Getting ready for the ring: What every startup needs to know before meeting an investor

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As a startup, you want the chance to show investors what you’ve got. As we learned at a panel hosted by Xero and Silicon Valley Bank, presenting your great idea requires having the systems and partnerships in place to successfully raise capital.

Panel host Larry Yu, Marketing Partner from Accel, dove deep on the topic of getting investor ready with Campbell Brown, CEO and Co-founder of PredictHQ, an event intelligence platform. Keri Gohman, President, Xero Americas and Megan Minich, Head of Product Development and Channel Delivery at Silicon Valley Bank, also divulged how technology companies and banks can help startups with the tools and resources to boost them to scale.

Support your vision with data

Campbell explained that you’ll never be completely investor ready. However, by determining the five or so key metrics you want to have lined up, and if you can achieve them, then you can be as prepared as possible. That said, he sees a lot of startups focusing on the wrong metrics when scaling.

“We’re trying to build a profitable and sustainable business and we feel that if we do that, everything else will fall into place,” Campbell explains.

He’s observed a change in the market where VCs are sick of startups selling them algorithms. He would rather see the data to support the vision of the business.

“Show how you are going to go from $1 million to $10 million to $100 million,” Campbell says. “For me, that’s a great thing, you’re talking about how to truly scale a business.”

Keri agreed, explaining that VCs want to be able to see that you know what you’re doing.

“If you really want to be investor ready you must have your business plan in order and your team in place,” Keri said. “That doesn’t mean that you’ll follow that business plan perfectly, but you’ve got a place to start.

“Show some amount of track record, that you have financial controls around your business and you understand how it’s working. Then create that professional package of demonstrated results over time. And that’s what having a solid system and solid financial baseline can do,” she said.

Leverage an accounting platform and your bank relationships

Xero and Silicon Valley Bank have created integrations where our mutual customers benefit from their banking data flowing securely and reliably into their accounting platform. This means that entrepreneurs can better manage daily bank reconciliation.

Subsequently this gives them an accurate and comprehensive view of their finances. It also gives them the ability to compile high-integrity financial reports for investors quickly and simply.

Choosing the right advisors – accountants and bankers – is critical, Campbell says. He explains it makes life easier for him and his team.

“I don’t want to have to wake up in the middle of the night and think what our P&L is going to be. It’s just there; that transparency is huge,” Campbell says.

“I don’t have 12 hours in the day to focus on one thing, you’ve got to be able to multi-task. And I think that comes from using the right platform and the right banks.”

Campbell says the worst investor meeting he has ever been in was also the best because he learned so much from it. He describes it like a boxing match, where the VC told him outright that they didn’t like what he was doing. He had to get on a flight that night. And when he was in a taxi headed to his next meeting, he had a moment of clarity.

“An AC/DC song was playing, I wound down the window, retriggered and reset,” Campbell remembers. “The thing about capital raising is, your mental limit is higher than you think. I went into my next VC meeting and it was a huge success. If you know your business from the ground up, everything starts to flow.”

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