Investing is a necessary part of the startup process. Too often, founders look at investor networking as a daunting responsibility. The emotional element that comes with inexperience can get in the way of what should be a positive opportunity for growth and funding.
Missouri Innovation Center exists to provide much-needed support to high-growth startups — including in the area of funding. Our staff of experienced professionals and mentorship network can coach and support startup teams as they prepare to make presentations, tell stories, and connect with angel investors and venture capitalists (VCs) at in-person events.
If you are a growing startup in the life sciences sector that is looking for financial support, it’s important that you go into each networking opportunity with the tools, mindset, and strategy required to build meaningful connections. From targeted research to authenticity, cohesive storytelling, and more, here are some top tips from a leading incubator to help you network with investors at events.
Preparation: Before the Networking Event
Networking with fundraisers should never be an ad hoc or unplanned activity. If you want to outshine competitors and attract funding to your startup, you need to shine out with a clear, authentic, and compelling appeal. This starts with thorough preparation in two key areas: market research and your brand’s story.
Research and Strategic Planning
You don’t want to waste anyone’s time when pitching your business, which is why it’s important to narrow the options for your investor network before you begin building it. Investors tend to focus on businesses in specific industries, markets, and niches. In areas like life sciences, which Missouri Innovation Center companies specialize in, this could mean targeting a group like Centennial Investors, Missouri Technology Corporation, St. Louis Arch Angels, Mid-America Angels, and similar groups.
As you consider your options, review each funder’s portfolios and preferences. What are the kinds of companies they invest in? How does your startup’s current appearance align with those in an existing investor’s portfolio? If you’re working with an incubator like MIC, you can leverage our network and resources to accelerate this research process.
Another area to keep in mind is your own documentation. Prepare comprehensive reports, analysis, and data on your company ahead of time. Also, have a clear business plan with detailed descriptions of how funding will help you grow. Having these materials ready to go can make a good initial impression.
Crafting Your Startup’s Narrative
Along with research, you want to consider your startup’s story. The launch and early growth phases of most businesses are exciting times with plenty of things to share. However, the way you present that story can either hurt or help your cause.
Keep your elevator pitch to between 30 and 60 seconds. This is an ideal span of time to maintain an investor’s interest. Use it to highlight the most relevant things each investor will want to hear based on your research (see the previous section). In essence, this is your hook. If it works, you can keep talking with hope of success. If it fails, you’ll immediately lose interest, no matter how compelling the rest of your story might be.
Once you have an investor’s interest, continue to emphasize their preferences. As you do so, succinctly weave the most important parts of your startup story, growth plans, and funding needs into the conversation.
At Missouri Innovation Center, we provide the experience and resources required to ensure your story’s narrative stands out and emphasizes the right things. This is how we’ve helped countless life science brands, like Elemental Enzymes and Endevica Bio, gain the attention of investors. If your initial pitch and follow-up conversation are falling flat, a coach can help you identify the areas to clean up.
Networking Strategies and Best Practices
Once you’re prepared, you want to employ several best practices in your face-to-face opportunities. Here are a few networking strategies to keep in mind.
Event Engagement Techniques
When you’re at a live event, you want to approach investors professionally. As you present your elevator pitch, watch for investor reactions and whether or not they signal interest. Use effective communication strategies, like providing clear, concise, actionable information. If you’ve done your investor research, tailor the information to the parts of your startup that uniquely interest their investment portfolio track record, as well.
Storytelling and Presentation
When it comes to telling your startup’s story in real time, focus on your unique value proposition (UVP). Communicate the most important factor or factors that set your idea apart from existing industry norms. Do this in a manner that communicates facts while balancing confidence with humility. Demonstrate market understanding, as well, by using data and metrics in strategic moments for maximum effect.
Missouri Innovation Center’s Unique Value Proposition When Networking
If you feel your startup team isn’t prepared to make the most of networking, it’s worth investing in further preparation before you get your shot at impressing an investor. Applying for a comprehensive incubator like Missouri Innovation Center can help. While we provide physical office spaces, labs, and other brick-and-mortar resources like most incubators, we go further by offering access to a robust mentoring and coaching program.
This group goes beyond startup advice and can help you prepare proposals for investors, as well. From pitch preparation workshops to unique access to life science-focused investor networks, MIC is able to fast-track the startup VC networking process.
Post-Event Follow-Up Strategies
Once you’ve presented your pitch to investors, it’s important to follow up. The way you do so is just as important as the act itself. Effective communication can keep you on an investor’s radar post-event and can optimize your chances of gaining their attention and funding. A few follow-up tips include:
- Focusing on the long-term relationship aspect with new investor connections. (I.e., don’t just go for an immediate answer on potential funding.)
- Track and manage investor connections to ensure that you are connecting with them at reasonable intervals without excessive communication or too intermittent gaps.
- Leverage Missouri Innovation Center’s support in ongoing interactions by working with our professional, experienced team with each message and request.
- Maximize your digital strategy: Make sure you are also considering any digital elements along with in-person networking. Digital strategies include things like strong, polished, up-to-date profiles (for individuals and your brand) on relevant industry and social platforms.
Post-event is the time to nurture the seeds sown. This requires patience and confidence — which is where working with proven mentors can maximize the chances for success.
Common Pitfalls and How to Avoid Them
Here are a few mistakes startups make during investor networking:
- Talking too much: This is an immediate red flag for an investor. Share concise, targeted information that always has a purpose in the immediate conversation.
- A failure to demonstrate clear solutions: Define problems and clarify how your startup uniquely solves them.
- Lack of preparation: Having documentation, business plans, and metrics ready always impresses.
- Pushing for commitments: Remember, long-term relationships are more valuable than immediate funding and send the message that you’re a healthy startup with plenty of runway.
Working with the Missouri Innovation Center’s team gives you access to experienced advice that can help you avoid these pitfalls and, instead, make lasting impressions on a growing, robust investor network.
Optimizing Your Investor Network
A startup’s investor network is a lifeline to long-term funding and support. However, building a quality investor network takes time and strategy. This starts with solid preparation and includes thoughtful presentations and consistent follow-up.
Accessing experienced mentorship and coaching can help you craft compelling investor pitches and give you access to high-quality pre-existing investor networks. If your startup is struggling to make connections with the right investors, consider becoming a client at the Missouri Innovation Center. This gives you access to support and insights that can be the differentiating factor standing between your young brand and a strong investor network.
