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Entrepreneurs: how to present yourselves to convince investors

As part of a cycle of Partech Shaker & Learn Talks on communications, in this first session, Benjamin Grange, COO of Dentsu Aegis Network and CEO of Dentsu Consulting focused on how to enhance a start-up’s attractivity in preparation for a fundraise. He and Antoine Cardoso, co-founder and CEO of WeMoms (the mom’s advice app mentored by Dentsu Consulting) shared their insight and experience.



Dentsu Aegis Network is the 4th largest global communications company with over 48,000 employees active worldwide. Last year, Dentsu Consulting launched “Startup lift” a coaching offer that provides communications support to startups during the fundraising phase (A & B series). “The idea is to boost the startup’s valuation and desirability at this key moment: storytelling, positioning, value propositionexplained Benjamin Grange. French entrepreneurs don’t always put on their best show when they are approaching the fundraising stage: often during the investor pitch, many form or content pitfalls become apparent, with potential negative impact. We want you to knock on investors doors when you have maximized your assets and are at your most desirable. There are keys to this which we will explain to you today. We recently supported Antoine Cardoso, co-founder and CEO of WeMoms for the 6 months prior to his recent fundraising”.

WeMoms is the first app to enable advice-sharing between moms (the young moms’ Facebook). Since its launch in 2015, the company has raised 3 million euros and is about to launch a third round of fundraising. “Just like a lot of other startups, I had a negative image of the press – I thought that it was time consuming”recalls Antoine Cardoso. However, everybody reads newspapers, watches the news on TV, listens to the radio… As an entrepreneur, having a good product or service is not enough, you need to sell it well. And this won’t happen unless consumers are aware that your product exists. In addition to mothers who hardly read the press, we wanted to reach advertisers and investors. You need to develop your brand awareness to attract good recruits, develop your business and raise funds. Benjamin Grange from Dentsu really changed my negative view of the press. He helped me with public speaking and dealing with the media. *The results were amazing: over 7 months we had 150 press mentions, including with major media such as Le Monde, Les Echos, Challenge, BFM, Europe 1…This global press momentum contributed to our fundraising success.”


Media: a key ingredient for project emergence 
Benjamin Grange: Having the best products and project is not sufficient to make you emerge: you need to build your media presence, as this will:
  • boost your notoriety: remember that around 100 press hits are equivalent to 150 million euros spending
  • give you a “stamp of approval”: figures of authority will bring true credibility to your project and they will promote your company.
Media coverage will reinforce the bond and the interest of your projects ahead of fund raising. We believe that it can increase pre-fundraising value by 10 %! Being well-prepared and building an ad-hoc communications campaign ahead of the fund raising phase increases the probability that your project will stand out to investors amongst the other equally quality projects.

 
What investors really look at
Benjamin Grange: You as an entrepreneur may be worried about your valuation or profitability when meeting a fund, but when meeting you, funds have other concerns. They often find that entrepreneurs have too technical a vision of their projects, focusing on the 6 months post-fundraising, while investors are interested in long-term vision and your project’s potential. Don’t under-estimate the following:
  • you need to provide investors with a global vision and a clear description of your purpose and your market (are you creating a market, are you entering an existing market?) Provide figures on consumers, markets, usage data…
  • what is your ambition, your positioning and your motivation? If you are looking to raise 1 million euros, you need to project further than short-term challenges such as entering a new market.
Your purpose, vision, positioning, ambition and markets are the key elements that you shouldn’t under-estimate.
 

Perfecting your pitch -  form counts too!  
Benjamin Grange: Storytelling, posture, a closely-knit team … all these elements are key to capturing investor attention, especially during the first 5 to 10 minutes. This is why Dentsu works with you on your posture, message clarity, storytelling… ingredients that can bring an emotional dimension to your project, in addition to the material aspects. Investors appreciate these elements of form and you often underwork them. At Dentsu, we try to re-balance these components so that you are at your peak when meeting with investors.

We work at providing you with a stamp of approval so that investors have already heard about you by the time they meet you. Trust comes from concrete evidence: commercial contacts, prototypes, institutional intentions…all these will give credit to your projects and we at Dentsu try to valorize and create this body of evidence. Similar to training for a race, we work with startups for 4 to 6 months so that they are fully prepared when meeting with investors.


