Startups · Entrepreneurship

Do’s and Don’ts when fundraising?

Marian Melnychuk Senior .Net Developer – Upwork

September 12th, 2016

Any tips and things that you have seen to make a difference would be great to hear and learn from. Thanks so much for your time in advance.

Martin Omansky Independent Venture Capital & Private Equity Professional

September 12th, 2016

When pitching to us, don't come unprepared. Know the realistic limits of your IP. Understand the size and segments of your potential markets. Prove to us that you can make and run a business, rather than just exploit a technology or an opportunity. Convince us that you and your team have the mix of talents and skills necessary to carry out your plans. Avoid hyperbole and unprovable claims. Comply with full disclosure requirements, warts and all. Establish personal credentials. Tell us what skin you have in the game. and what you propose to do with our money. Sent from my iPhone

James III Compliance Analyst, Malartu

September 12th, 2016

Line up 15-20% before you launch the campaign, so there is evidence of interest for those considering investment. Nobody wants to stare at a “0” when they are looking to invest. James J. Cronin III Campbell Law, J.D., 2016 NC State, B.S. Entrepreneurship, 2012 Cell: (919) 946-4465 LinkedIn

Bryan Brewer Startup mentor, educator, and entrepreneur advisor; focus on helping companies raise investor funding.

September 12th, 2016

Treat Fundraising as a Sales Process.

It makes a big difference if you are organized and streamlined in your efforts. Use a CRM to manage the process.

Key elements: Identify your prospects, set a timeline, launch an outreach campaign, work diligently on filling the pipeline with interested investors, refine your pitch as you go along, and create a sense of urgency to help close the deal faster.

Make sure you have reasonable terms ... and most especially, make sure you have a fundable company. To find out if you do, take my free Minimum Fundable Company Test at www.mfctest.com.

Robert Warren Founder and Managing Director, Mean Eyed Cat Venture Labs

September 12th, 2016

I would recommend Rob Adams book A Good Hard Kick in the Ass - drrobadams.com 

Aside from that, I agree that it's best to treat it as a sales process because in the end that is all it is.

Tom Duffy

September 12th, 2016

do not quit your day job and get market 

William Marshall Partner at UBM Law Group, LLP

September 12th, 2016

To add to Mr. Brewer's comment about treating fundraising as a sales process, try to consider the investor's perspective in formulating your pitch.  Founders can sometimes narrowly focus on their widget and why it's great (which is important). However, an investor is focused on a larger picture of (their) risk and reward. How scalable and large is the opportunity?  What are the barriers to entry?  What will the burn rate be?  What does the competitive landscape look like?  What's going to make this fail and is the opportunity potentially be big enough to offset the fact that failure rates are generally high?  

Showing that you've thought through these broader issues instills more confidence and shows that you're thinking of the investors' interests and overall business case for your venture.

Lonnie Sciambi

September 19th, 2016

Some really good advice here.  Here's my view. I've written several blog posts about the subject, but this one should give you the most succinct guidance.  It's called  "Why Should an Investor Invest in Your Business?"  - http://bit.ly/2cklvuz