A startup workshop during the Cyberport Venture Capital Forum 2024 featured the co-founder of a VC that had successfully picked five $1B+ unicorns from the earliest stage.

During one maximum capacity startup workshop in Hong Kong, co-founder and managing director of SoGal Ventures, Pocket Sun, shared very practical advice about how to raise funds, giving unique perspectives into investors’ as well as founders’ mindsets.

The workshop which caters to early-stage startups; especially ones that are founded by women, was an insightful and revealing one for this journalist who is finally dipping her reporting toes into the world of venture capital. Pocket’s workshop, which saw as many men as women attendees, covered fundraising strategies, mindset, as well as how to intentionally prepare for a “raise”, so founders know they are setting themselves up for success.

Pocket Sun of SoGal Ventures

Significantly, Pocket who till today has invested in over 150 startups, also shared about how to close a round (of fundraising) and how to close the loop just so as to be able to get off on the right footing when the investor-founder working relationship begins.

Here is a summary of the highlights in no particular order, that are top of mind for me right now.

Preparing for a raise

“You have to do a lot of prep work when it comes to mindset, research, and how you are going to run the whole process,” she shared.

Considering that investors may have 20 till 30 deals they are considering at any one time, they tend to practice ruthless prioritization. And especially if an investor setup has 10 partners, an investor committee, or IC meeting, for partners to communicate with each other, may not take place till weeks later.

With this in mind, Pocket advised for founders to create urgency and incentivization for investors to act.

Founders need to make their unique value proposition clear in their pitch, while also not forgetting to talk about themselves.

“So, make sure that your pitch deck has all the things that are uniquely you, and uniquely exciting about you. That needs to come out.”

She recommended for founders to not be shy about pushing investors (gently) and showing them what they need to do to help the startup, by demonstrating a clear path to profitability, growth, and significant returns.

The auditorium filling up with attendees before the workshop began.

“So investors are usually not looking for something that’s growing 10% year over year, even though that’s pretty awesome. But venture capitalists are usually looking for way bigger returns.

“So, make sure that in your pitch that comes through. You have to paint a picture where, you know, you can capture a lot or a small part of a big enough market, and there’s enough potential, and there are potential acquirers, there is a potential exit.

“You have to think all those things through so that the investor could literally paint a picture in their head that ‘I’m going to make money if we do this’.”

Setting up a winning round

Pocket is a strong believer of raising money, when you don’t need money. Rather, the fund raising is more for adding value to a startup, for example to create more stability when hiring more tech heavyweights into the team.

“So, whatever your cash position is, and when good investors ask how many months of runway do you have left, talk about what the capital is going to enable you to do in the immediate to mid-term duration.”

Soft pitches are great for gathering feedback to refine a pitch. It’s that phase before fundraising to get to know the market, estimate a valuation, identify ideal investors and understand their investment preferences.

“You want to kiss a few frogs before you actually reach out to the people that you really want on your top list.”

What is also very important is knowing the why, the how much, and the how long the raising is. And what Pocket said with regards to this kind of burnt into my mind, “When you have this frame in your head, if helps you communicate with investors from a place of clarity.”:

Ask clarifying questions – this is important as it can help founders from very early on understand if an investor is a good fit.

Balancing openness with push back

Don’t be not open to feedback, but don’t be afraid to push back if it doesn’t make sense.

As a founder, be open to feedback always, but don’t be afraid to push back. Pocket pointed out that sometimes investors give good advice, but sometimes it could be shitty advice.

“Think about it, you are in your business 24/7, but the investor has met you for only one hour, max, right?

“So, be very respectful of your work. Know what you’ve built, know that it’s worth a lot, and don’t just waver on advice from someone whom you have just met.

“It’s a balance you have to manage.”

Some of the pointers above may resonate with you. But beware that what I share here is only the bare bones, and much more meat was presented at the Cyberport Capital Venture Forum 2024.

If you have an opportunity to attend a workshop with Pocket Sun, do not pass it up.

(This journalist was a guest of Cyberport to their event in Hong Kong)