Rayn Ong has a presence unlike many others in the Australian startup ecosystem. An active angel investor since 2014, he has made over 100 investments, including in the seed rounds of Instaclustr, Propeller Aero, HappyCo, Morse Micro, and Eucalyptus. Each have realised valuations of over $100 million or more now.

Recently debuted on the AFR Young Rich List as an angel investor in 2022, Rayn spends his day-to-day as partner at early-stage VC fund Archangel Ventures. Garry Williams sat down with him for VC Catalyst‘s Vision to Venture: The Power Of Storytelling and heard how vital it is for founders to generate belief and conviction in the investors they seek as capital partners.

GW: What does your investment focused day-to-day look like currently, Rayn?

RO: As a Venture Fund Manager, our KPI is to generate a good return for our investors.
Building big companies takes a long time, and realising value is made harder by chasing shorter-term fads.

So, we focus on long-term value creation, especially to meet those obligations to our investors. The questions we would ask ourselves would usually sound something like:

  • ‘Can we see the real value to paying customers?’
  • ‘Can this product save time and money?’
  • ‘Can this make more money?’
  • ‘Can this reduce risk?’
  • ‘Will this team stand the test of time and competition?’
  • ‘Do we believe we can 10-100x our investment?’

GW: A vital part of VC Catalyst is generating an investment thesis to guide future investment decision-making process. As a practicing investor leaning on that investment thesis during the founder pitch process, what has founder storytelling done right for you?

RO: After the first meeting:

  • I understand what the team is trying to solve
  • I understand the enormous value and opportunity for the customer
  • I believe this company will make money
  • I believe I also will make money
  • I believe other investors will move fast to invest, so I have a sense of urgency to win the deal

GW: What about the pitch process itself? In terms of captivating investors’ attention (especially your own)?

RO: As investors come in all shapes and sizes, there’s obviously no perfect template to win everyone over, so there is no definitive right or wrong.

However, the founder/ founding team must understand in advance what kind of investor they are pitching to, tailor their pitch to them, and use the most concise language to get that message across.

Some useful advice from Rayn Ong for founders as they engage with investors:

  • Qualify the investors first
  • Make sure they get it. The problem and the solution.
  • Create a sense of urgency.
  • Be organised and ready to move down the funnel ASAP so that you don’t lose momentum
  • This means: Pitch Deck > Q&A > Meeting > Due Diligence > Investment Committee > Docs > $$$ in the bank

GW: When we talk about that pitch process, what are you specifically looking to understand Rayn?

RO: Some Investors want to know about upside potential, while some focus on downside protection. Some focus on product features, whilst others emphasise market potential. And then, some focus on financial modelling, whilst others look towards acquisition channels.

But in the end, the team is what’s most important. That’s what I’m looking at, as it will eventually always come down to the execution, including how they pitch.

GW: What should founders not do when seeking to grab that investor’s attention and progress this conversation?

RO: Forgetting to visualise the pot of gold at the end of the rainbow. That is my KPI.

GW: Anything further to add when we hone in on the importance of storytelling in the founder/investor dynamic?

RO: The Wiggles once said: “kids are the most honest audience. If you are not interesting, they will get distracted immediately.”

Investors are very busy people with short attention spans in general.

Founders need to establish that this decision has the high potential to be a career-defining investment for those investors within the first 10 minutes. If the founders can communicate the message with one word, they shouldn’t use six paragraphs.

If the investor can’t repeat the founders’ pitch back to them, then they didn’t pitch.

“This is very important to remember, as investors usually need to describe this opportunity internally to their investment committee members to arrive at a favourable vote. So, the story is very important from the first interaction and continues to be told throughout that process.”