Raising a round of venture funding is one of the highest stakes business processes we run at a startup. For most founders, it feels like a necessary evil. They need the money, but it takes them away from growing the business. Other founders felt their pain (or experienced it themselves) and built these awesome products to help founders maintain their sanity in pursuit of seed funding, their series A, relationships with venture capital firms, good investor relations and ongoing intuition about the venture market.
Whether you’re actively preparing for a raise or simply trying to maintain some intuition about the venture environment, it’s important to follow investment news and trends. You’ll certainly want to follow news from the likes TechCrunch, VentureBeat and BusinessInsider. Here are some additional resources more specific to venture investing …
Mattermark’s slogan is “Powerful company data to help your business grow.” Particularly in the funding context, it is indeed a powerful set of company data to help your business raise a round. You can easily research the investors of companies similar to yours, whether by company size, sector or business model. You can also stay on top of trends via your feed. Of all of the funding research tools, we think Mattermark has the best and most intuitive interface. There’s even a section dedicated to research; it provides half a dozen datasets including funding rounds and accelerator batches.
Founders are also fans of Mattermark’s “predictive analytics.” Coleman Skeeter, Co-founder & CEO of Truman James says:
“Mattermark can be pretty powerful for prospecting companies. They have predictive analytics around which companies are raising, etc., which helps us target clients. Mattermark has been very useful for us.”
(Mattermark gives prospective users free access for 14 days).
“We use AngelList to keep track of what is going on in the industry and keep up with the major players and startups”
AngelList might be the most beloved tool of the startup and venture community. Its strength is its users. We update our profiles, including our businesses, businesses’ investors, our own investments and even the companies we advise. So when it’s time to research what angels and VCs would be a fit for our companies, AngelList is a rich resource. And FYI – AngelList will help you meet prospective investors via their AngeList Intro feature.
Have you ever read the PitchBook daily newsletter? We’ve found it to be the most comprehensive digest of current deals. It’s easy to skim while you’re waiting in line for coffee or on an elevator. It takes about one minute every day to stay tuned into venture news, find out if any companies in your space have raised and also keep tabs on the investing behavior of some of the funds who could eventually invest in you. Warning: it’s not the most gorgeous interface and their news tends to be more biased towards larger investments ($1million+). But it should still be on your list of daily emails to review.
CB Insights provides a comprehensive view of the investment landscape and positions itself as a prognosticator of venture trends. We particularly liked the investor pages in CB Insights wherein you see a chart of venture activity, as well as the details below. Better yet – you can get a free trial for 30 days.
The truth of the truth about any good lead (in this case, lead = prospective investor, not lead investor in a round) is that it comes from a personal introduction. That’s certainly the case in venture. So LinkedIn should be at least one step in planning your outreach. Here are a few other sites that will be helpful in generating a lead list for your investor outreach.
HINT! Many of these tools specialize in providing lists of hundreds or thousands of leads – largely because they are more of a sales tool than a niche fundraising tool. A word to the wise: when it comes to raising a round, it’s less about carpet-bomb ing thousands of potential investors andmore of an exercise in thoughtful targeting and personalized outreach.
You have to love the beauty in Hunter.io’s simplicity, especially for getting the email addresses of potential investors. Their main product is a simple interface wherein you can enter a domain and get the email addresses attached to that domain. A great option if you know what funds you are targeting.
They also have a great Chrome extension that lets you find email addresses of the site you’re on, and get the email address off of someone’s LinkedIn page.
VentureFocus provides comprehensive investment datasets, much like the research tools above. However, their focus is the actual investor contacts. Depending on the pricing tier you select, you can get anywhere from 100 to 25,000 investors. VentureFocus also provides services to help you with the raise from crafting a cold email to creating a pitch deck.
LeadIQ is another clean, easy-to-use product for making prospecting easier. Say you’re scouring Linkedin and you find an angel that would be perfect for your startup. You aren’t well connected to them, so a person introduction is a longshot. Simply click on the LeadIQ Chrome extension and LeadIQ will generate the lead’s email for you (and load it to a running Google Doc).
Managing Leads & Prospects
“My advice is to think about your fundraise as a sales process. If you think about any good sales process you have the funnel metaphor: you build a list of leads, qualify these leads, then reach out to them and guide them through the stages of the sale. Thinking of it like that gives a first-time founder a process or structure to follow.”
