An angel investor is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.” Related Resource: ​​Venture Capitalist vs. Angel Investor Angel investors invest in a similar style as VCs — buying equity in a business with cash. However, they are often single individuals that write smaller checks and are investing to diversify their assets. Pros Like venture capitalists, angel investors come with their own sets of pros and cons. We laid out a few of the main pros of raising capital from an angel investor below: Like VC, angel investors require founders to spend zero personal capital. This can help alleviate the financial stress of startup and building a SaaS business. Occasionally, angel investors can be strategic investors. Some angels might have expertise in your space or direct experience building a company in your space. This can be incredibly helpful when it comes to developing products, go-to-market strategy, and hiring leaders in the space. Angel investors can be integral in building momentum during a fundraise. Due to their smaller check size and an investment committee, angel investors can make investments quickly. This will help when building momentum in a fundraise. As an added bonus, angel investors often know other investors that can make introductions. Elizabeth Yin of Hustle Fund makes the case for smaller angel checks below: Cons Of course, angel investors come with their own set of cons as well. We laid out a few of the main cons of raising capital from an angel investor below: Lack of experience. Some angel investors might be new to investing which can create a burden for some founders as they might have more frequent questions and asks for founders. Smaller checks. While we mentioned smaller checks can be a pro of angel investing, it can also be a con. With newer funding instruments, these small checks can be rolled into 1 investment there are instances where many angel investors can create a headache on a cap table. Notable angel investors Angel investors are all around you. Angel investors can be anyone from your dentist to a former boss. However, there are a few angel investors that have made a name in the space: Keith Rabois Kim Perell Chris Sacca Reid Hoffman Accelerators and incubators As put by the team at Investopedia, “An incubator firm is an organization engaged in the business of fostering early-stage companies through the different developmental phases until the companies have sufficient financial, human, and physical resources to function on their own.” Related Resource: What is an Incubator? Accelerators and incubators have made a name in the startup space as a valuable resource for companies just getting started with limited to no customers or revenue. Learn more about the pros & cons of incubators and accelerators below: Pros Accelerators and incubators come with their own set of pros and cons. We laid out a few of the key pros below: Peer networking. One of the major pros of going through an accelerator is the networking opportunities with the other founders. By going through an accelerator you’ll be linked to other founders and have peers to learn from and lean on as you build your business. Investment. Many times, accelerators make the first investment in many startups. Over the course of your time in an accelerator, chances are they will help with introductions to potential investors (or even make follow-on investments themselves). Education. Education and programming is built into most accelerators. Over the course of a program, many accelerators will bring in thought leaders and experts to help hone different skills. Cons Of course, accelerators and incubators come with cons as well. We laid out a few of the key cons below: Equity. In turn for investment and resources during an accelerator, you will need to give them equity in your business. Do your research and talk to past founders to make sure trading equity is worth it. Time. Most accelerator programs take place between 10 and 14 weeks. Traditionally they have been in person but there are various virtual programs. For most founders, this is a serious time commitment and could require moving or relocating. Notable incubators and business accelerator programs Since Y Combinators’ inception in 2005, accelerators and incubators have become well-known in the startup space. Check out a few of the most popular accelerators and incubators below: Y Combinator Techstars Expa To find more accelerators, check out our saved list in Visible Connect, our free investor database. Revenue-based financing As put by the team at Investopedia, “Revenue-based financing is a method of raising capital for a business from investors who receive a percentage of the enterprise’s ongoing gross revenues in exchange for the money they invested. In a revenue-based financing investment, investors receive a regular share of the business’s income until a predetermined amount has been paid.” Pros Revenue-based financing comes with its own set of pros. Check out a few of the key pros below: Maintain ownership. Revenue-based financing does not require giving any equity to investors. This means all existing members on the cap table will not be diluted. Faster funding. As we mentioned above, raising venture capital is very much a process. Due to this, it can take months to receive capital. Revenue-based financing can be procured in a matter of days or weeks. Cons Of course, revenue-based financing comes with its own set of cons too. We laid out a few of the key cons below: Requires revenue. Most early-stage companies likely have little to no revenue (and when they do, it is largely unpredictable). This can make revenue-based financing not viable until later stages. Future payments. Revenue-based financing