Expert opinion: method for properly preparing your fundraiser with Fabien Collangettes

For our First Word from an Expert, we are turning to a VC (Venture Capital), in order to talk about best practices for its fund raising.

VC and fund raising

As a reminder, the VC is a Form of financing for startups that involveFund investment by business angels or specialized investment funds. And before going to apply for a VC, it's best to be well prepared. First, because fundraising is a process that does not happen overnight. In fact, an average of 9 to 12 months can elapse between the first official meetings and the final financial benefits. It is most often estimated that a fundraiser covers a 2 to 3 year period of activity, which corresponds to the time needed to define the next stage of value creation and launch a new business line.

Today, we are focusing on series A and series B fundraisers. A “series A” is usually the first major fundraiser with institutional investors. The funds raised during a Series A round are most often used to develop the product or service, expand the team, fund research and development, and support initial business growth. One “B series” allows you to support the expansion of its market, the growth of its customer base, the development of new functionalities or its geographical expansion.

Presentation by our expert: Fabien Collangettes

For this first part, Arnaud Longueville, co-founder of the Mprez agency, interviewed Fabien Collangettes, partner at Omnes Capital, private equity firm dedicated to energy transition and innovation. He has extensive expertise and experience in the field of Venture Capital and was able to offer us an informed opinion on appropriate behaviors and actions during a fundraiser.

To introduce Fabien, know that he started his career at Accuracy before co-founding a startup bought by CIS Valley. He currently sits on the supervisory board of Sekoia.io, Quandela, Own Security, Elistair, Elistair, Capsule Corp Lab, SeqOne Genomics, Iktos, and Qubit Pharmaceuticals. Yes, just that. Oh and, in addition, he participated in the sale of two companies in which he had invested: Sentryo (sold to Cisco) and Antelop Solutions (sold to Entrust). He has been with Omnes Capital since 2017 and was recently promoted to partner.

Arnaud, aka our Village Manager at Mprez, has known him for several years, since they met when Arnaud was working for the Federation of Business Angels (France Angels), and Fabien was in charge of one of the federation's networks, PBA (Paris Business Angels), which is one of the main Parisian business angel networks.

Thus, Fabien is the ideal interlocutor to talk Fundraising and pitch deck.

Initial roadmap

Above all, underlines Fabien, you have to be well prepared and able to be responsive when starting any fundraiser.

He supports this idea by saying that it is imperative to know how much you want to raise, what to do and what stage of value creation must be demonstrated. “You need to evaluate 2/3 year plans and have a good understanding of the fund market. It will do no good to have illusions or to leave blindly.”

“The important thing is toBe specific in the funds you are going to seek and to look for only the most useful ones. You need to know how to listen to weak signals in order to better size fundraising. Ask yourself What is my speech, my storyline, the amounts raised needed ?”

Once these steps are done, we move on to action: “I recommend having a List of ten funds that they would like to have in their round table and keep them regularly updated, through meetings or newsletters. You have to meet them and maintain relationships.

-Even if the funds are not yet in their capital? Arnaud is surprised.

-Absolutely. The key word is to create a link, to be one step ahead of others.. We have a company that does that; it will be leaving on the road in nine months and has already gone on a small tour of the table in the United States by taking advantage of big conferences to, informally, talk to people, say that it plans to do this. You need to fuel your fundraising; That's what we're going to call pre-marketing.”

Finally, Fabien defines the last stage of this roadmap with this question:”What is my runway?”

In other words, You have to know when you are going to run out of money, at which period our fundraising will dwindle. “You always have to put yourself in a pessimistic scenario in order not to have illusions.”

The art of the pitch deck to convert

After all these steps, when you reach “T zero”, as Fabien defines it, you have to leave pre-marketing and start the rest of the celebrations, namely the Pitch Deck. In fact, the Pitch Deck is essential in this environment since it allows present and “teaser” a project. In a way, it is the first strong impression that will make it possible to gather, or not, the crowds around a business project. The pitch deck, a presentation document that is often digital, is there for push fundraising.

“For a pitch deck to work, it must be ultra-well prepared, ultra-polished, ultra-precise, with a very clear and impactful storyline. The pitch itself must also be well prepared.”

For Fabien Collangettes, the secret of a successful pitch deck is a well-thought-out pitch and visual design that delivers the right messages and good intentions. In addition, it is necessary to have the answers to the main questions at your disposal, which implies solid training, to be ready for all eventualities.

”It has to be an extension of yourself.”

He also points out that some people have it easier than others in this exercise, but that the main thing is, at least, to train enough so that the professional posture is as embodied as possible.

Fundraising relationships

Introductions to these exercises can be exhausting, even though the pitch deck has not yet arrived!

According to Fabien,”What works best as an intro is the connection. Typically, rely on its base of historical investors to help with connections and allow better qualification of investors. This makes it possible to maximize the scheduling of appointments.”

Besides these start-up nudges, he presses The importance of rhythm : “You have to pace things, set the pace, relaunch, be proactive and answer questions easily and quickly. Keep up to date and put dates for upcoming appointments. That's how it will unlock situations.”

Moreover, during this exchange, Arnaud compares the practice to that of a commercial and Fabien goes on to say that, like any commercial, the key word is to have the Funnel sound control.

Historical players and the signal sent

If not, what are the best practices for historical investors?

Fabien: “Generally, we keep them up to date through investor boards; it is very important, at least twice a year, to communicate on roadshows. You have to be transparent and communicate and distill essential information. In addition, it allows collecting investment information from former investors. We can then ask them what their strategy is, what do they want to do, what do they want to do, strengthen themselves, leave, stay as they are, etc. Everything depends on the situation and the funds, obviously, but you have to have an overview, an understanding of the state of the machine.”

Fabien puts a A point of honor and attention on the interest that historical investors will show On the new fundraiser : “Newcomers are always going to want to know what the historical players are going to do. If people want to quit or not reinvest, it's a weak signal that we're sending, and people are very sensitive to it.”

Arnaud: “Finally, it's the beginning of a global interest response, especially for people who don't know you from Eve or Adam.”

Fabien: “A lot of funds don't do that, which I think is a shame. It's flattering for historical actors and you get a lot of information.”

He concludes by saying: “the only answer we want to hear - that any new investor wants to hear from historical investors - is Yes, your box is out of date, I'm staying and putting it back. You send a very good signal when you have a third, or even half of the historical ones that come back.”

On the other hand, a temperate discourse implies that confidence in the future is not optimal and this discredits society. So pay attention to these Weak signals.

“Weak signals can easily be what kills or doesn't kill a process,” says Fabien. “In my job, I get lots of decks that don't look good, websites that are just as ugly, and these are weak signals. I'm hanging up.”

The final checklist

Finally, here is a non-exhaustive list of what makes it possible to get increased attention from investors:

• Be recommended by someone that investors trust.
• Get promises from investors who want to send money, because the world brings the world and if a potential investor knows that company X is going to join the fund, then they may be tempted to join the adventure as well.
• Be proactive, convinced and expert in your sector.
• Maintain an even line of conduct: the first impression is decisive, but the next one is just as important and don't let the flame go out!

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Thanks again to Fabien Collangettes for this great interview!

We hope that it has aroused your interest and that you now feel ready to face your next roadshow!

See you soon at the Kings of La Prez 👑

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