Antoine, do you remember your first meeting with us?
Antoine Cardoso: We had to do a blank pitch in real conditions, which was filmed. Benjamin and his team put us in a very stressful situation and did nothing at all to put us at ease. It was very unpleasant. Benjamin pinpointed all the negative aspects of our blank pitch and this was used as a base during our training to improve both form and content.

Benjamin Grange: We always use this filmed blank pitch method as a reference for improvement.  We tend to apply a lot of pressure during this exercise because real pitching is very stressful. We ask our “trainees” to pitch in front of other people, from different sectors with different views. Our aim is to increase the perception of attractiveness of your project using different means: connection with our network, valorization in the media, improved positioning: anything that will enhance the attractivity of your project.

Antoine Cardoso: What is difficult when pitching is the lack of constructive feedback afterwards. I strongly recommend asking investors what they really think about your pitch. You will save a lot of time and this is what we received from Benjamin Grange and his team.

Benjamin Grange: Our goal is to build a relationship of trust with you, so that you can successfully raise money. We charge success fees, so your objective is also our objective.


Antoine, you are about to close your series-A: can you give us 3 tips before a fundraising? 
Antoine Cardoso: 
  1. be well prepared: don’t start too early or too late. You need to be ready on metrics, traction, teams, vision so that you are able to fully defend these fundamentals.
  2. be as quick as possible: fix a deadline and communicate a feeling of urgency to your investors during the investors round. It is better to stop a fundraising round which is not working than to continue and spend cash needlessly.
  3. choose the right investors: make sure they are ready to follow you right away.

Benjamin Grange: It’s true, there is a kind of herding effect amongst some investors: the first one to accept will convince the others, so it is key to have the first investor make his decision as fast as possible! Part of the investor decision is based on rational elements; another part is emotional. So, you should try to play on this emotional side. Investors will dive in if they believe in your project. You need to be inhabited by your project. An entrepreneur's belief in his own project makes all the difference because it is a vector of emotion.

 
Q & A 
Benjamin, what motivates your decision to support an entrepreneur?
We look at two criteria:
  • the entrepreneur’s capacity to reach the end of the process because we also take a risk with him. We charge a small fee at the beginning of the mission to cover our costs and then a success fee;
  • our capacity to help them and to be sure that there is a fit between us.

Benjamin, do you also cover slide show redaction and contact settings with investors?
We write the deck with a corporate bank or a fundraiser intermediary if there is one. But we don’t put you in contact with investors for a very simple reason: we are also senior adviser in investment funds. We can’t be judge and jury.


Antoine, what would you do differently if you had to raise funds again?
What is important is to spend as little money as possible, so you can do as much as possible, without depending on investors. We tend to think that we necessarily need investors and we raise money to go faster. You can do a lot when you raise money but remember that raising money is a very stressful full-time job. You should strive to have the lowest costs and the highest revenues in order to keep investors away so that fundraising is not a survival technique but an acceleration criterion.

Try to be profitable and forget about vanity. Think about what really adds value to your business and don’t recruit an additional person just to impress others. Again, spend as little as possible to have enough cash so you do not depend on investors.

Benjamin: I would like to add that in France, 80 % of series-A happen based on a proven value proposition. If you don’t have proof such as a prototype, a track record or evidence that your value proposition can be developed rapidly to the next level, you won’t be successful. While this is still possible in the UK or the US, it’s not in France. You should have all the proof elements to sustain your value proposition from the seed to the series-A stage.

Antoine, how did you fund your first 3 years?
We raised 3 million euros from 30 business angels and we are now starting our first round with venture capital funds.  80,000 euros were invested by friends and family. Trying to raise funds from friends and family or the BPI takes time, but it allows you to generate initial traction which will help you to raise further funds.

Antoine, what advice do you have on convincing friends and family (love money)?
You should tell them that it is like betting at the casino: statistically you are going to lose your money, but there is a slim chance that you may make some. You should explain to them that you truly believe in your project.

Benjamin: I don’t like the Casino idea, I prefer the lottery concept: with a lottery, there is always a winning ticket!

What is your view on the BPI?
Benjamin: The BPI is a caution for banks but not for a business angel as the BPI invests everywhere.

Antoine, how did you first get in contact with Business angels?
More or less by chance. But when someone trusts you and lends you some money, ask him to introduce you to his friends. There are a lot of opportunities and venues to meet business angels and many events are organized to put investors and entrepreneurs in contact, so you should get out there and network.

 


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