How complex is your fundraising process? If you’re casting a wide net and foresee managing 50+ prospective investors, you could probably benefit from a proper CRM or a CRM dedicated to managing investors. If you’re working with a smaller set of prospects, you might find it just as easy to setup a spreadsheet.
Sure, you could use any CRM or workflow software to manage your investor relationships and fundraising process. But first, consider Foundersuite. It’s a CRM customized for the investment process with a default kanban board set to Research, Contacted, Diligence, Committed & Said No. It’s easy to add investors and move them through the pipe. When you add an investor to your pipeline, Foundersuite attaches all of the information it has on their fund and investments.
And, true to its name, it’s a suite of products to help startups, including investor research tools, an Investor Updator, and templates for pitch decks, models, cap tables, term sheets, NDAs and sales decks.
We think Charlie is the cat’s meow. Their goal is to help you “make a killer impression on whoever you’re meeting.” How do they do it? In advance of any meeting on your calendar, they run a search on the people you’re meeting and send you a one-pager on what’s new with them and their company. In the case of fundraising, it’s particularly useful to be abreast of your prospective investor’s interests and most recent investments.
Here’s Stan Bokov, Co-founder & COO of TradingView on Charlie:
“I use Charlie App a lot. It is a completely awesome tool. It’s a virtual assistant that collects a lot of information on the person you are calling, and emails you everything an hour before the meeting. Charlie App is able to scrape your email and your calendar, and it auto-attaches an entire dossier to the call. It can also suggest ways to start the conversation. It collects random news about the company and delivers everything in a timely and humorous fashion. Furthermore, it’s free.”
Spreadsheets. Or any workflow software.
Want to keep things super simple? Just use a spreadsheet or Trello or Streak or another platform that’s already in your wheelhouse. Label those columns Kanban-style, create your lead and move them through the pipe. Easy breezy. Whatever you need to make your process efficient and keep yourself and your team focused on the actual relationships, not the logistics.
Cap Table Management
Ironically, at Stacklist – a tool review site – we are usually the first to say “Hey, don’t use a tool if you don’t have to! Use Google Docs and spreadsheets till you just can’t anymore!” Well, when it comes to your cap table, we’re big proponents of using software early and often. It doesn’t take long for a cap table to get complex and, especially if you don’t yet have a dedicated CFO or other full-time expertise, some good cap table software can preempt major headaches.
“I wish I had known about eShares when I was starting out. It’s a service for managing your cap tables and option plans. It is such an amazing money saver! If you let your lawyer do all of this for you, it’ll cost you a ton. With eShares, you can manage your cap tables in minutes, and my investors love it. They can go in and see a cap table, with dilution, and see where we stand. Our lawyer recommended it to us to save us money, and we are very grateful!”
eShares is the leading software among startups for cap table management and a favorite among Stacklist contributors. eShares helps simplify cap table management for startups by providing elegant software geared toward venture funding and cap table management. They go a step further than competitors by offering 409A valuations and, as an SEC-registered Transfer Agent, enabling electronic equity transfers. Another plus: employees and investors track their own equity and vesting through eShares.
Capshare is another option for startups looking for cap table management software. While it has a smaller market share than eShares, its fans are passionate. We suspect that their user base is more comprised of later-stage startups.
Reyes is also a fan of Capshare:
“You need to get a Capshare account on day 1 of your new business. There isn’t an easier, more trustworthy way to keep track of your cap table, shareholders, investments, convertible notes, capital contributions, ROI, K-1 information and vesting schedules of employees and directors’ shares. Everything you have to do, that you may not have experience doing, is right at your fingertips in Capshare.”
Capshare has a large feature set, including 409A valuations, a shareholder portal, legal/document automation, analytics and custom reporting as well as consulting. Capshare provides a Lite (free), Pro ($2/shareholder/mo) or Enterprise ($5/shareholder/mo) plan.
Let’s say you need something more than a spreadsheet. But you don’t quite need all the bells and whistles of some of the more complex equity management platforms. Captable.io is a great fit for the founder seeking that middle ground. They position their platform as being quick and easy to setup and use: “Build your cap table in minutes.” And no small thing – Captable.io is free.