I feel pretty lucky to have gone through the experience of fundraising in Silicon Valley. I got to meet a lot of incredibly smart people and I'm especially grateful to the people who gave me advice and challenged me.
There are a lot of resources out there about how to create a business plan and a pitch deck, so I don't want to reproduce that here. Instead, I'm sharing some of my takeaways from the experience of fundraising, plus some good advice I got along the way.
- If you're an early stage startup, don't go out asking people for money before you've put some serious thought into whether you can achieve your objectives with your own money or hard work. Push yourself on this one and get creative.
- If you decide to ask for money, ask for the minimum you need to responsibly hit the targets. This one may sound conservative at first, but if you can execute on a great idea there's a good chance you'll get rapid growth. Efficiency does not equal slow growth. It fuels it.
- Connections help a lot. They help you get a foot in the door and many pitches start out with five or ten minutes just talking about shared connections.
- If anyone ever asks you what they can do to help, always ask for introductions. Keep a list of people or types of people (investors, customers, hiring candidates) in your back pocket, so you can be specific around the ask.
- Get your deck in front of smart, experienced people from different backgrounds (product, finance, etc). Work in their feedback.
- Most startups seem to do around forty to fifty pitches before they get a "yes."
- "Yes" is the hardest answer to get. The second hardest answer to get is "no."
- Stay organized. Keep a list of your target investors, meetings and outcomes, or use a basic CRM.
- Credibility is everything.
- Know your numbers.
- Know their numbers. Get really familiar with the acronyms and startup financing lingo. Learn to speak the language of investors.
- Study the process of fundraising so you know what to expect as far as next steps.
- Study the investors you want to pitch. Get to know how they invest. Check their portfolio for competitive investments.
- Hockey stick results are really exciting. That one's kind of obvious.
- Keep showing momentum.
- Know your best customers and why they're your best customers. Make sure you speak with these people frequently enough that if you need to use them as a reference, they'll be quick to respond.
- Know your competition. Be able to explain how their approach compares to yours.
- Not having any competition is bad. You're always up against someone fairly directly or disrupting someone else.
- Simplify everything. From your elevator pitch to your technology choices and business plan. Make it all very easy to parse and straightforward.
- If you're a woman, people will sometimes comment on that in a supportive way.
- They're looking at you to figure out if you'll be a good leader, so act like one and make sure your leadership is the undercurrent to the whole pitch.
- Show them how qualified and committed your team is. And bring your CTO if you're in tech.
- Stay in touch with everyone you've pitched, throughout the fundraising. Let them know how you're progressing.
- Take as much good advice as you can get. It's worth its weight in gold and if people are interested in what you're doing they often have a lot of advice.
- Be yourself. Ultimately you're asking people to invest in you.