Black Diamond Series: These 10 Slides Raised More Than 7 M$ Including Our Series A Round
2021 was our best-ever year. We also raised more funds than ever.
I am in my 8th startup with a leading role, in addition I have advised and mentored about 100 other startups. Fund raising takes time and mostly you might be met with a “no” from the investor, causing frustration and perhaps wearing you down. So how to succeed with fund raising?
Here is an example, taken with ROCSOLE, on how we are implementing the BLACK DIAMOND Scaleup Strategy, and the main pitchdeck slides (only 10!) that brought us the wanted funds from investors. We raised more than 7 million $ in 2021. It was continuous work, adaption and pivoting of our strategic plans, business model, all reflected in the high level in the pitchdeck slides. I talked to a lot of investors, those I knew from before and many new. European, American, Asian. I was able to build a lot of new connections. My list of investor relations grew exponentially and now I have a very much up-to-date investor database. We know who are interested in upcoming funding rounds. We know their field of interest, sweet spot investments and much more. But even more important — we know what strategic value they can contribute with in terms of supporting us. Go for the smart money!
Also remember that getting investors to commit, is also a commitment from your side. You now have an agreement and it is up to you to implement and execute your plans, to achieve the next milestone. You set up expectations for yourself. That’s why a good solid strategy, following a playbook for success is critical. The Black Diamond Scaleup Strategy is something that has evolved from years of my own mistakes, learnings, successes and exits to form and build companies.Every startup is unique, so you need to add learning and adapt the strategic details accordingly. But the main structure should be set.
So let’s jump to it — what are the main slides we were using?
Before reviewing those, let’s remember the main building blocks for the Black Diamond Scaleup Strategy: TEAM, PRODUCT, MARKETING and FUNDING.
PRODUCT. Here we used five main slides:
(Note: The numbering is referring to the slide number in the pitchdeck).
1. The Problem. Show what is the main pain point/problem in the industry. What are the effects and costs of this. For us, we used the industries weak point of lacking real-time data for dirty and harsh conditions, causing a majority of failures in operations with the effect of loss of production and revenue, high manpower and maintenance costs.
2. Our Solutions. What are the solutions you are providing. How do they fit into the business models. What is your sales model and what type of revenue do you generate. Here we show how our solutions are implementable in a variety of applications. We also described our selling model to investors, a vast majority wanting to know how to build dependency and recurring fee models. With our unique own data, we are disrupting a traditional industrial market by first qualifying the solutions with the end-users and getting them to want more (they have never had this type of insights previously). With the additional features and data analytics we can provide, we have also a recurring fee model.
3. Competitive Landscape. Of course, there are always questions coming on how unique are you. Does the competition provide the same. And there is always competition, the worst one I would say, when you are a disruptor is the STATUS QUO. When you want to innovate you have to collaborate (with corporates) and change their mindsets. This is a big effort, but succeeding with this you also potentially build big hurdles for others. We use how we can generate more detailed insights and more frequent data in harsh operational conditions. This has been our target all the time. Also, many times we did not just discuss the direct competition, but also other indirect competitors. This allows to show our own knowledge, insights and the potential of our technology and solutions.
4. Technology Uniqueness. What makes your technology unique. What is your know-how and intellectual property. What recognition have you received. We show how we are an academia spinoff, where we also used our industry knowledge and built a hypothesis and idea on how we could make a technology transfer. Also over the past two years we have received an enormous amount of international recognition and awards for our ground-breaking technology. All this was well-appreciated by most of the investors we have been talking with.
5. Value Proposition. Always, when doing a startup, think about what problem is it solving and what value are you creating. Technology, AI/machine learning etc are all cool — but look at how it can serve a purpose to enhance your solution and build something that is unique. We solve critical bottlenecks for end-users with our unique data, and we do use a variety of tools such as artificial intelligence and deep learning, as it makes our solutions extremely quick in delivering insights, that for instance, support operational management and decision making. Also the uniqueness is supporting the bigger themes in industry such as automation and decarbonization.
MARKETING. Here we used two main slides:
6. Market size. Is there a large global total addressable market. What is the beachhead market. We have spent a lot of time with customers in terms of building MVPs, piloting and getting used feedback. With this highly valuable information, we have also been able to match it with the best-fit applications in very large markets. But to gain traction we have to focus. We have found a killer application in a niche market, our beachhead, where we are in a growth phase aiming at being the market leader in the nearby future. We also got support from several accelerators, customers and other advisors in deriving to this focus and strategy.
9. Who we are. Basically addressing our uniqueness and the customer portfolio. We are in the commercial phase with the company, and working with leading international corporates as our main customers does help in terms of getting investor attention. It shows that we are on a path to disrupt and make a big impact. Set common practices are changing, and corporates are doing a big effort to implement our solutions, as they create high value for them. This gives us confidence in the scaleup and the set strategy we have. A typical question and what investors want to know is the market and customer traction. You want to be prepared for this in meeting two and three — as this will be a strong indicator for that you have a strong plan, customer attraction and uniqueness with your value proposition that customers are buying into.
TEAM. We used one slide:
8. The Team. As I have emphasized (see other of my articles) I see the TEAM as the most important asset. Investors want to know who you are, why are you the right ones to disrupt a market, what have you done previously. Do you have the capabilities, stamina and skills to make the startup to a shining star. And how quickly? What we mention is our strong capabilities in technology, markets, entrepreneurship and the international network we possess. We have built a variety of companies. We have competed internationally and become a market leader. We work well together and know how to challenge each other. For our team, I have heard a variety of superlatives from investors. I know we are the right ones to do this. The support of the board is also important, how are they actively supporting us, what synergies do we create?
FUNDING. Here we used two main slides:
7. Financials. Show the past two years performance, this year and the forecast/plan for the coming two years. What are the basic assumptions, how is the growth generated. Is your company built for linear or exponential growth. How dependent is your company for increase in manpower to generate growth. The financials slide actually continues a very important discussion on the business model and understanding for the key risk elements. We show on how we are able to grow on an exponential scale which is not directly linked to the headcount in the company. Also we built several scenarios to show on the robustness and risks involved. This is work we are constantly assessing in terms of our company SWOT, risk management and strategy implementation. In the end it all comes down to execution.
10. Our ask. This was not part of the main setup, but the funding and use of funds is something that needs to be discussed in one-on-one sessions with the interested parties. When we had attracted interest (buy more time!), we got involved in detailed discussions and due diligence processes. Investors will want to know what is your fund raising track record, who else is already giving a commitment, do you have a lead investor. It does not necessarily mean that you have to disclose all the details in the discussions, but be frank and honest, it pays off. We told investors about our solid fund raising track record, key investors already committed in earlier fund raising rounds, and the details of our use of funds, how this is taking us to our next major milestones.
Post-closing.
Our plans, strategy and business model has evolved over time. We have been working hands-on, with strong customer drive and commitment. We are agile and ready for pivoting, if deemed necessary. We dare to win — meaning that we want to scaleup the business, and learn to adapt and make this a succcess. And it takes a lot of effort, but it is at the same time highly rewarding and fun.
It takes time to build the business idea and model, and how you are going to do the strategic implementation. But gosh, when we had closed the round we got overwhelming feedback and encouraging comments from many investors who did NOT commit in this round. We have obligations as a team to perform and deliver, something we are used to. At the same time we are highly excited about the future and working towards achieving our milestones. We have a pool of serious investors onboard and others who want to join us in the coming round. The future looks bright.
Best of luck with your own fund raising! We will be back in the markets for new fund raising rounds at some point. Our mission and road map is very clear. Disruption and collaboration at the same time.
/Mika
