4 Fundraising Lessons From Being A Founder/Investor.
Raising ~$6.5M between 2 startups/studio and investing ~$10M through funds/personally gives you an interesting perspective on the venture capital game.
I’ve pitched ~300 funds for my startups and heard ~250 pitches from founders over ~13yrs in tech. And I’ve helped founders/startups raise ~$50M.
I was looking through my notes from every single investor pitch I have done (yes I still have those) and notes from the founder pitches/decks that I’ve helped founders with (yes I kept those too :) ) and 4 glaring things stood out for me.
If you find yourself ‘convincing’ an investor you’re already wasting your/their time: the angle investors/VCs/funds that ended up investing in my companies and (in those I helped) did not need to be convinced about the startup opportunity. The funds/VCs that will invest in your startup are already believers in something when you show up. They either believe in you, your team or the market opportunity and are just gathering data to confirm an investment decision they’ve made or are pretty close to making.
Fundraising is purely a matchmaking game, remove the emotion till you find your match: there was a particular funds that I was 100% certain would be great for Varuna but, after pitching or meeting them several times (and trying to convince them), I realized that this wasn’t going to work. They didn’t want to invest and I was salty about their reticence :). On the flip side, a female investor committed to invest a substantial amount after a 30-min walk in Greenpoint. First meeting and we talked about everything but the startup. She’s been a great investor! It’s been the same being on the investing side.
For fundraising (as a fund or as a founder), your process is almost as important as your pitch: it’s a grueling process to fundraise. You have to show up every single time and channel the excitement or positivity you feel about the opportunity you’re presenting. By the time you’re doing it for the 76th time in 6 weeks it is going to be tough to rely on emotion. The process is what will see you through to the 143rd pitch. And it might be that pitch that gets you the money. Your process will provide your internal champion at the fund with the kindle to get a commitment from the fund.
Because it’s a matchmaking game, it’s ok to get an introduction to another investor from a fund that chooses to pass on you. Not every investor is a fit. From my ~300 pitches math, it’s a 1-10% chance any investor you meet will invest in you. But it’s a 100% chance that investor knows someone else you should talk to. You’re trying to find a match.
One last one, I once blew off a meeting with an angel investor because his home page was a janky Squarespace landing page. The meeting would have been #4 in my process (I kept a note remember). After ~40 unsuccessful pitches I circled back with him and met him in his crazy swanky office. He ended up investing $300k after just two conversations. You just never know. You just need to keep showing up.
And it’s also ok to decide that you’d rather spend those 300 meetings with prospective customers and raise funding (revenue) from your customers. Just show up.