Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Raising a fund is hard. Aside from sales, this is one of the hardest things to do in a startup.
Here are a few points to remember in your fundraise:
- Build relationships first and find investors second.
- Divide your raise into tranches and give yourself a reasonable timeline for each tranche.
- Investors will critique the business. Consider your business as an operational machine with the investor showing how to make it better.
- Perform as much diligence on the investor as they are performing on you.
- Investors follow a common funding strategy and will run in a herd-like manner. Get a sense of which way it is going with your deal and adjust your approach.
- Just as you tailor the sale to the customer, so tailor your pitch to the investor. For example, do they appreciate impact deals? Do they want to see strong traction? -- adjust accordingly.
- Start meetings with those you know and can give you real feedback as this will be useful later with other investors.
- If your deal is complex or in an unknown sector, then use analogies to help them understand the value of your deal.
It’s a process -- for every 10 prospects you’ll get 8 “Nos”, 1 maybe, and eventually 1 “Yes”.
Keep going ‘til the money is in the bank.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
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