What are your top tips or lessons for raising funding?
- Don’t take it unless you need it
- You won’t know you need it until you map out how you’re going to spend every single dollar raised.
- To map out how you’re going to spend every dollar raised, you need to hunker down and, yes, write a business plan. Get friends, mentors, other entrepreneurs to edit it and punch holes in it before you think about approaching an investor.
- More important than how cool your company is: investors want to know how they’re going to make money from you. Spend the first 25% of your pitch on your company, the rest on how it’s going to generate a solid return for them.
- If any of these points rub you the wrong way, you’re probably building a lifestyle business, not a venture-backed business.
- Raising money is a full-time job, and takes at least six months. Don’t sacrifice your company’s growth for the chase.
- Philosophically treat any funds raised as debt, even if it’s an equity raise. It’ll help reduce impulse buys and focus your spending on customer acquisition.
Tell us a story about how you incorporated fun or celebration into fundraising.
We treated VC calls as “collecting our no’s.” Instead of putting all our eggs in one basket, or treating each VC pitch meeting like Christmas Mass, we focused on the vision, but changed the message in each meeting. Sort of like a comedian tests new material. Ultimately, you land on a very tight, cohesive message, but it never starts that way. It starts with a lot of rooms filled with crickets. By taking each meeting less seriously, it makes the process more fun, and you realize a rejection isn’t an invalidation of your idea.
What are your top tips for managing and keeping in touch with your investors?
Stay as high-level as possible. A monthly email update with five or ten bullet points is all that’s necessary.
Instead of focusing on product/service updates, focus on initiatives you’re working on and the end-result they translate to. Investors care about the long-view, not that you just added Google+ support.