requires a monthly payment. Most early-stage startups are generally cash conscious and would prefer to make monthly payments. Venture debt As put by the team at Silicon Valley Bank, “​​Venture debt is a type of loan offered by banks and nonbank lenders that is designed specifically for early-stage, high-growth companies with venture capital backing. The vast majority of venture-backed companies raise venture debt at some point in their lives from specialized banks such as Silicon Valley Bank.” Pros Venture debt comes with its own set of pros and cons. We laid out a list of the key pros of venture debt below: Debt over equity. As we’ve mentioned previously, equity is the most expensive asset a startup has. Venture debt allows you to avoid giving up any additional equity. Timeline. Venture debt is commonly tagged on at the end of a venture capital round. Because of this it can move quickly and offer an extended runway for startups Cons Of course, venture debt comes with cons too. Check out a few key cons of venture debt below: Financial covenants. Venture debt comes with a set of required performance metrics. The penalties for missing the required financials can be large for startups. Future funding. Having debt on a balance sheet can be a negative signal for future funders. Alternative types of funding The SaaS funding options above are a few of the most common. However, SaaS funding options have continued to evolve over the last decade. Check out a few different alternative SaaS financing options below: Crowdfunding As put by the team at Investopedia, “Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives, and venture capitalists.” Bootstrapping Bootstrapping is when a founder (or founding team) starts a company by using their own capital and taking no outside capital. From here, bootstrapped companies generally use company revenue to fuel the growth of their business. Related Resource: Bootstrapping 101: Pros & Cons of Bootstrapping Your Startup Nondilutive Options Over the last few years more nondilutive funding options have been created for SaaS companies. One of the most popular is Pipe. As they put it, “Pipe transforms recurring revenue into up-front capital for growth without dilution or restrictive debt.” Related Resource: Checking Out Venture Capital Funding Alternatives Which is the most popular funding source for SaaS startups? Traditionally, raising venture capital or bootstrapping a SaaS startup has been the most popular funding source. As the options available to SaaS startups, the most popular options will ebb and flow. However, venture capital will likely always find itself as the most popular option as more SaaS companies create outsized returns for VCs (fueling more VC investment into SaaS companies). At Visible, we like to compare a venture fundraise to a traditional B2B sales and marketing funnel. At the top of the funnel, you are adding new investors, nurturing them with meetings and updates in the middle, and ideally closing them as new investors at the bottom of the funnel. Just as a sales and marketing team have dedicated tools — we believe founders should have the same to manage their most expensive asset, their equity. Find investors for your startup, share your pitch deck, nurture them with updates, and track your conversations all from one platform — give Visible a free try for 14 days here. Succeed in your venture capital efforts with Visible Determining the right funding option for your startup is only half the battle. If you’re raising venture capital — finding the right investors and having a game plan to manage your fundraise will allow you to spend time on what matters most, building your business. Find investors for your startup, share your pitch deck, nurture them with updates, and track your conversations all from one platform — give Visible a free try for 14 days here.

At Visible, we are on a mission to help more founders connect with investors — one of our key tools to help do this is “Decks.” This helps founders share any PDF document with potential investors and colleagues. It enables founders to share documents with security and peace of mind, they know who is viewing their document and the amount of time spent. We are regularly asked how to construct a pitch deck by startup founders. While there is no silver bullet when it comes to building a pitch deck, we can share the data and best practices we have seen from other founders. We’ve collected thousands of data points related to pitch deck sharing. Learn more about best practices for crafting and sharing your pitch deck below: The Ideal Startup Pitch Deck Length The biggest theme we identified is that less is more. The ideal deck size for a stakeholder to view your entire slide deck is 12 slides or less. We took a look at all decks that had a 100% completion rate. We found across the data set the average length was 12.2 pages/slides. The average # of slides of a deck uploaded to Visible is 18 slides with a median of 16. Learn more about how the specific slides and content you should be creating in our pitch deck guides below: Tips for Creating an Investor Pitch Deck 18 Pitch Deck Examples for Any Startup How to Pitch a Series A Round (With Template) Sharing Your Pitch Deck A pitch deck can be a powerful tool to help founders tell their story during a fundraise. Check out a few of our tips for sharing your pitch deck below: When to Share a Pitch Deck? There is a popular debate about whether or not to share your pitch deck prior to a meeting with an investor. Generally, we find it best to share your entire pitch deck until after a meeting. This will enable the pitch deck to be a tool for you. It will be 10-13 slides, that can be a refresher for the investors