Phase 4
Test the waters and iterate
Fundraising Masterclass
Swisspreneur Fundraising Masterclass - Pascal Koenig
Now is the time to present your plan to investors. You will first talk to three independent investors who bring in a neutral, external view. This will help you to iterate the teaser and fine-tune valuation.

Once you have done this, you can send out the teaser (incl. proposed terms) to your existing investors (if you have any). Setup a call with each of them to get feedback and find out whether they plan to participate in the round. Make sure the board members (which are typically shareholders) and the team support your plan.
Why not start the feedback process with existing investors?
Here’s why: you have built up a history with existing investors. They may think that you are a superstar. Or they think that things are moving ahead too slowly. They most likely have an internal agenda regarding your valuation; it could be that they want to see a massive valuation increase from the last round, or a low valuation to increase their stake in your startup at attractive terms.

So while the view of current shareholders is crucial, we propose starting the initial review with external investors to understand how independent, new investors would look at your case.

Depending on the complexity of the current shareholder structure, this phase will take 2-4 weeks.

Select three (renowned) external investors

Many startups don’t seriously test their teasers in the market before kicking off the financing round. Some only test it with existing investors, who already know the case and may have an internal agenda. Others only talk to friends, who tell them how great the case looks. This is a big mistake, and can result in a failing financing round (which often endangers the entire startup).

So you want to present the deck you worked out in the previous phase with three external investors. They should be friendly, but fully independent – and willing to give you radically open and transparent feedback.

The best way to find such investors is through fellow entrepreneurs who work in a similar but non-competitive space. Ask them whether they have an investor who is great at providing feedback and would be willing to spend an hour discussing your case. You may also look for such an investor via board members, advisors, or go out to find investors in your network directly.

Here is the email your fellow entrepreneur may send out: 

“Hi X, my colleague Y is building Z ( and gaining lots of traction. They are thinking about doing a series ? round, and would very much like to discuss their plans with an external expert to get radically transparent feedback before kicking off the round. I think you would be the perfect person to do this: would you be willing to schedule a one hour video call with my colleague? Best, [Name]”

In general it should be quite easy to find three investors who are willing to do this. After all, investors are interested in evaluating new cases, and many like to provide advice to ambitious founders. This may even result in a future investment.

It is absolutely fine – and even desirable! – if the three investors are “real candidates” for joining the upcoming financing round. However, you probably don’t want to do this feedback round with the most promising investors: in most cases, the review process will lead to some substantial (and sometimes radical) changes.


  • Schedule 60-minute calls with three external investors.

Structure of the call with external investors

Send out the teaser to the investor 24 hours ahead of the call (considering you’re in iteration mode, you want to make sure they’re getting the latest version).

The 60 minute call itself can be structured as follows:
Intro: Give thanks, state the goal of the call, ask her to be radically open, explain how you would like to structure the call
Initial question: “Have you already had time to flip through the deck? If so, what are your first thoughts?”
Pitch your case: go through the teaser, answer questions from investor (if any)
Questions, discussion:
- “How likely do you think it is that we’ll get the needed financing with this story?”
- “What makes this case attractive?”
- “What are the biggest concerns you have?”
- Tell the investor the expected pre-money valuation: “Does this seem right?”
- Tell the investor the valuation you’re targeting in 24 months: “Does this seem right?”
- “Are there any additional points we should consider?”
Give thanks, ask her if it’s ok to send her the final deck
Don’t be defensive and don’t argue! Getting negative feedback and being challenged is exactly why you are doing this call. Listen, ask for clarification and for tips on how to improve, and keep your own arguments to a bare minimum.

Block the hour after the call in your agenda, and immediately write down the key learnings and things you want to review or change. Small feedback can be directly integrated into the deck; bigger things will require more thinking and time to elaborate.


  • Sequentially do three one-hour calls with external investors, and improve your story line and deck after each call.

Get feedback from existing investors


After three calls with external investors you should have a good feeling of how “the market” will look at your investment case. The size of the round, the use of proceeds and the valuation should be solid now.

This is the perfect time to approach your existing investors / shareholders. Send them the teaser, together with an email that states the size of the round, including pre-money valuation. Ask them to jump on a 30-minute call to discuss. The agenda should be as follows:
  • Quickly go through the deck, and be euphoric about the upcoming round. Tell them that the first discussion you had with potential new investors was very encouraging.
  • Tell them that the support of existing shareholders will obviously be crucial to make it happen (they already know this but it’s still good to mention it).
  • Ask them whether they would join the round: A “yes” is your clear objective!
  • If yes: tell them that you will send further information ASAP.
  • If no: ask them if there is anything you can do to change this.
There are three potential outcomes of these calls:
Best case
Existing shareholders like your plan, and (provisionally) commit enough financing to do the entire round without any new investors. Fantastic! Considering that they already know your company, you will be super fast: set up a term sheet, and once this is signed go directly to Phase 10 to close the round. 

You could obviously try to increase valuation, or gauge whether you could get in (more) renowned investors at this stage. But you should probably only do this if you are not happy with your current investors, or if you feel that a specific new investor could add massive value.
Worst case
Your existing shareholders are not participating in the round. This endangers the financing round – especially if you have investors with deep pockets among your shareholders: are they not participating because they are unhappy with your performance? Or because you are a difficult person to work with? Maybe because they think the valuation is too high? 

Be prepared to discuss this – or, even better, try to find a way to get a minimum participation from existing shareholders. A personal commitment from the core team can help in such situations as well.
Typical case
In most cases you will get mixed feedback from your existing investors. Some react positively, while others say they will not be able to participate (for whatever reason). 

Frequently they will make their investment dependent on finding great new investors: if a top-tier VC enters, there is a much higher probability that existing investors will want to join as well. In any case, even if you only have “soft commitments”, such a scenario is helpful for you to tell new investors that “existing shareholders will participate in the round as well”.


  • Try to get as many soft commitments from existing investors as possible.

Decide whether you are ready to kick off the round

At the end of this round you should have a good gut feeling about whether it’s going to close: are external investors feeling positive and supporting your valuation? Are existing shareholders supportive, and ready to co-invest?

If this is the case, you should move forward to the next phase. Make sure you have support from your co-founders, executive team and the board of directors: you definitely don’t want to have a discussion with the board at a later phase on whether the valuation should be higher or whether it would have been better to allocate the proceeds differently. Similarly, you don’t want to have a CTO who is boycotting (or unaware of) the process if an investor wants to talk to her before making their final decision.

What should you do if the feedback from external investors is negative and existing shareholders are unwilling to participate? This is the time to take a step back. Before working out a wealth of documents, reaching out to key persons to get intros, and sending out the information to a hundred investors over the coming phases, you want to make sure you’re on track to make this a success. Take the test below to get a “2nd opinion” and discuss internally how to move forward:
  • Is the pre-money valuation we are expecting to reach too high? If so, how much should we reduce it?
  • Is the strategy regarding our future (= use of proceeds) being challenged? Can we reach the targeted value inflection point with less money? Or should we go for another value inflection point, or leave projects we wanted to do by the wayside?
  • Are there any challenges regarding the team or product side? Has the viability of the market been challenged? Do we need more traction?
  • ...
Obviously these are tough questions – especially if you are running out of money (which you most likely will). We have all been there, but believe us when we say that spending time on setting things up correctly before moving ahead is extremely valuable. Thinking that the three external investors and/or your existing shareholders “just don’t get it” is... setting yourself up for failure.


  • Make an internal decision to kick off the round.