Founder Hour: Fundraising 101 with Morgan Johnson

Intro frame for Morgan Johnson's Fundraising 101 Founder Hour

On this month’s Founder Hour, we were honored to host a session with Morgan Johnson, an Executive Coach with 20+ years of investment experience and founder of Nucleus Adventure Capital. Morgan specializes in supporting growth-stage founders and executives in transition, while also mentoring and coaching early-stage founders in developing narratives, fundraising decks, pitches, and negotiation skills. In the full webinar found here, we discuss his approach to fundraising and answer questions about everything from company positioning to founder storytelling. Check out our key takeaways below!

What investors DO and DO NOT want to see in a pitch deck when presented with an investing opportunity: 

    • DO:
      • Slide Limit: Keep the deck to 10-12 slides, ensuring a concise and impactful presentation.
      • Core Message: Distill the founder’s core message into a brief and compelling document.
      • Problem/Solution Identification: Clearly explain the problem you have identified in the market and how your product or service addresses a need.
      • Competitor Analysis: Address competitors’ strengths and emphasize your differentiation, highlighting how your product or service caters to a specific niche.
      • Target Customer: Provide a clear illustration of how you will reach your core customers, including your communication strategy and conversion tactics.
      • Unit Economics: Depict the cost and selling price of your product or service, and if applicable, showcase any existing revenue generation.
      • Illustrate Comprehensively: Ensure the presentation is cohesive and comprehensive, covering the essential aspects of your business in a concise manner.
  • DO NOT: 
    • Convoluted Message: Ensure a clear and concise articulation of the problem your business is addressing and how your product or service provides a solution.
    • Founder’s Effort: Avoid vague explanations that require investors to discern whether or not the idea is feasible. 
    • Avoid Celebrity Investor or Partnership Signals: Be cautious about using celebrity investors or potential big partnerships in late-stage negotiations as a signaling tactic. Investors may view this as a red flag, as it often carries little weight and can be seen as an attempt to create association rather than demonstrating genuine value.

 

Tips for mastering the art of pitching: 

Delivering an effective pitch requires the skillful blend of storytelling while painting a compelling future vision for your company. Your pitch should serve as a captivating “ticket to the future,” inviting investors to join you on a transformative journey where you will build a valuable solution to a relevant problem. It is crucial to convey your enthusiasm and conviction while describing your unique approach to solving the problem and emphasize why YOU and YOUR TEAM are the ideal candidates. Demonstrating a deep understanding of the potential of your venture, as well as outlining a clear strategy for initial market entry, will further solidify your pitch. Additionally, being well-prepared to respond to investor questions and pushback showcases your ability to think critically and adapt. Effective communication of versatility and confidence is key when addressing challenging inquiries, allowing you to navigate potential obstacles with finesse.

Key items to include in a five-minute pitch:

  • Problem identification: Clearly articulate the problem you have identified in the market and why it matters.
  • Identification process: Explain the research, market analysis, and customer feedback that led to the identification of the problem.
  • Solution strategy: Outline your proposed solution and how it addresses the identified problem effectively.
  • Team alignment: Highlight the expertise, experience, and passion of your team that make you the right fit to solve the problem.
  • Differentiation and market niche: Clearly define how your product or service stands out in the existing marketplace, emphasizing your unique value proposition and target niche.
  • Customer acquisition and marketing channels: Explain your customer acquisition strategy and the marketing channels you will utilize to reach your target audience effectively.
  • Focus and attention: Explain your planned approach and discuss where your attention will be directed in the initial years, showcasing discipline and a clear path forward.

How to answer the “traction question” as a pre-revenue or pre-launch business:

Because there is limited financial data to pull from as pre-revenue or pre-launch business, it is essential to demonstrate a proactive approach to gathering customer feedback and other market research to validate your claims. Creating interactive experiences or events for potential customers to engage with your product/service and provide valuable insights showcases your active pursuit of customer input and addressing their needs. Additionally, conducting surveys and engaging in customer outreach further highlights your commitment to market understanding. These efforts demonstrate resourcefulness, initiative, and adaptability, which are highly valued by investors in the early stages of a business, even in the absence of sales data. 

Advice on connecting with early stage investors:

Simply put by Morgan, successfully connecting with investors is a “game of collisions.” The more people you engage with by attending both virtual and in-person events, the more relationships you will form and be able to foster within the community. As a founder, you are ALWAYS selling something, whether it is your idea, your company, your product, or your brand. By actively putting yourself out there and discussing your work amongst colleagues, ex-colleagues, family members, friends, acquaintances, etc., you not only refine your pitching skills and gain confidence, but also increase your chances of making valuable connections. If you feel that you want to reach a broader network, consider allocating a budget for traveling to funding hotspots and networking events, as this investment can provide valuable opportunities for growth and visibility.

Thank you to those who tuned in this past Monday! If you are a founder, make sure to keep an eye out for next July’s speaker. We are excited to continue to deliver valuable conversations to help support all of our wonderful founders along their fundraising journey! Not already subscribed to our Founder Ecosystem? Subscribe here! 

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