Building on the success of its recent round of financing, Montreal start-up Mobeewave is pursuing its goal: to make payment acceptance accessible to all entrepreneurs. The co-founders, Benjamin du Haÿs and Maxime de Nanclas, share their best advice for attracting and convincing investors.
1- Do not wait until you need money to start the process
“Get out of your office and tell your story. You must first develop a relationship with the potential investor,” suggests Maxime de Nanclas. Don’t wait until you need financing to knock on investors’ doors. The latter are much more interested in the potential of a person and that of the team, than in the idea of the project.
Same story on the side of Benjamin du Haÿs. “The secret often lies in human contact. It is not when you have an urgent need for an injection of liquidity that you should establish a first contact with investors,” he says.
A good practice could be, for example, to meet as many as possible before the planned fundraising. “Introduce yourself, talk about your activities and go back to see them a few months later to explain how far you’ve come,” say the two entrepreneurs behind the National Bank’s Easy Payment application.
2- Put yourself in the shoes of the potential investor
If a venture capital fund receives 100 applications a day – there are many new companies seeking financing – assume that your application must stand out. The investor waits for the right opportunity to use his checkbook. He seeks to understand the potential of your proposal. It attempts to identify the best time to invest in your start-up.
And, as the name suggests, venture capital is… risky, but still has the potential for high gains. “The investor is there to make money too,” says Maxime de Nanclas. Therefore, the feedback from this potential partner is often worth its weight in gold. “Use it to refine your plan. »
3- Be persistent and prevent blows
“Google was initially refused nearly 150 times by potential investors,” says Benjamin du Haÿs. Moral of the story ? “Be persistent. Go see a hundred other suitors, if necessary. Find the one who will place his trust in you, the others will follow later,” he advises.
Before going to consult a first venture capitalist, Mobeewave was lucky enough to be able to count on a few financial angels. An avenue that you could obviously consider. “Being accompanied in your efforts by a person who has mastered venture capital is also an undeniable advantage,” he adds.
4- Disregard your current valuation
It can sometimes be difficult to give up part of your share capital in exchange for the expected financing. After all, a venture capital firm invests to obtain an equity stake in the business. Some entrepreneurs thus tend to look for the biggest possible home run: they are looking for the most generous financial valuation possible. “Perhaps it is better to let go of a greater share of equity and become the next Google than to retain 99% of the titles and not become the hoped-for technological icon”, admits Maxime de Nanclas.
Therefore, keep your focus on the potential of your activities and not on the expected valuation in the short term. In any case, and beyond the financial aspect, venture capital firms can help you benefit from their advice, their networks and their experience.
5- Do not underestimate your financing needs
You need $500,000? “Raise $1 million instead,” exclaim the two co-founders of Mobeewave. Both amounts require the same amount of effort to achieve. A business plan is sometimes too rigid. The deadlines indicated sometimes require additional efforts to be respected. These are situations that require holding more cash than expected.
In addition, it may take some time before you have access to the funds in your business bank account. Arm yourself with patience: a financing round can last 6, 9 or 12 months.
Failing to have correctly estimated the amount required, and in the event that you have to redo a round, some investors could be more cautious if the development of your activities proves to be more difficult than expected. A well-informed entrepreneur is worth two!
