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access to capital

Published on
4 mins read

5 Things Investors Look for Most in a Pitch

Pitching your startup to investors is a pivotal moment in the journey of any entrepreneur. It’s your opportunity to convey your vision, demonstrate your potential, and secure the financial backing you need to turn your dream into reality.

But to succeed, you must understand what investors are really looking for in a pitch. In this article, we’ll break down the five most critical elements investors pay attention to when evaluating startup pitches, supported by data and facts.

1. Compelling Problem-Solution Fit

Investors are acutely interested in the problem your startup addresses and the solution it provides. To capture their attention, your pitch should clearly define the pain point you’re targeting. According to research by CB Insights, 42% of startups fail due to a lack of market need. This underscores the importance of demonstrating a compelling problem-solution fit.

Actionable Tip: Back your claims with data and customer testimonials showcasing the demand for your solution. Highlight how your product or service is unique and more effective than existing alternatives.

2. Market Opportunity

Investors want to know that your startup operates within a sizable and growing market. They’re looking for a substantial addressable market that can support rapid growth. A study by Statista revealed that the global tech startup ecosystem was valued at over $3 trillion in 2020, emphasizing the vast opportunities available to innovative companies.

Actionable Tip: Utilize market research to validate the market size, trends, and your potential share of it. Investors want to see that you’ve thoroughly analyzed your market and understand where your startup fits in.

3. Strong Business Model

Your pitch must present a clear and sustainable business model. Investors are keen to know how your startup plans to generate revenue and eventually become profitable. According to Crunchbase, 29% of startups fail because they run out of cash, emphasizing the importance of a robust business model.

Actionable Tip: Provide detailed financial projections and explain your path to profitability. Highlight your monetization strategy, pricing model, and customer acquisition plan.

4. Traction and Milestones

Investors seek evidence that your startup is gaining traction and achieving milestones. Metrics such as user acquisition, revenue growth, and partnerships are essential indicators of progress. According to PitchBook, startups that secure funding typically have a median of two years of operation and have raised around $1.3 million before their initial funding round.

Actionable Tip: Showcase your key performance indicators (KPIs) and growth trajectory. Highlight any noteworthy achievements or partnerships that demonstrate your startup’s potential for success.

5. Strong Team

Investors often say they invest in people, not just ideas. Your team’s expertise, experience, and commitment are critical factors in the investment decision. A Harvard Business Review study found that startups founded by teams with complementary skills are more likely to succeed.

Actionable Tip: Introduce your team and emphasize their relevant expertise. Highlight their past accomplishments and how they are uniquely positioned to execute your startup’s vision.

SBLK Ventures is committed to connecting Black-led startups with our network of investors. If you are a startup that is raising capital, we invite you to fill out this form to be considered.

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Published on
8 mins read

How to Grow Your Business With Community Crowdfunding

community crowdfunding

Community crowdfunding is a form of crowdfunding that includes equity crowdfunding and debt crowdfunding as its subcategories. For entrepreneurs who face difficulty in securing funding from traditional sources such as angel investors, venture capitalists, and banks, these alternative crowdfunding methods can be a viable option.

Equity and debt crowdfunding allows entrepreneurs to raise capital from a diverse group of investors who contribute small amounts of money in exchange for equity or debt in the company. This type of funding can be facilitated through online platforms, and the amount of capital that can be raised depends on the offering and the platform used.

To successfully utilize equity or debt crowdfunding, it’s crucial to have a solid understanding of the fundamentals of community crowdfunding. This includes the types of investors that participate and the potential amount of capital that can be raised. 

In this article, we will explore how to grow your business with equity crowdfunding.

Understand the basics of Community crowdfunding

Prior to pursuing funding through community crowdfunding, it is essential to understand its fundamentals. Equity crowdfunding enables businesses to raise capital through online platforms by offering shares of the company to investors or allowing investors to lend capital to a founder in the form of debt. These investors may be individuals, organizations, or groups. Depending on the platform and the type of offering, the amount of capital a business can raise through equity crowdfunding can vary.

Regulation Crowdfunding (Reg CF) and Regulation A+ are types of equity crowdfunding. Reg CF permits businesses to raise up to $5 million, whereas Reg A+ permits businesses to raise up to $75 million. Unlike donation crowdfunding, Reg CF and Reg A+ require greater regulatory compliance and are governed by the SEC and FINRA for protection and transparency.

Choose the right equity crowdfunding platform

There are a variety of equity crowdfunding platforms available, and it is essential to select the most suitable one for your business. Each platform has its own rules, regulations, and fees; therefore, it is essential to investigate each platform to determine which is the best fit for your business.

Each platform has its own strengths and weaknesses, and it is important to consider the platform’s fees, investor network, track record, and other benefits. Seed At The Table, for instance, provides a diverse founder focus as well as advisor and resource matching.

