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10 Dos and Don'ts When Raising Capital for a Fast-Growing New Business VCs know the score, so any attempt to snowball them won't work. Tell them what they need to know, though, and you're likely to get invited back.

By Peter Daisyme

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It's a great problem to have. Your business is growing, but to keep the momentum going, you need additional investment fast. In the rush to get a green light from a venture capitalist, it's easy to lose sight of all the future meetings you hope to have with that person.

One of the best ways to make your successes repeatable is not to allow your internal sense of urgency to color the way you approach your VCs. You want the pitch experience to be enjoyable and profitable on both sides. Regardless of the investor's response, conduct every aspect of your current pitch meeting so that you'll be warmly welcomed back. To that end, here are some dos and don'ts to live by.

1. Do present a clear, easy-to-understand timeline

Come to your initial meeting armed with an investment-to-completion calendar that features key milestones for your project. "Arrange meetings with a start and end date in mind," advises Kim Kaplan, founder of Snack, a video-centric dating app. "Provide a realistic timeline that allows space to bring new investors into the process but also ensures your fundraise doesn't stall while waiting for decisions." Kaplan's advice is well worth taking. Her previous venture, Plenty of Fish, sold to Match.com for $575 million.

2. Do clearly demonstrate your investability

Don't make the mistake of assuming that, since your VC agreed to meet, the worth of your investment is already clear. Regardless of how many preliminary conversations you may have had, walk into the meeting ready to talk participants through every aspect of your business. After all, the VC might add an attendee at the last minute. Curate all relevant numbers and documents ahead of time and bring additional copies.

Related: How to Become Investable in 13 Steps

3. Do offer an informed rundown of your competitors

It's a safe bet that your VCs are running their own analysis of similar businesses, so you need to know your competitive differentiator. "Even if you're the first to market," notes angel investor Sarah Downey, "competition could cut down your position and your ability to command a high price whenever they choose to."

So show your investors you understand the competitive landscape. When you proactively offer a clear picture of your competitors to investors, you send several positive messages: 1. You are not pretending other investment opportunities don't exist; 2. You are confident your business offers a better ROI, and 3. You have calculated the risks and made any necessary adjustments to offset them.

4. Do provide best- and worst-case scenarios

Being a realist will win you a lot of friends as you work your way through any community of investors. By offering a complete spectrum of possible post-investment outcomes, you allow your VCs to assess the risks and rewards for themselves.

Using all of the data and market analysis you have to offer, chart out your "sweet spot" along the spectrum. This should be represented as a zone where you hope to land, with everyone walking away a winner.

5. Do list all contingencies

Will your investment opportunity be affected by extreme weather events? Does the venture rely heavily (or entirely) on the continued good health of one or two individuals? Is there a backup strategy in place for multiple variables?

If the pandemic has taught us anything, it's that we need to allow room for the unexpected. Your job is to make sure you have thought through the weak points in your case and made plans to counteract them.

6. Don't waste time

If being a realist will score you big points, then wasting investors' time erases them. Think of this as the cardinal rule for all of your interactions, not just with VCs but with everyone. Avoid the dreaded "one more thing," whether in person or via email or text. Send one clear, concise and complete message.

Related: 11 Ways You're Wasting Time Instead of Doing What You Need to be Successful

7. Don't fall prey to siloed thinking

You don't want to miss the obvious, and you really don't want someone at the pitch meeting pointing this out. One strong way to avoid this is to practice your pitch beforehand with someone who knows absolutely nothing about your industry. Be prepared to listen carefully to the questions that pop up rather than dismissing them.

8. Don't use pressure tactics

If you aren't sufficiently confident in what you have to offer, you might be tempted to resort to pressure tactics to move an investor along. Rest assured that any VC you approach has been through several high-pressure meetings and still said "no." If your investment opportunity can't speak for itself, you need to go back to your presentation and effectively address the weak spots. People recognize bluster when they see it, and a savvy VC didn't get wealthy by caving to it.

9. Don't balk when asked how much you need

If the "How much?" question comes, be prepared with a straightforward answer. There is a world of difference between, "I've included estimated figures on page 27" and, "$15 million." Even if the number is clearly spelled out in your proposal, don't obfuscate when asked. It's possible the person asking already knows the answer and is merely probing a bit deeper to see what kind of person you are.

10. Don't overpromise

This is where the future pitch meetings you anticipate should be top of mind. If you are the sort of person who overpromises, word will get around fast. When dealing with potential investors, it's always best to keep your enthusiasm tempered by an approach that demonstrates care, diligence and courtesy.

Related: How to Exceed Expectations and Never Overpromise

Don't get so hung up on dollars that you forget you're dealing with people. The old rule about putting yourself in someone else's shoes applies here. What information would make you part with your hard-earned money? Dig those up and articulate them clearly. When you let the facts speak clearly, you're much more likely to get invited back.

Peter Daisyme

Entrepreneur Leadership Network® Contributor

Co-founder of Hostt

Peter Daisyme is the co-founder of Hostt, specializing in helping businesses host their website for free for life. Previously, he was co-founder of Pixloo, a company that helped people sell their homes online, which was acquired in 2012.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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