Techstars is clearly one of the most challenging, and at the same time most rewarding experiences we have ever had. It completely changed the way we look at start-ups, business models and growth. Our entire business plan and product changed in just three months — it made our start-up better, a lot better.
The support we are getting from the whole Techstars network is not only changing our start-up, but our whole lives. Through Techstars, we have access to the most successful entrepreneurs worldwide, like Dennis Crowley, who Co-Founded Foursquare; David Karp, who is CEO of tumblr; or Fred Wilson of Union Square Ventures.
One of our goals for Techstars was clearly raising funds after the programme. We raised successfully an angel round in the UK, and were honoured that the amazing Doug Scott of Potential.VC was our lead investor. I can tell you that raising funds in the UK and in the US are two completely different worlds. In the US raising funds is an art. It is a game, which you need to play, but you have to understand the rules first.
Techstars is world-class in teaching founders the game and art of fundraising. One whole month is dedicated to it, in which we not only have mock-investor meetings, they also teach us how to be smarter fundraisers, what a good and a bad deal is (and how to spot it in a few seconds), what a usual process looks like, and when to say no, even just to meet an investor. At the end of the programme, we also have the opportunity to meet investors (VCs and Business Angels) from the US east and west coasts. This creates huge momentum for the deal and great exposure for MindMate.
Meeting Investors is a lot like dating in high-school. You have to act cool, in no way should you make the impression that you really need that money. To make the best impression on the investors, you need to be prepared. Before your meet investors, go on their AngelList profile, their LinkedIn, and their website. Get to know the investors and the fund. You can easily see, if your start-up is aligned with their investment philosophy, and their prior investments, and if you should bother talking to them. For example, if somebody never invested into mobile, and you have an app, it is very unlikely that they will invest.
A lot of investor questions are repetitive in the first meetings: market Arellanosize, business model, high-profile data analytics, team, story. But, some investors have a different mind-set, different questions, different standpoints. If you fumble, it is important that you stay honest! Don’t bull**** about numbers, projections or anything else. If you don’t know something, stay calm, admit that you don’t know, and get back to them with the answer to a later point.
Keep in mind that Investors are also humans, and if they back-off because of this, they would not have been the right investors for your business anyway. Overall, Techstars made the MindMate team to better fundraisers. Our key learning was a change in mind-set: We, the entrepreneurs, give investors the opportunity to invest in our business early; we will raise, no matter what.
You will always hear more ‘no’ than ‘yes’. It is important that you move on quickly, because at the end of the day, investors also just want to get good deals, and bet on the right horse. Eventually, you will find the right investor for your business, it is all about patience and persistence.
Susanne Mitschke is chief executive of MindMate.