The Fundraising Mindset

Fundraising is not easy. It is one of the most frustrating and time draining activities you as a founder will have to do as part of your company’s growth strategy. Unless you are really lucky and investors come to you, it will likely involve taking many meetings with investors of all kinds, both good and bad before you ultimately succeed in finding someone who believes in you.

(Photo: Mario Poje)
Fundraising is like dating, as funny as it may seem. (Photo: Mario Poje)

You will likely meet many types of investors along the process of fundraising, including:

  • Investors that doubt you as a founder/ceo, and your capabilities to execute.
  • Investors that are just meeting with you because they want to invest in your competitor.
  • Investors that don’t have the money to invest but want to be seen to be active by the ecosystem.
  • Investors that will want every inch of detail about what you will be doing for the next 5 years, when you both know your projections will be speculative at best and hogwash at worst.
  • Investors that don’t get what you do at all, but will have an opinion about your product because their child or spouse has a view on what you do.
  • Investors that are amazing and give you insanely relevant advice, but unfortunately say you aren’t far along enough traction-wise for their fund’s investment focus.
  • Investors that provide you with great feedback and would help you greatly if they were involved, but will only invest if someone else leads the round.

…And then… there is the one investor who ultimately believes in you and backs you. That’s all it takes. Just one.

The earlier the stage your company is in, the more that successful fundraising is about personal human connections and story telling. At the early stages of your business, as much as some investors will want to know your projected numbers (revenues, traction, etc), because there is so little to go on, it will always come back to your inherent abilities and vision as a founder. As such, fundraising meetings are mostly the way that founders can assess investors for value-add to their startup, but also for investors to see if they can work with the founders and to see how they think.
Because of this mutual assessment by both founders and investors during fundraising meetings, an analogy that people use frequently to describe the fundraising process is that of dating. As funny as it may seem, I do think the comparison works well…

Dating and fundraising

For example, in dating (as with fundraising):

  • You have to be willing to put yourself out there to meet anyone in the first place.
  • It’s a numbers game: you have to meet many people, this can be at in-person at networking events, parties, or online.
  • Connections usually happen in the least likely of places and are strongest when they come through a trusted 3rd party.
  • Being a good story teller gets people to laugh, open up, and remember you.
  • Chemistry matters.
  • Sometimes its just plain luck: being at the right place at the right time.
  • The better you prepare yourself, the better your odds get.
  • Being too eager to get back to someone or waiting too long can end things prematurely.
  • You have to go on several dates with several people before you ultimately feel someone is the right one for you.

Therefore, the fundraising mindset is really about four core things:

  1. Understanding that fundraising is a process and that it will take time. Only a very few are lucky to have it be quick and painless. 
  2. You have to embrace rejection as part of the process and not take it as a personal rejection.
  3. Treat every meeting as a form of practice that is merely making you better for the next meeting, rather than putting the full importance of any one meeting on your shoulders and beating yourself up if it goes badly.
  4. Analysing what was said during your meetings and learning how to improve on your mistakes is the most crucial aspect of reducing the time it takes until you find the right investor.

As you will likely never know where, when and how you will meet your future investor… as you go through this process, just remind yourself: Good news, Bad news – you never know…

Comments

Leave a Reply

Your email address will not be published.

Popular

Startups

John Biggs at TechCrunch Balkans in Sofia: There is a Way Out of This Media Black Hole!

The first TechCrunch Balkans meetup in Sofia begun with a loud whistle from Dilyan Dimitrov, founder of the Bulgarian accelerator Eleven, the host of this event. It was startup time! That is right, TechCrunch Balkans, organized by Netocratic, is being held throughout this week – we will have lectures, panels and the most important thing – pitches in front of John Biggs!

Startups

Combine Technical And Marketing Knowledge Within Your Startup Team

You've probably heard about Bellabeat, FlyKly, or Layer? Well, three years ago they didn't exist! Now they are at the top of their industries, but how did they do it? Was it enough only to have the right idea or did they also need to have knowledge to conduct business in today’s competitive environment? Specifically, what kind of knowledge do startups need to succeed and not repeat the many mistakes of the 90% of startups that fail?

Startups

Slovenian ‘Booze’ Startup Flaviar Raises 400.000 $ from Speedinvest!

Slovene-British startup Flaviar announced today that it raised a seed round of 400k $ from American fund Speedinvest. This one year old company ships monthly tasting packs of 5 sample spirits (whisky, rum, gin, vodka, etc.) to their members, each month with a different theme.

What you missed

Enterprise

6 Important Areas Often Overlooked by Product Leaders

Attending Product Management Festival 2017 (PMF 2017) in Zurich, Switzerland, and meeting amazing product professionals inspired me to go deeper into six important areas that are often neglected or entirely overlooked by product leaders.

Enterprise

The Latest Mind Innovations in Product Management

Announcing the 2-day conference showcasing top notch topics in product management.

Startups

US Outbrain acquires Slovenian Zemanta

At their 10th anniversary, the Slovenian high-tech company Zemanta d.o.o. announced that it was entirely acquired by Outbrain from the US, the world’s largest premium content discovery platform. The sum that Outbrain paid for Zemanta’s technology, products and team remains a business secret, and Zemanta’s co-founders Andraž Tori and Boštjan Špetič will join Outbrain. After becoming part of Outbrain Zemanta’s platform will continue to operate as a standalone product.

Tech

‘Fintech’ companies currently ought to buckle down and do what they do best – write code

Novathon #withPBZ is getting closer. This 24 hour-long brainstorming, coding and design event will attract designers, developers, students and others interested in creating a banking app, and the winning team will go home with as much as €10,000. Besides the mentors, the teams will be motivated by the financial expert Chris Skinner, to whom we had the opportunity to talk about the state of the financial technology industry.

Mobile

Scaling Agile with Peter Brussard, Rosetta Stone

At the beginning of June, at Shift Developer Conference in Split, Croatia, Peter Brussard, Senior Vice President of Product at Rosetta Stone, Inc. shared professional insights about successful implications of lean agile development and elements at a global enterprise scale.

Startups

Frame Raises $16 Million in Series A – Microsoft Ventures Among Investors

Frame, a US-Serbian company, has secured $16 million of funding. Among the investors is also Microsoft Ventures – the investment branch of one of the biggest technology companies nowadays. With its teams in San Francisco, Belgrade and Niš, Frame is going to use the money for employment of software engineers as well as sales and marketing expansion – particularly in Europe and Asia, as revealed for Netokracija exclusively.