Earlier this week we hosted an event at IDEALondon with the founders of three fintechs recounting their journeys to fundraising success. Thanks to Karen Rudich from ELEMENTARYb, Pedram Parhizkari of Beurzbyte, and Ben Schuldenfrei and David Rabee from Factored for sharing their insights with the audience from the Barclays Eagle Labs funding readiness programme.
One of the questions we posed was whether they deliberately sought out ‘smart money’, aka investors with deep expertise who can double as advisors. As David explained, the investors who give the best advice don’t always write the biggest checks. It’s often angels who have the most valuable expertise and prove most willing to engage.
When asked how they found their investors, everyone had an anecdote to share. Karen underlined that it’s a numbers game, and for certain types of founders – for instance, women and underrepresented founders – the odds are further stacked against them. The key seems to be leaving no stone unturned, attending pitch events, asking for introductions, finding out what an investor’s angle is and tailoring the pitch for each new meeting.
Another question that sparked good discussion was around what level of detail investors are looking for. Pedram explained that, particularly at pre-seed, many investors will be less interested in your business plan and financial projections than understanding your team’s background and expertise and why you’re right for this challenge. They’ll also want to understand what exactly you need from them – is it just money or expertise as well? But every investor is different, and others will expect a much deeper dive into metrics like TAM, SAM, customer acquisition costs and the unit economics behind the business.
We wrapped up with a question about meeting co-founders. Ben and David go way back, Pedram met his co-founder through a friend, and Karen shared the methodical process she adopted to work out what areas of expertise she needed to complement her own before combing through her contacts.
All in all, it was a great discussion – thank you again to the panellists, and to everyone who attended and asked questions afterwards.