Many of us have stayed in an Airbnb, even as recently as in the past year, but did you know it was a top example of an investment-ready company when it first got funded?
Now a $72 billion public company, Airbnb is known for having one of the best pitch decks of all time going back to 2009 when it raised its first outside capital. (Lots more on that here.)
There’s a huge market around making a great pitch deck through clarity, simplicity and great graphics, but what made Airbnb’s pitch great was how simply, authentically and accurately it captured the strength of the business itself.
You know you are investment-ready when investors/funders respond to your project/company offering and fund it.
Airbnb as a business was investment-ready, and its pitch deck captured it well.
Investment-ready is when all of the components of your business are solid, your pitch materials reflect that and your offering meets the requirements of your target funder.
It’s not an easy task to be investment-ready.
You wouldn't know that from the media, which too often makes the funding journey look easy. They write a great deal about founders who have easy access to capital, not always emphasizing what a high bar most founders need to meet for investment. They also write things like “the most important criteria for investment is the quality of the founders,” deemphasizing how many other elements also need to be in place to get funded.
We have recently identified fifteen (15) elements that determine investment-readiness across these four topics:
Is this a compelling business?
Can you capture a share of the market opportunity?
Does the business model work?
Is the investment offering designed to work?
Accelerators are structured to run through the process from idea stage through pitch stage to investors. But you can nail 90% of the elements and still not get funded.
The very best accelerators push founders to get all the way to investment-ready. Urban legend has it that the mentor assigned to the Airbnb founders in Y Combinator (a premier accelerator) advised them to go to their hosts in New York and help them. They realized hosts needed to make their listings more attractive, and they bought a good camera and helped improve their postings.
In many ways, you have to demonstrate you are ready to operate at the next level to get funded at your current level. Increasingly funders are assessing founders’ milestones as intently as their plans and projections. They are looking to see if founders clearly understand what they need to do to show that invested money will demonstrate tangible progress.
This journey never ends. Brian Chesky, founder and CEO of Airbnb, is living in Airbnbs full time in 2022 to sharpen his company's strategy and results. For him, getting funded has earned him the right to do it all again and again to get to the next level.
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