Skip to main content

Fundraising: See Investors Early and Often

She said she's spoken to two investors outside of friends and family--informally. That's over the past nine months.

This is her first startup; very smart, lots of experience, strong vision. But that really struck me--only two investors in nine months, and it's time to start raising money.

Fundraising is a sales process. Here are some quick pointers:
  • Get to know as many investors as possible, even if it's too early. 
  • The next time you see them, let them know your progress. 
  • Send a monthly update. 
  • When you're ready, meet with them in person. If you have trouble getting a meeting, shoot for a call, but that's a last resort for me because you lose your primary power of persuasion--holding someone's attention, drawing them in, infecting them with your passion
  • Set a minimum level. I like $25k; if you need $250k the max number of people you have to keep informed is 10, which is manageable. 
  • Ask for the investment. If it's an angel investor ask for double or triple the amount you think they'll invest. They might surprise you and say yes. 
  • Most likely they'll say no, but some will say "I don't think I can do that much", ask them how much they think they can do, and then wait for them to answer. Don't try to fill in the pause--the ball is in their court, and they've indicated indirectly a willingness to invest, just not as much as you asked. 
  • Raise money on a rolling basis, meaning, don't create a deal where you have to wait for all the checks to come in. Structure it so you can deposit checks and get to work, rather than having to aggregate dollars. 
  • If someone doesn't invest, continue to keep them in the loop. Just because they aren't interested now doesn't mean they won't change their minds. 
  • Prepare yourself for no. You will get turned down often. It's ok, you're still a great person with a great idea and the ability to execute. It's part of startup life. Don't look at it as rejection, look at it as filtering the investor pool until you find the right one(s).
  • Have your shit together. Meaning don't go through all of this effort without having your basic deal docs together (convertible note or equity docs), any financials, executive summary, etc. Any one investor might get really excited--enough to bring others on, and you can jeopardize it with a shaky set of stuff, or complete absence thereof. 
That's it for today. Press on, folks

Comments

Popular posts from this blog

Beta Signup

I've been working for quite a while on a new search concept, though the further in I get, the closer the rest of the world gets to what we're doing. So today I'm inviting you to sign up for the rather modest beta, which will be ready soon if we can nail down a few difficult  details. Jawaya is a way of navigating the web and getting better results. And that's as much as I can say right now, because we're not a funded startup, and things are moving really fast in this space--it's going to be very competitive. I predict there will be about 10 funded startups in the next 6 months doing something similar. One of them will be mine, and we aim to make it the best. We're raising a round of capital to fund the team, and are shooting for early sustainability. This is my fifth company; my fourth in the tech space, and my third software company. I think it will be the biggest and can possibly have a positive impact on the world by reducing the amount of time it takes

Where Innovation Happens

As I get closer to a go/no-go decision on a project, I've been thinking about the difference about my vision for the project and the supportive innovations to enable the core innovations The vision combines (in unequal parts) product, core innovation as I imagine it, the application of that core innovation, design, marketing,  developer ecosystem, and business development. The core innovation enables everything else, but it's the application of the innovation that makes it meaningful, useful, and in this case, fun. This week we're testing initial approaches to the implementation for our specific application, and that's where we'll develop the enabling innovations, which is basically where the rubber meets the road. The difference is that the enabling innovation happens at the source of real problems only encountered in the making of something, and in a project like this just getting the essence of it right isn't enough; it also has to be safe, the compone

The Real Jobs Problem

It's the economy, stupid.  Well, yes, it always has been, if you're in the distortion field of politics.  But whose economy? The pundits, the White House, the Republican candidates all miss the mark. They keep talking about debt, taxes, and monetary policy. None of those things tell the real story behind today's economy.  The Old Economy Keynes was right--in the old economy. Economy gets weak, pump some money into the economy through public works projects, which  1) puts people to work, which  2) boosts the economy and  3) generates new tax revenue, while  4) leaving us with another generation of reliable infrastructure to support  5) more growth (for growth's sake, which is another post).  The Beach Ball Imagine a beach ball, partially deflated to represent a recession. Got it? Now imagine the govt pumping that beach ball back up through sensible public investment (which we haven't seen for decades). The New Economy Same beach ball, same pum