The Most Overlooked Step in Fundraising

From Sam

Good news! There is more early stage capital available in the Green Mountain State than ever before. But just because the capital is abundant, doesn’t mean that it’s easily obtained. Luckily, there is a lot you can do to ensure a successful raise. Let me start with the disclaimer that there is much to be done before you even begin fundraising (assuming venture capital is right for you and your company). Here’s how to get your ducks in a row:

1. Understand your imminent capital needs, including how much money you need, when you need it, how you’ll spend it, and how long you expect it to last.
2. Determine the type of investor you want, as well as the deal structure and terms you’re comfortable with.
3. Have an idea of your company’s capital path beyond your current raise. Will you need another round? When?
4. Create a well-organized data room with everything an interested investor may want or need to see.

Quick side note: If you need help with any of the above steps, please reach out. This is our jam, and VCET advising is free!

But regardless of whether or not you have your ducks in a row, there is one critical step that is often overlooked: your first impression. It may seem trivial, but from an investor’s perspective, it can make or break the relationship. You can only make a first impression once, so here’s my unfiltered advice on how to get it right the first time (most of which applies to digital and IRL first impressions):

1. Get a warm intro if possible. It immediately builds trust and gets you priority for a reply.
2. Reach out on one channel at a time If you send me an email, a contact form, and a LinkedIn DM…I get them all at the same time. Suddenly you have my attention but you’ve also tripled my workload. I am annoyed. So, spread the love…if you don’t hear back for a week or so, then you can try another channel.
3. Be succinct. Remember, the goal of your first outreach is to get a call or a meeting scheduled, not to get an instant investment. If you lay it all out there in the first outreach, you may be giving me an easy out. So your job is to provide enough info to simply pique my interest to secure that first meeting.
4. Have a clear, simple ask. “Can I have 30 minutes of your time to tell you more about our raise and get some feedback on our deck?” This clarifies expectations and forces me, the investor, to say “yes” or “no” to a meeting. Also, asking for feedback shows me that you’re looking for value beyond a check, and that you are a coachable founder.
5. Be cool and calculated. Even if you’re feeling the pressure, a sense of urgency does not come across well (especially in email)…I’ll assume that I’m your last-ditch effort and everyone else has already passed on your round. No good!

That’s it for now. I hope my advice helps you land a great meeting, a great advisor, and maybe even a great big check!

Love,

Sam