as to what your company is about. The market you are looking to penetrate. Investors can then click through your slides after your meeting as they discuss and weigh the investment opportunity. The Teaser Pitch Deck However, we suggest sharing a short (or teaser) pitch deck with investors before a meeting. This should be around 5 slides and give investors the context they need about your company to have a material discussion about your business in the first meeting. Brett Brohl of Bread & Butter Ventures shares what he likes to see in a teaser pitch deck below: Related Resource: Our Teaser Pitch Deck Template No matter how you decide to share your pitch deck, remember to keep it at a reasonable length for investors to easily digest. As our data points out, early-stage startups should try to keep their pitch deck to 14-15 slides at most. Keep things simple. Be brief. Be clear with your value proposition. The average minutes spent viewing a deck is 19.4 minutes. Make that 20 minutes count. As always, it is important to create the pitch deck that is right for your business. Some may require more or fewer slides than others! Share Your Pitch Deck with Visible Fundraising oftentimes mirrors a traditional B2B sales process. You are adding investors to the top of your fundraising funnel, nurturing them throughout with meetings, email, and updates in the middle, and ideally closing them as new investors at the bottom. Just as sales & marketing teams have tools to understand how leads are engaging with their emails and content, the same should be true for a fundraise. By having a tool in place to understand how investors are engaging with your pitch deck, you’ll be able to spend time with the investors that are most interested in your business. Upload your pitch deck, track the progress of your fundraise with our Fundraising CRM, and share Updates along the way with potential investors using Visible. Give it a free try for 14 days here.

Founding and growing a startup is difficult. On top of developing a great product or experience, founders need to hone all aspects of their business — financing, hiring, etc. Founders are faced with countless funding decisions – none of which come easy. On the Visible Blog, we oftentimes talk about venture capital. However, there are other options that are better suited for some companies. One of which is bootstrapping. Related Resource: Alternatives to Venture Capital Learn more about bootstrapping and what it means for startup founders below: Defining Bootstrapping in the Startup World As defined by the team at Investopedia, “Bootstrapping describes a situation in which an entrepreneur starts a company with little capital, relying on money other than outside investments. An individual is said to be bootstrapping when they attempt to found and build a company from personal finances or the operating revenues of the new company.” Related Resource: Bootstrapping a Beauty Brand with Aishetu Dozie, CEO of Bossy On the VIsible Blog, we generally write about how founders can leverage outside financing (like venture capital and angel investors), to fund their business. Bootstrapping foregoes outside funding and requires a founder to leverage their personal savings, credit, time, and customer revenue. The Pros and Cons of Bootstrapping Bootstrapping can be extremely beneficial for founders. However, the benefits come with real risks. Learn more about the pros and cons of bootstrapping below. Related Resource: Building a Calm Company with Tyler Tringas Pros of Bootstrapping Bootstrapping is a huge bet for a founder to place on themself. By steering clear of outside funding, founders will need to leverage their own time and resources to build their business. However, a founder placing their own resources on the line does not come with the opportunities to benefit. Learn about the pros of bootstrapping below: It Allows Owners to Retain Full Ownership of Their Company One of the downsides of taking on venture funding is the loss of ownership and equity. One of the major upsides of choosing to bootstrap a business is the exact opposite. When choosing to bootstrap a business, founders retain full ownership of the business and will experience all of the upsides in the event of a successful exit or deal. It Makes Owners Create a Model That Works When bootstrapping a business there are no “safety nets.” While most founders do not need a forcing function to help them prove a model, bootstrapping heightens the stakes. Bootstrapped founders are risking their own resources so it is vital that they build a successful business. Path to Profitability A venture capitalist’s job is to create outsized returns for their limited partners. This means that VCs are in search of companies that can grow into huge companies to create returns. Chances are that outside investors will push for quick growth. When bootstrapping, founders will likely have a strict budget and need to grow within their own means. While it can possibly limit the possibility of hypergrowth, it can be a great way to grow sustainability and build a long-term company. Cons of Bootstrapping Just like any funding option, there are cons of bootstrapping as well. Weighing the pros and cons is a great way to help a founder determine what funding option is right for their business. Learn more about the cons of bootstrapping a business below: It Can Be Riskier As we laid out above, one of the biggest perks of bootstrapping a business is maintaining ownership and equity. On the flip side, this means there is no one else to share risk with a founder. When bootstrapping a business, a founder will put their own resources on the line. If something goes south, it not only impacts the business but has the