EP #371 - Pascal Koenig & Sophie Lamparter: A Fundraising Masterclass in 40 Minutes

Swisspreneur Show

Timestamps:

3:53 - How to know if you’re ‘investable’

6:49 - Getting in touch with investors

8:08 - How much equity to give away

13:48 - Equity round or convertible loan?

37:16 - Celebrating a closed round

About Pascal Koenig & Sophie Lamparter:

Sophie Lamparter is the co-founder of DART Labs, an international fund investing in early stage Swiss climate and health tech startups to accelerate them on the US market. She holds a degree in Communication and Media Studies from ZHAW.

Pascal Koenig is the co-founder, former CEO and current board member at AVA women, a startup manufacturing wearable fertility trackers for women. He studied business in St Gallen and New York and worked at McKinsey for a few years before being invited by one of his university professors to join a startup project — Cardiosave.

Pascal and Sophie have created a fundraising masterclass which is available for free at https://swisspreneur.org/fundraising. During this live session, they summarized the masterclass into a few key takeaways, some of which are jotted down in these shownotes as well.

How do you know if VC money is right for you?

Sophie and Pascal think that if you can afford to go bootstrapped, you should do it. If you only need to raise a small sum of money, go for angel investors. If you want to raise larger amounts, it would make sense to reach out to VC investors, but you should take into consideration that a VC fund’s goal is to have one of their investments return the value of the entire fund. So if you pitch to a CHF 100M fund, know that their goal is to invest in a startup that will return them 100M. Is that the kind of startup that you are willing to build and capable of building?

How do I make my startup more “investable”?

First of all, you need to strengthen the team. If your startup has little to no traction but a great idea, then what funds evaluate is the team’s potential. Secondly, you should attempt to build some traction through things like marketing campaigns, and if you haven’t validated your product/service yet, you should at least validate the tech it’s based on.

How much equity should I give away in my first round?

No more than 25%. Remember, if things go well, you’ll be doing plenty of rounds.

How do I come up with my startup’s valuation?/ How much money should I ask for?

Know that if you ask for CHF 1M, that presupposes your company valuation is CHF 4M. So if you go in asking for CHF 5M and investors don’t think your company is worth CHF 20M, you’re not getting any money.

Should I go for an equity round or a convertible loan?

Convertible loans have the advantage of being fast: you can deploy the money the following day. Pascal and Sophie recommend that if your company is still early stage and/or if you’re raising a small sum, you should go for a convertible loan. For bigger rounds/late stage, go for equity.

What makes a great pitch deck?

Simplicity. It should be crystal clear even for people who don’t work with you/in your industry.

Why do I need to build a long list of 100 investors? Shouldn’t I be selective?

Selectivity happens further down the line. If you just talk to 5 investors, even if they respond enthusiastically, that doesn’t at all mean that they'll invest.

Pascal recommends that you reach out to 100 investors (given that they all invest in your industry/stage), because out of those 100, 50 will do a call. Out of the 50, 20 will go into due diligence. And then once you get your first term sheet from one of them, other term sheets start showing up — that’s the time to be selective!