Create a compelling pitch

A successful equity crowdfunding campaign requires a compelling pitch that clearly communicates the value proposition of your business as well as the benefits of the partnership to potential investors. Your pitch should highlight your business’s unique selling points, market opportunity, and growth potential. It should also address any potential risks or challenges associated with your business.

Your pitch should be visually appealing and include multimedia elements such as images and videos to engage potential investors. It is also important to include a clear call to action that directs potential investors to your crowdfunding page. The goal is to allow both your investors and customers to be advocates of your business.

Set realistic funding goals

A successful equity crowdfunding campaign requires setting attainable funding goals. Your funding goal should be based on the financial needs and growth plans of your business. It is essential to set a funding goal that is neither too low nor too high, as this can deter potential investors. According to research, the average raise is $200k.

Setting a realistic funding goal also helps to create momentum for your campaign. If you achieve your funding goal early in the campaign, this can generate excitement and encourage more investors to contribute. Also, only 150 Black women have ever raised more than $1 million in any capacity, so it’s important to keep your expectations realistic. Two of the 150 have been launched by Seed At the Table.

Build a strong investor community

Building a strong investor community early (even before launching) is key to the success of your equity crowdfunding campaign. Your community should include early adopters, supporters, and evangelists who are passionate about your business and can help spread the word about your campaign.

It is important to engage with your investor community regularly through social media, email newsletters, and other communication channels. This helps to create a sense of belonging and fosters loyalty among your investors. You can now legally “test the waters” which means assessing your communities intentions to invest in private before fully launching publicly.

Deliver on your promises

Equity crowdfunding is not just about raising capital; it is also about building a community of supporters who believe in your business. It is important to deliver on your promises and provide regular updates to your investors. It’s also important to be transparent about your business’s progress and any challenges you face along the way. This is not only encouraged, but required by FINRA/SEC. Delivering on your promises also helps to build trust and credibility and create a positive reputation for your business, which can attract more investors in the future. 

Leverage the power of equity crowdfunding beyond funding

Equity crowdfunding can provide more than just funding for your business. It can also provide valuable marketing and exposure opportunities. A successful equity crowdfunding campaign can generate media coverage, attract new customers, and create buzz around your business. It’s an opportunity to allow your community and customers to participate in your growth journey while continuing to consume and advocate your product as fans, customers, and investors.

By leveraging the power of equity crowdfunding beyond funding, you can create a virtuous cycle of growth and success for your business. For example, you can use the funds raised through equity crowdfunding to launch new products, expand into new markets, or invest in marketing and advertising campaigns.

Click here to be considered for investment in Seed at the Table and support socially responsible businesses!

Businesses:

Ready to fund your business growth and get connected with resources? Sign up on Seed at the Table to connect with potential investors who share your values and other viable resources to grow your business.

Email Support@SeedAtTheTable.com to sign up.

Follow Seed At The Table on social media:

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Published on
12 mins read

Seed At The Table: A Vision for a More Inclusive Crowdfunding Future

seed at the table

Seed At The Table is shaking up the traditional crowdfunding industry by creating a platform that prioritizes diversity and inclusivity.

With a mission to connect diverse entrepreneurs with investors, Seed At The Table offers a unique equity and debt crowdfunding model that stands apart from the rest.

In this interview, Founder and Head of Growth, Pierre Le Veaux shares the inspiration behind the creation of Seed At The Table, the platform’s crowdfunding model, the process for entrepreneurs to launch a campaign, and the company’s vision for the future of the industry.

What inspired you to create Seed At The Table?

Since I first stepped foot on a wall street investment banking trading floor I knew that “access” to information, people, and wealth/capital was one of the biggest predictors/drivers for success. Over my 10 year plus banking career I noticed that everyone on the floor had “access” whether born with it or earned, and it allowed them to experience life differently than the rest of the world.

With that same frame of thought, I saw how access directly impacted business and financial success, especially with respect to obtaining and preserving wealth. Those who grew up wealthy and/or with access were often afforded more opportunities to grow wealth and preserve it. In those same rooms, there weren’t many folks of color and definitely even fewer from lower socioeconomic backgrounds.

I wanted to create an environment where common folks like my parents and relatives had access to the same information, capital, ideas, etc. as me and my investment banking colleagues. Seed is the platform that allows for exactly that, it’s a financial ecosystem that allows entrepreneurs, investors, and service providers to interact and exchange resources mostly financial in nature. 

Can you describe the crowdfunding model you offer, and how it differs from other crowdfunding platforms?

Unlike other equity crowdfunding portals we do more than just help founders raise debt or equity capital from their networks. We’re also mission driven and have a passionate view on resource matching! From a mission perspective, we are highly understanding that every user that comes to our portal may have challenges that are “unique” and often require a different sense of patience, especially among marginalized communities.

Our focus is to ensure diverse founders have a place to transact and that investors from all walks of life have an opportunity to support marginalized founders while also gaining access to best-of-breed ideas and resources. We are truly a family sitting around a dinner table exchanging ideas and opportunities.