ability to impact a bootstrapped founder’s personal finance as well. Bootstrapping Only Offers Limited Support Being a founder is difficult. There are very few individuals who understand what it takes to find and grow a business. Because of this, it is important for founders to learn from their peers, investors, and leaders in the space. This comes naturally with some funding options. For example, venture-backed companies can lean on investors for help and future capital. For bootstrapped founders, chances are they will have fewer natural networking opportunities with investors and other founders. It Requires Many Strengths When building a company, leaders need to have strengths across the board – they might be a technical founder or great marketer, etc. Many founders, they can lean on co-founders and their investors to help balance their weaknesses. For a solo founder or bootstrapped founder, they will need to rely on themselves across the board. Stages a Bootstrapped Company Goes Through Companies go through different stages and lifecycles. At their core, most startups follow a similar journey. For venture-backed and bootstrapped companies, this journey might look slightly different but is similar at their core. Learn about the basic stages a bootstrapped company goes through below: 1) Starting Stage When starting a bootstrapped business, it likely looks no different than starting any other business. The founder or founding team likely has an idea or big problem they’d like to solve. From here, there are the formalities of setting up a business. However, a bootstrapped founder will have the ability to pursue their new business on the side (or dedicate they full day-to-day). Because there are no outside stakeholders, the pace at which a bootstrapped founder launches is solely up to them. 2) Customer-Funded Stage Once a bootstrapped founder has built a product and determined channels for distributing their product, they can begin to bring in revenue from customers. While bootstrapped founders can work at their own pace, bringing in customer revenue is vital as it is the likely source of financing and future growth. 3) Profitability & Growth If a bootstrapped founder can build a product and find their first customers, the next step is profitability and growth. Because bootstrapped companies use their customer revenue to fuel their growth, it is incredibly important they are wise with their spending decisions as customers grow – they likely won’t have the cash cushion and safety net in the early days. Find Out More Information on Bootstrapping Bootstrapping can be a great way to fund and build a startup for many startup founders. At the end of the day, founders need to evaluate their funding options and determine what is right for their business. To learn more about bootstrapping and funding a business, subscribe to the Visible Weekly. We curate the best resources to help founders hire top talent, raise capital, and build great products. Sign up here.

Fundraising is a challenge. We find that the most successful founders treat a fundraise like a traditional B2B sales process. It is a game of relationships and is important that you are connecting with and finding the most qualified investors for your business — just as a sales and marketing team finds the best leads for their product. Related Resource: 9 Tips for Effective Investor Networking In order to help you better connect and find the right investors for your business, we’ve put together a quick guide below: Understanding the Different Types of Investors First things first, you need to understand who you are talking to. At the highest level, there are different types of investors that are willing to fund privately held companies. From here, you’ll be able to take things a level deeper and identify the specific investor and firms that are best suited for your business. Related Resource: How To Find Private Investors For Startups Check out some of our tips for connecting with different types of investors below: Angel Investors A common type of startup investor is the angel investor. As we put in our post, How to Effectively Find + Secure Angel Investors for Your Startup, “An angel investor is generally a wealthy individual who is looking to invest spare cash in an alternative investment.” A few tips when it comes to connecting with angel investors: Warm introductions — find if anyone in your network can make an introduction Social media — some angel investors might have an online presence. Check out Twitter, LinkedIn, etc. to see if there are any in your network VC Firms The most common type of startup investor is a venture capital firm. As defined by Investopedia, “A venture capitalist (VC) is a private equity investor that provides capital to companies with high growth potential in exchange for an equity stake.” VCs are professional investors so it is important to have a strategy when finding and pitching them. A few tips below: Warm introductions — like angel investors, use your immediate network to find introductions to VCs in your network. Existing investors, other founders, and customers can be great sources of warm introductions Cold outreach — If you do not have any connections to a VC fund, you can use cold outreach. To learn more, 3 Tips for Cold Emailing Potential Investors + Outreach Email Template. Events — Many VC funds host events dedicated to founders, or attend larger startup events. Leverage these as an opportunity to meet and connect with targeted funds. Related Resource: Investor Relationship Management 101: How to Manage Your Startups Interactions with Investors Banks Traditionally, banks are a source of capital for businesses. With early-stage startups, bank loans have become less