Don’t fundraise without hearing the #CollectiveWisdom from @EricPaley first
Even for strong startups, fundraising is a marathon that requires near constant attention for 8-12 weeks. The process is punishing, and riskier than you might imagine. You need to prep for it as seriously as you would a race.
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— Eric Paley (@epaley) April 1, 2019
To make matters worse, the stress level will ratchet up every week as inevitable “passes” pile up. Many deals are closed sub-optimally simply because the founder is ground down by the process, slightly panicked, and wants to be done with it. You can avoid this fate!
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— Eric Paley (@epaley) April 1, 2019
📝 Build a list
Create a Google Sheet/Airtable. Populate it w/ all the firms you want to pitch. Then step back and ask *why* you’re pitching these firms? Do they do deals at your stage? In your space? Any portfolio conflicts? Figure out which partner would be the best fit.
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— Eric Paley (@epaley) April 1, 2019
👉 Fixate on leads
This is very important: Don’t set up meetings with firms that don’t lead rounds. If you find a lead, you’ll have no trouble filling out a round. Conversely, a lot of lukewarm interest and no lead makes a deal seem weak and process seem endless.
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— Eric Paley (@epaley) April 1, 2019
🔪 Make one more cut
“It’s just one more meeting…” you’ll say about each less likely intro. Multiply that times ten and you’ll waste serious time and invite more demoralizing rejection. Important not to get distracted or create needless noise.
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— Eric Paley (@epaley) April 1, 2019
🗝️ Choose the best intros
Choosing who will make the intro is important. You need to balance closeness to the target with cachet. E.g. An intro from a successful entrepreneur is better than one from your VC. But your current VC is a better intro than a service provider.
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— Eric Paley (@epaley) April 1, 2019
🛴 Pad the schedule
You don’t want to cut a productive meeting short because you’ve got to rush out to your next appointment. Likewise, don’t create a bad first impression by being late to a meeting because of a traffic jam or your previous meeting running over.
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— Eric Paley (@epaley) April 1, 2019
🎭 Dress Rehearse
Treat these practice sessions seriously. Avoid “yadda-yaddaing” as you walk through the deck. Ask your VCs to bring some fresh ears to the pitch. Even practice things like talking while getting your computer connected and, of course, handling objections.
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— Eric Paley (@epaley) April 1, 2019
🍻 Employ the buddy system
Impressions are subjective, so it’s helpful to have at least two co-founders at the pitch to discuss the feedback from the meeting. Make sure both of you contribute to the pitch and the vibe between you reflects the positive energy at the company.
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— Eric Paley (@epaley) April 1, 2019
👂 Report objectively
After you’ve done a few pitches, reconvene with your current VCs. Use this opportunity to rejigger your deck/reconsider your narrative. Remember, try to provide as objective a report as possible—your VCs’ advice will only be as good as your account.
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— Eric Paley (@epaley) April 1, 2019
🕵️♂️ Use backchannels
Ask your VCs to check-in with the investors you pitch. You’ll rarely get straight feedback, but there will typically be some actionable insight that the VC wouldn’t share directly with an entrepreneur.
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— Eric Paley (@epaley) April 1, 2019
🏎️ Race to a term sheet
This is the least helpful advice, but the most important. Once you have one term sheet, everyone is on the clock and has to make a decision. If you sense someone is close, figure out what you need to do to close the deal. However…
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— Eric Paley (@epaley) April 1, 2019
There are a million nuances and edge cases, and no tweetstorm can come close to preparing you for the exhaustion of fundraising. That’s why it’s important to have aligned VCs and to prepare as you would for any other endurance event.
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— Eric Paley (@epaley) April 1, 2019