To that point, another differentiating factor is our concept of “family” in which we match seasoned business executives and proven entrepreneurs with companies on our platform who can benefit from official or unofficial advisory services. We do the same for users of our platform connecting them with resource providers and educational content that can be helpful to them. We’re more than a place for crowdfunding transactions.

How do you determine which campaigns to feature on the platform? 

We are industry and growth stage agnostic meaning any size company or industry can apply. We have a preference for DTC companies or companies with high user engagement because research shows that your community and/or customer network is often your most viable investor base; however, we are open to all industries and sectors inclusive of DTC, B2B, CPG, Tech, Real Estate, etc. 

Can you walk us through the process for entrepreneurs to launch a campaign on your platform? In what ways do you assist with this process?

The first step for every company visiting our ecosystem is to complete our Preliminary survey to give us insight into the viability of the business and other matching services. Regardless of whether the company is raising capital or is in need of an additional resource this is a required step that allows for our high-touch approach. 

Companies raising capital are often referred to as issuers, and the next step for them is a call with our onboarding specialist to discuss their business and for them to gain an understanding of the operational process of onboarding (required documents, background check, due diligence, Form C).

Once approved by the Seed board, the issuer creates a campaign page inclusive of their fundraising goals and minimum investment amount to be reviewed by the Head of Marketing. 

The campaign enters the “Testing the Waters” phase- a campaign link is created for the investor to send to a private network to gauge the success of the campaign. Investors are able to review the company profile & financials and “pledge” to invest once the campaign is live.

If the “Testing the Waters” profile aggregates 10% of the campaign minimum, the issuer moves to complete the filing process.

Once the Form C is completed and reviewed by a securities attorney the campaign is submitted to the SEC for approval and the campaign officially launches on the Seed site.

For all companies whether raising capital or not, we assist by matching to mentors/advisors, resource providers like AWS or Google, law firms for formation docs, marketing resources like our partner Power Digital, accounting resources, etc.

Some firms may not be a fit for community crowdfunding and realize they need a bank loan from a firm like JP Morgan or they may be VC-ready either way given our network and family we can facilitate intros accordingly.

We are legally a platform that allows investors both accredited and non-accredited to invest at lower dollar amounts but we really are a one-stop ecosystem serving all finance-related needs. Our network is robust and unmatched!

Can you share success stories from campaigns that have been funded through your platform?

A few stories of campaigns funded through our platform are Wear Oya and Row House Publishing. Wear Oya, a patent-approved fem-tech company, raised over $1 million and was selected by TechStars. The founder is one of only around 150 Black women to ever raise over $1 million.

Row House Publishing, an innovative publishing company amplifying often unheard diverse voices, also raised close to $1 million through our portal. The founder raised a total of over $1 million, joining the same exclusive group of only 150 Black women who have achieved this milestone. These success stories demonstrate the dire need for more funding sources for underrepresented founders.

We’ve also helped a meal prep company called Macrobites raise capital to enhance their operations. The founders are prison impacted and have a passion for their community and health! 

You are also raising capital. How do you plan to use this capital raised for your own operations?

Pour more into marketing so we can find incredible founders and those in need of our kind of services. We have a compelling and revenue generating story given our mission and services that we want to continue sharing as well as the sharing of the stories of companies raising through us. We also want to invest in technology to improve the matching process for all of our users as well as make sure we continue to create amazing educational content.

What advice would you give to entrepreneurs considering using your platform to raise capital?

Think about your network and/or customer base if applicable, or even better how you would go about creating a network. You have followers, a fan base, etc. so think about how you would engage on day one. This is an action we recommend immediately no matter the success or growth stage of a firm. 

What is your vision for the future of the crowdfunding industry and how does your company fit into that vision?

I hope that the industry will be the preferred source of capital outpacing traditional banks that have and continue to underserve their customers hence, the concept of being under-banked. There are so many amazing businesses out there that may not own their office space or have tons of collateral to fit the bank’s archaic risk metrics but are still revenue-generating and are good stewards of capital for a debt or equity transaction.

We also want to be the jumping point for emerging diverse founder-led companies with promise who later go on to have greater rounds of funding in VC (series A, B, C, etc), take on Private Equity or Public Equity, or simply exist in perpetuity generating economic activity and changing the lives of their employees, family, friends, and customers.

Investors:

True to its commitment to access, Seed is considering opening up an investment round to the community to allow investment participation in its growth journey. This is a unique opportunity that is typically only afforded to institutional investors and high-net-worth individuals.

Click here to be considered for investment in Seed at the Table and support socially responsible businesses!

Businesses:

Ready to fund your business growth and get connected with resources? Sign up on Seed at the Table to connect with potential investors who share your values and other viable resources to grow your business.

Email Support@SeedAtTheTable.com to sign up.

Follow Seed At The Table on social media:

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