As a B2B tech company, you know that you have a lot to offer investors. Your industry is one of the most dynamic and innovative out there, and you’re poised for success. However, attracting investors can be a challenge.
In this article, we’ll share 8 tips for B2B tech companies to better appeal to investors. By following these tips, you’ll be able to show investors that your company is a good investment and increase your chances of securing the funding you need.
The first step in customer acquisition is developing the right kind of customer acquisition strategy. Businesses that have the greater attention of their audience are the ones that stand the most chance of scale, and they’ll have a leg up in acquiring new customers.
If you believe your audience is snoozing at your startup’s current stage, you’ve got a bad start. The best way to improve your audience’s interest level is to invest in improving your product and service.
Tech businesses should always ensure that they spend their time looking for prospective and potential customers and focusing on how to really capture and convert their attention.
When you’re creating and developing something, one of the most important things you can learn is what your audience needs. When you know where they’re at, you’ll know where your audience will be and you won’t waste time covering the same topics.
Don’t drop content or blog posts into the ether because some random idea just popped into your head. That focus isn’t useful because your startup audience might not know about this new idea. Invest in collecting data over some form of survey so that you can form a readership that you can then address with that data.
Have a plan of action and know how to communicate it well. If your service solves a problem for your ideal customer then there is a good chance you can sell more services rapidly because they think you are the "dream company." This does not mean all users will love your services, as you will face various challenges that can repel and drain away your customers. You need to have a clear understanding and picture of your ideal customer and what they want.
Companies can pitch great ideas from their product to service that will sway the reason from one investor to invest for the future of their company.
The pitch should not only include details on the product or service but also identify the reasons why the investors should invest their money. Although a pitch is important for getting introductions, it is not representative of an idea as it is just a general outline of the idea.
Every pitch should have multiple outlines of graphs, research or actual people who can speak on certain topics. The objective of this template is not to direct the reason as product company to escalate from sales and customer questions department.
Ideally, a technical company should write the pitch in such a way that the proposal goes to a technical person inside the company. Each category can be represented by relevant data, charts, and graphs that work together as one and are representative of one concept only.
The rhythm and cadence to writing an investor communication that works is similar to the framework you'd use to teach someone the alphabet or speak your native language. If you are planning to pitch, approach an early adopter of your offering, it's important to think about investing time early on in learning about investor philosophies and pitch styles, so that your writing aligns with their expectations. Communication is flowing smoothly between you and these early adopters at your early stage; the pitch moment will come given the seeds are planted.
Figure out your pricing strategy before you start so that you are not caught off guard when it comes to pricing options like up-front fees or discounts.
B2B companies that are able to focus on the product offerings more than on the price of the service will have an advantage over the rest.
The "buyer's journey" ideal is an approach that buyers follow in completing their journey towards buying a particular product. A buyer’s journey is structured with different steps, activities, activities, and stages. The buyer goes through these steps in order to find, identify, detect, satisfy and convert their decision to a purchase. Why should you care about the buyer’s journey? An engaged customer will make purchases more frequently and with higher amounts. Getting a customer to convert from "interested" to "interested lead" to "buyer" comes down to how well you understand your ideal customer profile. The care you put into the research shows in your pricing strategy.
Investors see a lot of startups or new growth companies. They are pressured to make a conscious decision about how much of their own investment amount they want to put into your company. However, you should always start small – you should try to fail with your first few investments before you venture on with a larger investment amount. In fact, Gartner conducted a study that selected 25 successful SaaS startups and asked them how large their previous customer base was when they first started from scratch. The answer was 8 to 900 before their first launch.
Which startup was not able to get over this initial hurdle because they didn’t co-found with another experienced founder, or didn’t huddle together with executives with significant opportunities or experience?
Yes, you will fail initially. It is impossible for you not to take risks, but you need to be able to recover from failure. Consider hiring an advisor (or entrepreneur) or getting strategic advice from another team with a proven track record, in this case, a CPA firm.
There is a wide variation with regard to the best position for a company that is looking to raise money. Investors get inclined towards different businesses based on the extraordinary and compound interest earned. Some are inclined towards retail such as brick-and-mortar stores, some are inclined towards ecommerce, some are inclined towards technology-centric ventures and so on. So your job is to select the best position which suits your company according to its strengths and needs to cash in on the the interest received by investors.
Creating your leadership team should be a top priority for your business. Fill your team with the best people for the position and keep them there. This will be the foundation of your leadership team and business’ success or failure.
In general, founders think that their leadership team isn't all that important. After all, there are other things to think about including financial goals, strategy, and even personal aspirations. Now their thinking, "All I got to do is have all this sorted out. Then I'm ready to work on building a leadership team."
