/How to impress your VC investors before the next fundraising round – Business Insider

How to impress your VC investors before the next fundraising round – Business Insider

  • Raising venture capital for a startup is no cakewalk. So it’s noteworthy that startup Winnie got an offer from an investor wanting to lead its Series A before it started fundraising.
  • Winnie, which helps parents find local daycare and preschool, raised $9 million in a round led by VC firm Rethink Impact.
  • Winnie CEO Sara Mauskopf said the company did several things right: They sent short, monthly updates with key metrics to their investors. Those reports showed impressive growth rates.
  • Visit Business Insider’s homepage for more stories.

Fundraising was not on Winnie CEO Sara Mauskopf’s mind when one of her investors asked what she could do with millions more.

It had been about a year since Winnie, a startup that helps parents find childcare near them, had last raised venture capital funding.

The company’s investors liked what they saw.

“Rethink Impact was a small investor in our previous seed round,” Mauskopf said. “They have seen our traction and have been, obviously, watching us very closely and getting our monthly investor updates. They were like, ‘We want to lead your Series A.'”

In October, Winnie raised $9 million in a Series A round of financing led by previous investor Rethink Impact, a boutique venture capital firm that focuses on women-led companies, with participation from Reach Capital, Ludlow Ventures, Day One Ventures, and others.

We asked Mauskopf, who completed the fundraise while pregnant with her third child, what she thinks the company did right.

Transparency is critical

Mauskopf said she and her cofounder, Anne Halsall, send monthly updates to their investors — everyone from institutional firms to angels like April Underwood, Slack’s former chief product officer. The reports include monthly revenue, monthly active users, and monthly unique users seeking childcare, a group that’s most likely to create business for the paying childcare providers on the service.

These updates make good business sense.

“We don’t provide investor updates with the intent to (pitch) our fundraise. But when you’re providing investor updates and the business is going well, they are a great audience,” Mauskopf said.

Jenny Abramson rethink impact

Jenny Abramson is an investor in Winnie.
Rethink Impact

Jenny Abramson, founder and managing partner of Rethink Impact, said a well-informed investor is a better decision-maker.

“It’s always a good thing to be as transparent as possible with your investors,” Abramson said. “One, it shows a level of confidence in what you’re doing and a comfort in sharing. Two, investors are often incredibly busy and looking at lots of deals at once.

“So when you keep them posted along the way and (are) educating them about your business as you evolve, they’re in such a better position when it does come time to raise money. Yes, they’ll do diligence (on the deal), but they’ll do it from a place of knowledge.”

Transparency is great. But how do the numbers look?

Abramson said her firm initiated the company’s next round round of financing because of the numbers shared in those investor updates.

Here are some recent metrics Winnie reported:

  • Over the last year, the number of cities that Winnie has compiled data for has increased from 500 to 7,000 cities nationwide.
  • Its database lists 150,000 daycares and preschools, up from 75,000 licensed childcare facilities in 2018.
  • Users are growing 15% month over month.

Winnie Deck   Business Insider   final (1) page 011

A screenshot from the company’s seed-stage pitch deck charts the impressive user growth. Winnie has reached more than four million users to date.


“It was through those regular updates, combined with us having a better sense (of the business) and being able to be more helpful, that we started to realize and have conversations with Sara about, sort of, what would you do if you could have more money? Could you put the gas on this?” Abramson said. “… It could unlock a lot of opportunity.”

Keep it short

The investor updates are only effective when they’re read. Mauskopf said her emails are brief and bulleted to make them easy to digest.

“Anything that is going to require an investor to do extra work is a bad idea,” she said. “If it requires an extra click or download, don’t do it.”

Her other hack is to put asks for advice or an introduction at the top, so that “if they look at nothing else, they can at least help me.”

Correction: An earlier version of this story misstated the name of Rethink Impact.

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