Fundraising for a startup is probably one of the most stressful tasks for a young CEO. Correctly pitching a business model to encourage investment can determine the future of the startup’s ultimate fate. Without proper financing, a startup simply cannot succeed. Pitching a startup’s purpose or pitching a new technology is a tough process, one that many young CEO’s are simply not equipped to do. One organization, First Round, is preparing young entrepreneurs for the fundraising process. First Round offers CEO’s a bootcamp program, training them to pitch their ideas in a manner appealing to investors.
Financing is an absolutely vital stage in a young startup’s life. Today, much of the first round funding has seemingly dried up for many companies, making fundraising that much more difficult. Funding for new ideas and technologies has become increasingly tight, showcased recently by Pittsburgh-based 360fly Inc. The company found itself in unfavorable terms in their second round of financing, where they were valued at about $105 million, and gathered $40 million in financing according to Bloomberg News. If the company were to be sold, investors would receive 1.5 times the amount initially invested, before employees and other shareholders.
The bootcamp program – called Pitch Assist – is designed to teach individuals how to properly pitch an idea before going into the first round of financing. Business Insider describes the program as a two-six week program that hammers away at “lessons that are part Sales 101, part human psychology, and part tutorials on practical tasks like creating slide decks.” It’s main task is to have startup founders focus on selling the broader vision of their company, instead of the complex product details.
On the first day of the bootcamp, pitchers and CEO’s are put under heavy scrutiny by investors. Tough questions that CEO’s may not be ready for are the norm, attempting to find flaws in the new company’s goods or services. Addressing problems head-on are one of the bootcamp’s first lessons, followed up by hours upon hours of practice for every minute pitched. CEO’s are also taught not to reveal all of their strengths in the beginning of the presentation, instead, leading up to different strengths throughout the entire pitch. Once they have undergone hours of practice, the CEO spends hours practicing with the Pitch Assist Team, and then to the organization’s partners.
According to Business Insider, since the program started 25 startups have gotten training, raising almost half a billion dollars in follow-on rounds. A truly successful effort if measured relatively. If you liked this post and would like to read more on startups and Venture Capital, check out my twitter @ for more. Thanks for reading!
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