10 Tips for Pitching Justice Tech to Investors
Having recently raised an $8M Series A for Paladin, I’m often asked by other justice tech founders how to approach fundraising. Especially as a new category that often serves low income folks, justice tech can be confusing to investors who aren’t familiar with the market opportunity. Isha Marathe of LegalTech News published a great article last month about a few key approaches, and I wanted to expand on the top 10 tips that helped us secure justice tech funding from world class investors:
- Research well-aligned investors: Having the right investor target list is key to saving time and energy. Find impact-focused funds like AmFam, the Sorenson Institute, and Stand Together to pitch who have experience in justice related issues.
- Make the problem you’re solving relatable: Investors invest in concepts and founders that feel familiar, and oftentimes don’t connect with the legal problems that low-income individuals are facing. It’s important to make the problem that you’re solving relatable to your audience (which requires research ahead of time!).
- Highlight the enormity of the justice gap: The question all VCs will ask is ‘how big can this get?’ Be able to articulate the magnitude of the justice-related problem you’re solving in terms of market size, and have a step-by-step plan to capture it.
- Know your business model cold. At the end of the day, investing is about producing financial returns. Be sure to highlight how your business model can do well by doing good!
- Show market validation. Regardless of whether you have revenue, demonstrating a willingness to pay or use your product is important market validation. Pilot clients, beta testers, LOIs, or a growing waitlist can all indicate that users are interested in your product. Chart that progress over time.
- Play up your team’s expertise: Investors need to know why you’re the right team to solve this problem, and having a mix of legal/business/technical expertise is key to scaling on all fronts.
- Address opportunities within and beyond legal: Legal is notorious for being a difficult market to break into, and some consider it a small one. If your product has applications in addition to increasing access to justice, whether within legal or outside of it, be sure to share them.
- Talk comps: Since justice tech is a new category, having comparable companies against which to compare your raise, like LegalZoom, RocketLawyer, or DoNotPay on the B2C side, or Paladin on the B2B side, can be helpful social proofs.
- Ask for feedback and referrals: We were told that ‘justice tech’ wasn’t a thesis area for many funds (of course not — it’s so new!), however, they might have referrals of folks who could be a good fit. Investors will always have general feedback that you can aggregate and incorporate.
- Send updates! Sometimes the timing or stage just isn’t right, unrelated to the business. Keep well-aligned investors up to date on your progress and traction to encourage engagement for future investment.
Have other advice? Reach out at firstname.lastname@example.org and I’ll be sure to share with others.