common as they are not able to take the risk on early-stage companies. However, for later-stage and proven startups, bank loans can be a strong funding option. A few things to keep in mind: Strong performance — your business needs to demonstrate a strong track record and predictability that you can pay back the bank Collateral & cash — having high-value collateral and a strong cash position will increase the likelihood that a bank approves your leone. Alternative Investors New funding options have taken the startup world by storm over the last few years. Depending on your business and model, some of the newer funding options can be an option. Check out a few of the common options below (from our post, Checking Out Venture Capital Funding Alternatives) Pipe — As their website puts it, “Pipe turns MRR into ARR.” So how does it work? Pipe looks at your monthly contracts and offers a cash advance on the annual value of those contracts. In turn, they will take a small % of that contract for offering the cash advance. Calm Company Fund — Calm Fund uses their own financing instrument called a Shared Earnings Agreement (SEAL). Essentially, SEALs are geared towards bootstrapped companies that are profitable or approaching profitability. Corl — Rather than explaining it ourselves we’ll let the Corl website explain what they do. “Corl uses machine learning to analyze your business and expedite the funding process. No need to wait 3-9 months for approval. Find out if you qualify in 10 minutes.” 6 Helpful Tips for Connecting with Investors No matter the type of investor, there are common tips and strategies that you can use to connect with investors. Making warm introductions, or connections through people in your network, is typically the best way to get an introduction to an investor. However, attending events, networking with peers, cold outreach, and your current investors are great opportunities. Check out some tips below. Related resource: How to Get Into Venture Capital: A Beginner’s Guide 1) Use the Right Tools or Platform Just as sales and marketing teams have dedicated tools for their process, so do founders that are fundraising. By using a tool to find and connect with qualified investors, you’ll set yourself up for success and smoother fundraise. At Visible, we offer a free investor database, Visible Connect, that allows you to filter by the fields and properties that are most relevant to your business. For example, you can search by their investment geography, stage, market, and more. Give it a try here. From here, you can add your investors directly to a Fundraising Pipeline in Visible. This is the headquarters of your fundraise and allows you to keep tabs on the status of conversations and pitches throughout your fundraise. Give it a free try for 14 days here. Related Resource: A Step-By-Step Guide for Building Your Investor Pipeline 2) Target the Right Investors Spending time on the right investors is a vital part of a successful fundraise. Just as a sales team would only spend time on the most qualified leads, the same is true of a fundraise. By building out a profile of what your ideal investor looks like, you’ll be able to focus on the investors that truly matter to your business. Learn more about determining your ideal investor profile in our post, Building Your Ideal Investor Persona. 3) Build a List Once you’ve determined who the right investors are for your business, you need to build a list. Over the course of a fundraise, you will hear countless “Nos” so it is important to have a list of investors to speak with. For an early-stage company, we generally suggest having somewhere around 50 investors to speak with. Brett Brohl of Bread & Butter Ventures recommends talking with at least 60: 4) Tell a Data-Backed Story At the end of the day, investors want to fund companies that have the ability to turn into huge exits and create returns for them and their LPs. In order to help paint the picture of your potential for growth, you need to use data that helps supplement the story. When discussing with potential investors, you do not need to go overboard with the data you are sharing. Stick to a metric or 2 from your own business that demonstrates traction. You can even share compelling data from the market that shows why you are set up for success. Related Resource: How to Model Total Addressable Market (Template Included) 5) Reach Out Having your assets in place is only half the battle. Having a concise plan and tone for reaching out to potential investors is a must. Generally, finding warm introductions to your ideal investors should be the first line of defense. If you are unable to find warm introductions, don’t be afraid to use cold outreach. Related Resource: 3 Tips for Cold Emailing Potential Investors + Outreach Email Template Learn about what Ezra Galston of Starting Line Ventures likes to see in cold outreach below: As we previously mentioned, chances are you will be talking to 50+ investors over the course of a fundraise. It is important to have a game plan and process in place to track conversations and the status of your raise. With Visible, you can find investors, add them to your pipeline, and track the status of your fundraise all from 1 tool. Give it a free try for 14 days here. Related Resource: How To Write the Perfect Investor Update (Tips and Templates) Visible Can Help You Connect With The Right Investors Fundraising is comparable to a traditional B2B sales and marketing process. Just as any sales process starts by finding the right leads, so should a fundraise. Use Visible Connect, our free investor database, to find the right investors for your business. Give it a try and start searching for investors for your business here.