While order is great in most instances, doing things in this particular order is not the most efficient way to get started. So let’s get right to the points:
Don’t start your business with people who don’t know your industry, have the expertise you need, or have the skills to get things done. This can be costly in the long run.
It’s easier to add to your team later, when you make mistakes. Do actions, and improve your leadership-building-stakeholder relationships. Earn trust and even a promotion in positive feedback and over time.
Hire based on complementary skillsets. Know where your shortcomings are and find a leadership team you can trust to delegate work to so that they can get the job done, better than you can.
Sometimes, being valuable for certain industries requires tasks that are not always universally understood or appreciated. Having plenty of self-confidence and a desire to succeed in life and work will boost your business much more than thinking of and planning around money and growth.
Go beyond the role of being a product developer or a social media manager to understand what the market is. Be a marketer first and a product manager second. Follow the trends and learn from them. Do your research. Understand how the market is evolving and what’s going to be the next big thing.
Staying in your lane and only doing what you're good at is an old adage that doesn't always ring true. Innovation comes from the willingness to be curious, to have a growth mindset. While it's important to have specialized roles in your leadership team, take the time to think and understand more than what your role or skillset entails.
You are building a team of people who will be working with you for a long time, so you need to trust them. The team has to feel like they are working on their own. Trust them to succeed and then give them the freedom to do the job. You will see their growth and development in their skills and talents, and this will help you to grow your business as well. Autonomy plays a big role in your founding team and the ability to let go and to trust your team to do what they have to do themselves is a valuable attribute to have.
When you start your B2B tech company, you know that getting investors is the only thing that matters, or at least the one thing that's always right on the top of your agenda. So you pull together a binder and start calling everyone with deep pockets you know is hungry for startups. You do it every single day until the company you call is finally comes in. Think that's a good idea? Sadly, it's not.
The key here is to focus on your execution, that is, doing all those awesome things that you’re so excited about—hiring the engineers that will grow the company to be a run away success, laying down the law about everything that’s going to make your team a powerful and coordinated team. Getting back to basics is really how you can win the game. The goal here is to show results. Having a working product alone isn't going to cut it. You need to have traction and show a steady growth rate. All this comes down to your execution.
When it comes to raising a round of financing, you may well feel like you can win in your execution game. However, attention-grabbing founders typically secure the funding they need faster than companies with lesser execution. And what’s worse is that even you do everything right or consider raising a round of financing that is 4X larger than the last round, it can still go wrong.
If you look at what the most successful companies did to secure their funding, then you’ll see that execution matters, finding a massive round of financing is not the only thing that matters.
In any kind of starting a business, it is really important that you cultivate relationships with potential partners and investors. This is important because you need to be credible for future business.
To do that, you need to invest in finding connections. This can be done through networking events and other normal business events for networking with and meeting potential partners.
Networking helps you as a starting business. There are benefits for everyone who is willing to organize these events. In my experience, I have realized that these kinds of business events usually gather some reputable or potential partners or investors that are new to the industry. This is why it is important that you get in touch with someone who will spark your business by organizing these business.
Now that you've gotten yourself in the same room as them, it's time to make connections. Networking isn't just about the small talk. What matters more than that first encounter is what you do with it after. A lot of people forget that there's a difference between an acquaintance and a friend.
Investors and potential partners are people too and they'll think "What's in it for me?". Your job is to befriend them not just to disarm them for a quick sell but rather to better understand how you can be the solution to their problems.
If you think about it, you should be looking to help people with problems. All in all, someone who can help a potential partner or investor is someone who stands to benefit from the relationship.
If you’ve been building your brand for a while now, you may already have a competitive advantage that makes it easy for your brand to stand out.
Take a quick look at the posts on LinkedIn, for example. Almost 98% of B2B tech companies say their brand is trendy and popular, and that they understand the needs of their customers. But the number one thing your brand should boast about is interestingly enough the fact that it does really, really well at what it does. Without having a competitive advantage—or at least an extra boost—your brand won’t be as successful. It'll just be another run-of-the-mill company like any other.
• What percent of your industry’s companies also boast that they actually do really, really well at what they do? (If the answer is zero or very few, you still need a competitive advantage.)
• How is your brand more committed to and invested in its mission, purpose, and values than the companies in your industry? (A brand that doesn’t take pride in what it does or share those values is a tough sell.)
• Is your audience uniquely fascinated by your brand? How do you stand out from the 80+competitors in your space?
Stay on top of your game and continue to work on ways to be more committed to what you do.
To be successful, you need to focus on your execution. Show your results, not just your plans. You need to build strong partnerships, not just networking. You need to come up with a competitive advantage, not just a plan B.