Hi,
Last week I tackled documentation, this week, it's kind of the opposite. There are things your current/potential investors don't need to know. Find out what those are below. Also
📸 - Social Snapshot- OnlyFans vs EdTech
đź“Š - Which startups get acquired?
▶️ - #1 Pitch Deck Roast
🆓 - Startup resource- Term Sheet Negotiation Playbook
Welcome to issue #89!
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How Much Could You Sell Your Company For?
If a private equity firm or strategic acquirer made an offer to you today, would you take it? Would you know if it's a fair deal? Are you in a position to close a deal?
Getting acquired could transform your life.
Founders don't realize that it usually takes 12-24 months to prepare a company for a successful exit, the sooner you have a plan in place, the greater the potential outcome.
If you want to get acquired, we can help. Book a free discovery call with our team of experts to explore your options and discuss getting a plan in place that could change your life.
-------------------------------------------------------------------------------------------------------------------------------------------------------------Social Snapchat
Trending this week, sex really does sell. OnlyFans nearly broke the internet, but not for the reason you think. The internet was buzzing following the revelation of the content platforms' 2023 financials. Harry Stebbings take on LinkedIn helps put it into perspective.
ION:
đź“„ In case you missed out on the Founder Mode story (or couldn't be bothered to read the essay) here's a one-pager on it from Ben Lang on X.
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Pitch Deck Roast
The Fundraising Demystified podcast Season 3 goes live next Thursday! Until then though, here's something from the vaults.
Watch the top episode of the Pitch Deck Roast Series where I reviewed decks from 7 different startups.
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Data Corner
Series A startups are ripe for acquisition
According to folks at Carta, early-stage companies, particularly those that have raised Series A rounds, are most likely to be acquired.
M&A activity increased from H1 2023 to H1 2024 across most stages, which could signal a positive trend for the rest of the year.
More companies seem open to M&A discussions compared to 12-18 months ago, though undoubtedly, not all will find buyers. The analysis doesn't touch on acquisition quality though—final prices and wealth generated remain unclear.
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What secrets should you keep from your investors?
There are some things you should keep from investors. Don't get me wrong, I am not telling you to lie (you can check out the many reasons why this is a bad idea in edition #44) but there are things they don't need to know. At least, not off the bat.
Whether it is during a pitch, due diligence, or an acquisition decision, some info is just unnecessary, and a sure way to put off investors.
When you might need to zip it
Your beef with co-founders
Okay, so maybe your co-founder likes to micromanage or takes all the credit during pitch meetings. That’s annoying, but keep that drama in your group chat. Investors don’t want to hear about the petty squabbles you’re having with your team. If you’re airing dirty laundry, they’ll question your ability to maintain leadership in the long run—and leadership means keeping the ship steady, even when there’s chaos in the captain’s quarters.
Save the venting for your best friend (or therapist). Present a united front to investors, even if your Slack messages are filled with eye-roll emojis.
Your next big pivot (that’s still a half-baked idea)
The infamous pivot. It’s natural for startups to pivot when things aren’t going as planned, but if you’re still tossing around new ideas in your head, don’t mention them until you're sure. Investors want to know that you have a clear vision and strategy, not that you’re about to pull a 180 at the first sign of trouble.
That said, if a pivot is truly in the cards and it’s been vetted and analyzed with a solid plan, then bring it up. But for now? Keep those wild ideas in your brainstorming sessions.
How broke you are
I know being a founder is expensive- there are plenty of stories about entrepreneurs surviving on ramen in their mom's garage. But if you start talking about how you can barely afford your rent or how your credit card is maxed out, investors are going to worry about your financial stability/runway. They might start questioning if you have the financial acumen to run a business at scale.
Of course, they know that startups are risky, and many founders are strapped for cash early on. But no need to announce it. Focus on the runway you do have, your cost-cutting measures, and how every dollar is spent efficiently. Investors love frugality, but they don’t need to know you’re about to sell your TV to cover payroll.
That one investor who didn’t believe in you
Did a high-profile investor pass on your deal? Don’t bring it up. First off, it signals to new investors that maybe there’s something they’re missing if that other big-name investor passed on your company. Second, it makes you look too focused on rejection, which, let’s face it, you're probably going to encounter a lot.
Keep the pitch positive. The ones who passed don’t matter—focus on finding the ones who do believe in your solution. Investors are attracted to confidence, not to a founder who’s dwelling on the negative.
This last one seems obvious so I won't go into it at length but I'm surprised how often it comes up. Your personal/love life is not the investor's business, your business is. If your significant other is upset about all the late nights, that should not be on the agenda for your chat.
I know I've talked about transparency, but oversharing is a thing too. Stay focused, steer clear of drama, and keep positive. It’s normal to have those "oh-no-is-this-the-end" moments, especially when the numbers are looking a little shaky. But while it’s important to share key performance indicators, please don’t make investors feel like they’re signing up for a sinking ship.
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Happy with Fundraising Demystified?
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This week, we share our playbook for setting up your data room to make you investor-ready.
đź“– - Playbook for Setting Up and Sharing Your Data Room - Download it Here
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