I wanted to share our experience while raising capital during the pandemic. We had to address challenges that we would have taken for granted and wouldn’t have realized during ‘normal’ circumstances. Although these challenges may seem simple, they have a big impact when raising money successfully during a time where investment transactions for start-ups are drying up.
At Royal, we were in the midst of raising capital when the pandemic was declared, and shelter-in-place orders initiated across the U.S. It was a challenging time, to say the least, because we were both pitching investors and trying to fulfill purchase orders and keep products stocked when manufacturing was shutdown. Thankfully, we were successful at securing funds — but it didn’t come without challenges.
Challenge 1: Not being able to pitch in person.
Having an in-person meeting allows you to read body language, gauge facial expressions, and provide a personable touch to your presentation that would otherwise go unnoticed.
What we did: When the pandemic hit, we reached out to selective investors that we had closer relationships with so when we had to switch to video or phone presentations, the “in-person” factor would have less of an influence on our outcome.
Challenge 2: Timing and communication.
During this time, our business is not the only one asking for money and investors are also trying to mitigate distress in their other companies. Time and communication are valuable now more than ever.
What we did: For each of our meetings, we made sure to refine our pitch deck to remove any “fluff,” so we got straight to the value proposition. Additionally, we mapped out potential questions they may ask and had those answers ready. We also did a test run on Zoom or Skype to make sure there was no chance for technical difficulties. It’s imperative to be thorough and expedient.
Challenge 3: Getting everyone on the same page.
Right now, everyone is dealing with their own difficulties — whether that’s mitigating business losses or figuring out the logistics of a new work-from-home situation with the kids. Getting everyone involved on the same page — at the same time — can be a challenge.
What we did: We made sure we dotted every “i” and crossed every “t” so that we could seamlessly execute the deal. We worked to ensure board members and partners were on the same page, and meticulously prepared term sheets and documents. While this may seem small and/or obvious, being united and streamlined allowed us to raise capital quickly and without any kinks.”
What challenges did/are you coming across when raising capital in this environment? How are you overcoming these challenges? What’s working and what’s not working?
Comment below and let’s work together to push through this tough time!