Pre-Fundraising Insights Every Climate Tech Founder Should Hear

CleanTechies Insights #1

Sep 20, 2023

Pre-fundraising preparations are integral to the success of a fundraise. Fundraising is complicated – founders have to refine their business plans, develop a compelling pitch, and build relationships within the investment community leading up to the raise. After interviewing and speaking with numerous founders over the past two years, we still see many confused about the process and how to best position themselves ahead of starting a fundraise.

In this edition of CleanTechies Insights, we are breaking down some of the best pieces of advice we have seen on this podcast with over 100+ founders and VCs in ClimateTech. This edition’s clips specifically come from our conversations with:

Let’s get into it…

1. Preparation

It may seem simple, but founders should make sure they are prepared before going out to fundraise. Firstly, it is essential to ensure that your business model is meticulously flushed out and ready to execute. VCs are keen on investing in startups with a clear and well-defined plan for growth, so refining your business model is crucial.

Nadav Steinmetz (Nomea) on the importance of proofreading

Heidi Lindvall (Pale Blue Dot) on having a clear business model

Additionally, founders should carefully plan their fundraise strategy, including setting clear objectives, identifying potential investors aligned with their industry, and crafting a compelling pitch. Interviews with VCs on our podcast emphasize the importance of presenting a comprehensive and convincing case to attract potential investors. By diligently preparing your business model and fundraising plan, you'll increase your chances of securing the investment you need to propel your startup to success.

Susan Su (Toba Capital) on how you should plan your fundraise

2. Practice

Practice makes perfect. Fundraising may seem high stakes, but there are ways to prepare for the real conversations. A fundraising basic is to have a proofread deck that communites your points and message effectively. Seek feedback from friends or mentors to eliminate typos and ensure clarity in all written materials. VCs are looking for a reason to say no, and a lack of attention to detail or presentation can, at times, be reason enough.

Tommy Leep (Jetstream VC) on how to get feedback on your pitch

3. A tiered approach

Have a tiered approach when creating your fundraising strategy. Pick your A, B, and C investors, and reach out to the Cs and Bs to get prepared for the As. You will be asked questions and pushed to think about your business in different ways in each pitch. Use those learnings to be the most prepared for your target VC meetings. Still, maintain a consistent and respectful approach to all potential backers. You may learn a VC has a better fit for you than you expect. The tiered approach is more to help you pace out your fundraising and to give you a way to organize your effort.

Susan Su (Toba Capital) on how to tier your investor relations

Think about how to include soft relationship building with later-stage investors. These conversations can educate you on what firms are investing at the next stage. These pieces of advice can also be incorporated into your normal pitches, where you can give potential investors conviction that you would succeed in future fundraising rounds. Thinking about this before the fundraise can help make sure you have some of these conversations planned once the craziness kicks off.

Tommy Leep (Jetstream VC) on why you should build relationships with investors at the next level

4. A (relatively) quick fundraise

Plan a focused and “short” fundraise. The point of raising capital is to build, so the more time you spend fundraising, the less time you spend building. Factor this into your fundraising plan. VC is a FOMO business, so being on the market too long can decrease investors’ interest. Come in to your fundraise with a plan to be done in 3-6 months. Even if it goes longer, it will pay off to have worked on a shorter timeline.

Susan Su (Toba Capital) on how to expedite your fundraise

5. Ending thoughts

The importance of preparation cannot be overstated when it comes to fundraising. With these pieces of advice, we hope to educate the many founders who come to us asking for tips – we need more innovative climate solutions in the world.

These insights were written from our personal experiences talking to hundreds of founders and VCs but have some special clips taken from our episodes.

Check out the rest of the amazing conversations:

If you liked what you read, share it with your friends! Every person counts. ⏩

Thank you so much for reading, and let us know what you think. It has been a longstanding dream of this podcast to put out readable, digestible content that can help get these insights to more people.