There’s so much riding on a pitch, so you want to get it just right. Liz Giorgi, founder of Soona, seems to have got it down; she landed $10.2 million in Series A funding for her innovative e-commerce creative studio. Giorgi was kind enough to share her pitch deck tips and hard-won insight with our community on Instagram, so they can get their businesses funded and find the partners their brands really need.
Q: How did you decide what kind of funding to pursue?
A: I had previously bootstrapped a company and had an amazing relationship with a business banker. After talking to them about my vision and the tech I wanted to build, it became clear that traditional debt financing was not going to be an option. I decided to apply to Techstars to get a crash course in how to pursue venture financing and it was a truly awesome and illuminating experience.
Q: What were your top three takeaways from Techstars about venture financing?
A: First, you must have your deck, financial model and all basic legal documents ready to go before you start a raise. Second, direct introductions are best, so getting a person in your network (ideally a founder that an investor already backed) to introduce you has the highest likelihood of getting you a meeting. And lastly, knowing your numbers backwards and forwards will really help you stand out. Specifically, your margin, customer acquisition costs and unit economics [the ratio between what it costs to acquire a customer and their lifetime value to your business].
Q: What was the most important element of your pitch? How did you communicate your vision?
A: First, I wanted to really outline the opportunity in the e-commerce category. I said, ‘There isn’t a single e-commerce transaction that happens without an image. And two-thirds of that purchase decision comes down to the image. Why hasn’t anyone solved this at scale?’
The second most important element was traction. Nothing gets investors excited like customers! Telling their stories and why they use and love Soona was key.
Q: How do you find the right people to invest in your company?
A: There are many great platforms for connecting with investors. I recommend checking out FundBoard, which lists investors taking intros and the types of businesses they invest in.
You can also look at Crunchbase to see a fund’s past deals. See if they have invested in your industry before–that’s a positive sign!
Q: How did you determine your raise amount and valuation for your funding rounds and feel confident about it? Also, did you set a close date for the raise to give a timeline or build excitement from other investors?
A: The size of your raise really should be built by working backwards from your financial model and your plans for your business. In my model, I built out what I could accomplish in terms of product, traction and revenue with $10 million and $12 million. This shaped both the size of my ask and the valuation that made sense relative to that raise amount.
It’s hard to put an expiration date on a round until you have a term sheet in hand. So instead, I aimed to get a term sheet five weeks from formally starting my raise. In actuality, it took a little more than four weeks. The term sheet is what creates FOMO (fear of missing out) for other investors. You can shop a term sheet to other interested parties to either raise more or increase your valuation. However, it’s a bit of a gamble. Once I had the term sheet signed, it was another six weeks of due diligence.