After working on 150+ equity raises with clients, it's obvious what fundraising entrepreneurs lack. Context.
The numbers investors deal with
- The average VC will see 5,000+ deals per year.
- From these they will talk with around 700.
- They may only invest in 8 to 10 of them.
- The average angel investor can receive around 30 decks per day.
- They may invest in 1 to 3 deals per year.
The vast majority of this cash circulates the same networks. Up to 80% of VC deals come from partners or direct sources, and angels will be similar.
Your real chances of raising
In 2021 there were 771,617 companies formed in the UK and 4,108 seed stage fundraisings. Your chance of starting a company and raising capital (VC or angel) is around 0.5%.
- There is a multi-billion funding gap in the UK alone.
- Globally, 2% of VC capital went to female founders.
- In the UK, 1.4% of VC capital went to ethnic minority founders.
Yet alumni of a single top business school raised almost $4bn of funding for their companies in 2021. That is more than Switzerland ($3bn) and Portugal ($600m) combined.
Own your process
I need founders to realise that funding is a game and it's rigged against you. Funding is now a numbers game in which you have to be resourceful, accurate, concise and perfectly prepared.
Brokers do not work. You can't just hit and hope; the quality is too high. Pretty much every deal you see now is high quality. You have to own your process as a business function. This is absolutely critical.