I've been asked a lot about my fundraising experience. With the latest e-mail, I figured a blog post would be a productive answer, by making it available to all.
In no particular order, here are five quick thoughts about fundraising I usually share:
No one will, nor should they, give you money if you don't have complete self-confidence in your own idea. If you don't have it, then I hope you are a good actor. I hope you've quit your day job to show whomever you asking to fund your endeavor that you are 100% committed and fully serious about this.
Two. Target the Right People
There are hundreds of investors out there. More than 700 venture fund firms are in the United States, plus thousands of individual angels. Most of them have no sense of whatever you are working on, fund at a different stage (e.g. late-stage versus see), have a geographic focus, have a sector focus, aren't serious, are out of capital, etc., etc., etc. You could waste your life talking to the wrong people. Much like with romance, you don't need a bunch of partners, you have to rapidly find the right partner.
Three. Keep Track of it All
You don't need a CRM, although I did recently hear of a startup that is selling a CRM for startups to keep track of fundraising. You need a spreadsheet to note who you met, what they said, what the next step is, etc. The meetings will become an absolute blur without this.
Four. Find a Lead
Most investors are lemmings. Very few have the courage of conviction that you must have as an entrepreneur. They will not lead your round. They will tell you they are interested and then ask who is in. You must find that first person who is in. Don't waste time on the followers, until you have a leader.
Five. He's Just Not That Into You
There are a few apocryphal stories of the entrepreneur who hounded a venture capitalist over and over and over until the VC finally said yes. Assume that is an extreme exception. Most VCs don't like to say "no" just in case you're the next Facebook or Uber (see #4 above). They will just string you along. The ones who will say "yes" will make it very clear very fast. After a meeting you should send a thank you. After a meeting you should follow-up at least once. Don't hound them. They're just not that into you. Plus, (again like in romance), if you follow-up too soon, you come off desperate, which is not good for your fundraising.
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