In the words of AngelList Founder Naval Ravikant, “It’s never been easier to start a company. It’s never been harder to build one”. The competition for capital and talent is greater than ever. On top of building a great business, obtaining capital to grow your business is tough enough. From countless cold emails, meetings, and rejections fundraising is a long, often daunting, task. While most founders don’t have the fortune to 100% focus on fundraising, creating a simple and efficient process can be the difference between a successful or failed raise.
We’ve laid out 3 tips below to help simplify the fundraising process so you can stay focused on your day-to-day:
Do Your Homework Before Reaching Out
Before you send an email to a perspective investor make sure you’ve done your research. There is no reason to spend time on an email or sitting in a meeting with an investor and find out after the fact that they’re not a good fit. Mark Suster, Managing Partner at Upfront Ventures, suggest building a list of 40 qualified investors before firing off your first email. Use tools like Crunchbase and AngelList to easily put together a list of qualified investors based on their location, industry focus, stage focus, portfolio companies, and deal velocity.
Track Your Interactions
During the fundraising process theres a good chance you’ll talk to 100+ different investors. Its easy for conversations and notes to get lost in the shuffle. Just as you would jot down notes and the information for a sales process in your CRM the same should be said while fundraising. We suggest creating a simple Google Sheet tracking the investors you’ve spoken with, information shared, and relevant notes/recordings/etc. If necessary, share the sheet with your co-founders to gage the team’s sentiment towards different investors and meetings. This will come in handy when its time to fundraise down the road and need to pull on previous conversations.
Go to Existing Funders First
If you have already have investors you will want to start here. If you’ve kept your investors in the loop, a request for a meeting should be an easy string to pull. As Jason Calacanis puts it, “There is another really awesome reason to keep investors updated: they didn’t give you all of their money — they have more! They want to give you more! If you keep your investors engaged with honest updates they will reward you by participating in future rounds”. If for whatever reason your investors are not going to fund a future round they will be able to make intros to other, already qualified, investors as well.