Some Notes on Fundraising

Over the last two decades I have helped many companies raise venture capital rounds. Here are some of the lessons I have learned from this.

If your company is growing like crazy you will have an easy time fundraising and you can ignore pretty much everything that follows. Put differently, what I am writing here is for companies where the ability to raise money is somewhat in question.

Fundraising is selling. You are literally getting money in return for selling a part of your company. Because fundraising is selling, many of the lessons from how to be effective at sales apply directly to fundraising. This starts with the crucial need for qualification of who you are talking to. Build a broad funnel so that you can qualify hard. Otherwise you will wind up spending a lot of time with VC firms that will never get there. How do you qualify firms? Through an initial conversation where you figure out such things as do they seem to know the space you are operating in? What is their process and are you talking to the right people?

The second crucial insight from selling is that your goal is to get from push mode into pull mode as quickly as possibly. What do I mean by that? You want to stop talking and let the investors ask questions. That means the investors are engaged and ideally are starting to sell themselves on the opportunity. A bad pitch is one where you do all (Read more...)