Avoiding the Sea of Sameness With Your Investor Outreach Post

It doesn’t just seem like everyone is raising right now, everyone IS raising right now.

Every other conversation I am having with our brand partners is them gearing up or in the process of fundraising and that sentiment is shared by the investors I have been speaking with as well.

Their inboxes are filled with CPG brands looking to bring in working capital so that they can go into 2025 with at least some idea of whether they will have the cash to operate their business with confidence or if they need to start planning alternative paths.

As the conversations continue to pop up they are also simultaneously blending together as many of the brands are coming armed with the same story and metrics as all the other brands currently in line.

Everyone is telling a variation of the same story, which is a big problem and why I decided to focus on the topic today, but first a quick shoutout to our sponsor this week, Vividly.

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It’s a sea of sameness from the investor’s perspective and they are struggling in an already tough market to identify the bets they want to place with many deciding to double down on their current portfolio instead of deploying capital into an unknown.

Growing up around a family of entrepreneurs, there were too contradicting phrases that I heard often.

• Sell to the masses eat with the classes

• There are riches in the niches

I believe they just picked which one they said more based on the business venture they were trying to prove at the moment (confirmation bias was an epidemic in the McCarthy household growing up).

I don’t think in this market you can tell a sell to the masses story, unless you have hit a certain revenue threshold, yes you want to show the arbitrary timeline to $100M in revenue, but the pathway to get there needs to be unique and the flashes of your business that differentiate your brand, team, and product need to be the cornerstone of your story.

Right now, what I am seeing from brands that are currently raising and in risk of floating in this sea of sameness is the following:

• Annual revenue between $1-6M

If you have crossed the $10M chasm you can probably tell a robust growth story and use a more conventional playbook and pitch for your raise.

• Prioritizing profitability

Everyone was told to prioritize profitability this year and that if you did so, you would be rewarded. The issue is that many brands did this at the cost of growth and that all brands mostly followed this advice who planned to raise this year. So although you did the right thing and the healthy thing for your business, that story, which would have been unique in years prior, this year, gets lost because it's a similar story to everyone else who is asking for money.

• Needing funding to support retail expansion

This might seem like a “no duh” bullet point, but most conversations I am having are around the need to raise to support retailer X who has shown interest and wants to bring in our product. Commitments from large retailers can be positioned as trump cards, but again most of the competent brands that are raising have retailer interest.

So these bullets leave you with a story that sounds like; We have $3M in revenue, we have spent the last year prioritizing profitability or we could have grown more, and we have future commitments from X retailers, we just need the capital to support them and add to the team.

This pitch is just not converting right now at a high enough percentage as investors continue to be conservative in their approach.

Instead, I implore brands to embrace the niches and unique aspects of your business to tell a growth story that at least is different from the others.

If your product attributes are the key differentiator, lean into that and have the deck read more like a buyer deck than an investor deck.

I recently had a high protein brand that had similar metrics to every other brand which I forwarded to an investor, but due to how much further ahead they were than the competition from a protein standpoint it resonated and the investor’s interest was palpable.

If you’re seeing an alternative sales channel explode for you, lean into that. Maybe food service is performing well or gifting in a way that it’s not for the competition. Showing investors that although your numbers are comparable to the last brand deck they reviewed, you're looking at growth tactics differently than that company, which is a powerful distinction.

When in doubt, turn to your customers. Figure out a way to show the passion your brand elicits from your audience. Include UGC and consumer testimonials in your deck and outreach to make the FOMO palpable.

Show the community you are building and how although the competition might be further ahead, your community is engaged and established for sustainable growth, if you just had the capital to be available where those audiences exist.

FOMO is the name of the game here. You want the investor to feel excited about the thing that your brand has unearthed that the competition hasn’t and then show a clear way to scale that advantage.

My message here is to try and think outside the box when it comes to your outreach and story to stand out from the very crowded playing field that you might find yourself in at this moment.

My last call out here is that personalization is key right now.

Your outreach and material has to be curated to the investor your pitching. You can’t copy and paste your way to being oversubscribed in this market, so be sure to come across like you care about the person behind the check and then lean deeply into why that person should care about what makes your business different.

I hope this helps everyone on their fundraising journey and please don’t forget to sign up for our investor roundtable on 9/30: https://lnkd.in/egN655q5.