THE DREAM IN ACTION

I’ve been studying a lot about raising a seed round of funding for a startup. Once your prototype is out and some traction is shown, if you’re going to need capital you gotta work very hard to get it. Here is the first of a multiple (probably 3) part series on the core things I’ve learned about raising a seed round. Note: I’ve never raised any seed money for a startup. I write these observations to share what I’ve been learning and to motivate myself and the other entrepreneurs in my shoes to get out there and get’r done.

Part 1.

Cold calling is for sales people, get a referral. If you have a recommendation from a trusted source you’ll always be in a better position with an investor. Angel networks &/or individuals will always take a referral over a cold call because you’ve already been through one layer of filtering. So, because of this reality it’s super important to always ask for a referral. Even when you meet with someone who might not be a great fit, as long as you think they liked you and would pass on your name in a positive light, hit them up for a referral.

Time your pitch with 1 cup of coffee. You won’t always have the opportunity to pull out a powerpoint deck or spend an entire meal mulling over the details of your plan. You need to have 3-4 different length pitches ready in your head. If you get a change for 10-15 minutes with a high profile investor you need to have a 10 minute pitch and a list of FAQs in your head so that the 15 minutes is a powerful use of your time. The goal is always getting the money but priority number two is the next meeting.

Beggars can’t be choosers, and you’re the beggar. Go to Angel networks, conferences, networking events and always keep your A-game on. Meet with folks who are Angels, who know Angels, who want to be Angels, etc. Give them the short pitch and setup the next meeting with whoever you can.

Use the buddy system, it’s safer. You should have a partner that you’re able to share your experiences with and that will keep you accountable. You need to be able to digest the conversation with a co-founder or close adviser so that you don’t miss any critical pieces of feedback. As you meet with investors they’ll have different concerns and at each subsequent meeting you should be able to completely address their concern from the previous meeting. If they have the same question or concern twice, and you don’t have an answer, shame on you. It’s easy to miss things without someone to keep you aware of the details. Accountability is key.

Never miss an opportunity. After every meeting you should have a list of what you need to do in order for that person to invest at the next meeting. You should have a list like this for every single person or group in your pipeline. This will become important when your first/anchor  investor is locked down and you need to bring the sub investors to show momentum. Document everything and know what opportunities are available.

Always ask for the money.

image via nardip