Increase a series B for any startup is currently a challenge, with many VCs pulling back on investments – funding for Series B rounds across all sectors fell 55% in August compared to, for example, a year earlier.
But raising a Series B for a hardware startup can be even harder. It’s just always been harder to get venture capitalists to fund a robotics project compared to a software-only venture, given robotics’ high capital requirements and greater risk.
However, the uphill climb can become much easier if a robotics startup can present a solid business model, measurable metrics and a plan for the next 18 months. As an investor in AI and automation companies for over 20 years, I have supported dozens of robotics companies and remain optimistic about the space.
You need to show that customers are getting real value from your robots — saving time, money, or both.
Here are several strategies founders can use to prepare their robotics businesses for a successful Series B.
Show how your robot works
Robots are visual by nature (can anyone forget that?) video of Boston Dynamics robots dancing?) So when you’re pitching VCs at your automation company, it pays to showcase your robots in action.
If your robots are large installations in warehouses or on production lines, invite VCs to see them at work. If they are small enough to transport, take them to the pitch meeting. And always have high-quality video to share on a computer or tablet during in-person pitches or online for virtual meetings. Seeing your product in action is critical to getting investors excited.
Show customer ROI