If you run a startup, you know fundraising can be such a grueling task, especially if you’re just starting.
For investors to become ready to talk terms with you, it is a whole long process as you will have to build and maintain a relationship with them. This will have to start with an email, which will lead to a call and then, to a meeting.
It is very unlikely that your first meeting will lead to a term sheet. A lot needs to happen between your first call or meeting and ultimately wiring funds.
The fundraising journey is never a smooth one. Therefore, keep in mind that there are multiple decision-makers along the way. Also, remember to spend most of your time with the key decision-makers.
Have it in mind that, it is not unusual to see that your lead goes cold on you after staying in touch for weeks or months. Just make sure you find another way to get them back into the loop.
Raising funds for your startup
Here are 5 tips you can use to improve your chances of securing some funds for your startup.
Treat fundraising like sales
A sales funnel needs to be managed and nurtured properly. If you consider fundraising as a sales funnel, then you need to keep feeding the top of the funnel with a lot of investors meeting to increase the probability of some of them eventually converting into writing you a cheque.
Target the right investors
Do your research to figure out who would be the right investor for you, taking into consideration the stage of your company. Some investors will clearly state the stage they invest in. So it makes sense to always focus on those investors who are interested in investing in businesses of your stage.
Don’t spend too much time pursuing investors who do late-stage growth rounds, when you are raising your seed or series A round.
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Nevertheless, it is important to get in touch with them to get their feedback and nurture them with updates of your company’s growth to eventually get them to participate in your next round. Therefore, prioritize your time finding and connecting with strong lead investors for your round.
Also Read: COVID-19 Comes with Remote Deals, Fewer Deals for VCs
Flaunt your confidence
Prove to your investors that you are confident and know what you are talking about each time a question is posted to you.
Investors love it when you have already thought about the questions and concerns that they have.
To achieve this uniqueness in your response, build a document for Frequency Asked Questions (FAQ) where you can put concise answers for anyone who asks the same question, instead of winging an answer on the fly and probably putting yourself at risk of saying different answers.
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Learn from feedback
Have it in mind that you will be meeting a lot of investors and as such, you’ll constantly be getting feedback. It’s always important to learn from the feedback you receive from investors and improve your business and pitch deck.
Prepare to be ghosted
Not all investors will be kind enough to give you an affirmative “NO” for an answer which might help you move on and spend your time and effort going after others.
But most investors instead of replying will just ghost you. Be ready when they say “NO.”
The goal of your company is not to raise funds. Funds are just to build a sustainable business that solves a problem. So don’t get distracted. Get back to work and improve the solution you’re building. Once an investor sees what you’re doing, getting that cheque from them becomes a whole lot easier.
I can’t say for sure that these tips will get any investor to invest in your startup. What I can tell you for sure is, practicing these tips to the best of your abilities gets you a series of steps closer to pulling cash from an investor’s pocket.
