Fundraising is an integral part of startup life — although not the most exciting part of making one’s dreams come true, it can still be fun. On the surface, fundraising looks and feels rigid and impersonal, but once you peel back the onion, you will find that to be far from the truth.
Like everything else in life, raising money is relationship based and both parties involved benefit by demonstrating empathy, value and openness. We closed our first round of funding a year ago and it took us a couple of months to go through the process. Here are the most important lessons we learned:
1. Make fundraising a form of mentorship.
You have a chance to discuss your idea with bright professionals who likely have more experience in your field than you do, so ask purposeful questions. Challenge yourself by identifying areas of your business that you know need improvement while also being open to constructive criticism in areas you might think are solid. When an investor offers to spend more time on your business plan, grab a coffee together to discuss your marketing strategy. Anyone willing to try and give feedback on your product is a potential mentor, so now it’s your turn to transform those one-time meetings into fruitful relationships. We were lucky to meet some of our mentors through programs we participated in such as SilverTech Ventures (we are part of their current cohort) and Startup Bootcamp, while others we met via networking and business meetings hufforbes.com.
2. Seek investors who believe in you.
You are more likely to find someone willing to help if they believe in you and what you are doing. Those who are passionate about your vision will be the best investors for your company and will also serve as organic brand ambassadors. Their willingness to help you grow through connections, research and advice will come naturally. Many investors have intentions to lend a hand but those who are truly touched by what you are doing will open their contact list and make introductions as if they were pushing their own idea. While you have the attention of an investor like this, ask them to share your work with others who will want to learn about the business, try the product or share feedback strongarticle.com.
3. Experiment with your pitch.
We learned that the best way to get the most valuable feedback and appropriate mentoring is to constantly A/B test the company’s pitch while fundraising. Keep honing your elevator pitch, five-minute presentation, two-minute investor speed-dating spiel and one-hour meeting. Perform these in different settings with new ways of delivering a similar message. For example, be ready to present in both a noisy coffee place and a conference room with a view of the Empire State Building. And consider your audience: How do you talk to a technical person, a marketing guru, an investor? Play with different ideas, and always be armed with quick answers to important repeating questions about your team, “why you?” and vision and competition. This will help shape your company’s message.