David Skok's Fundraising Advice for Startups

David Skok is a serial entrepreneur turned venture capital investor at Matrix Partners. David has also been an early-stage investor and board member at companies like HubSpot, JBoss, and Intacct. We gathered some of his best advice on fundraising, which he shares on his personal blog, forEntrepreneurs: - Your pitch should create a complete narrative: "More important than the specific slides you present is how you weave them together to convince and inspire your audience that you are going to build a successful company. I’m not talking about a made-up story or crazy theatrics. I’m talking about how you put the facts and data together to sell a vision. When investors understand and believe in you and your vision, it increases the value of what you’re selling." - Show investors a true opportunity: You can have a big problem that is real for many people, and you can have an amazing team to solve it. But, you must also explain what has shifted to create the opportunity and how you will enter the market in a way that is defensible. If there’s no opportunity to enter the market and you don’t have a way to outcompete, you have no chance of building a successful company. This is one of the most important pieces of your pitch. - The best pitch is a conversation: "The best pitch is a conversation rather than a sales pitch. And, the best presenters have the ability to listen while they’re talking, watch the audience for clues that what they are saying is resonating, and then adjusting if needed. If you are seeing raised eyebrows and questioning looks, take note and clarify what you’re saying. You may need to push or pull back on the points you’re making." - Confidence + honesty: You obviously want to present a very positive story and appear highly confident about your business. But, overconfidence can be a big red flag. Investors are not just evaluating your business, but also what kind of person you are going to be to work with. Building a business is extraordinarily hard. For it to work, you need to be able to recognize potential problem areas and be open to getting help when you don’t have all the answers. - Raise enough to meet your milestones safely: "Company success is far more important than dilution: a common mistake entrepreneurs make is focusing too heavily on avoiding dilution by raising less money... Raising more cash to provide a cushion is often a very smart way to decrease overall dilution, because it buys time to hit the milestones that optimize the next round."