The Journey To Complete Your Seed Round
Raising money is not easy. Who am I kidding? It’s really hard, but if you want to make your idea come to life, it’s a necessity. So be strong. If you follow this journey map, I promise you it will be easier. Just remember — raising money is a numbers game. If you contact enough investors, sooner or later, you’ll find one that will love your pitch. Now don’t stop reading here and start spamming investors — hear my point, as you do not want to waste time and simply scatter off as many pitches as possible to potential investors. You have to be smart about things.
First Stop: Create a database of potential investors
First, you’ll need to pack your bag for the journey. For this journey, you’ll need your idea (which should already be fine-tuned and rehearsed with friends lots of times by now), a pitch deck and a site where you can send investors for more information (even if it’s just a splash page). The pitch deck should be streamlined, no more than 10–12 slides (for more information, see this “How to build a pitch deck” blog). To optimize things further, you can use a tool like slides.ai to make it faster and track your performance.
Given that fundraising is a numbers game, you’ll want to fill your pipeline with as many investors as possible. You might have a lot of connections on social media or IRL, but how many of them are ready to write a million-dollar check? That’s why you might want to consider a tool like InvestorIntelligence, which is powered by AI to analyze a potential investor pool of 30,000 angels, venture capitalists, and family offices. With a little algorithmic magic, you can narrow down your list of potential pitch targets to those that make the most sense for your startup.
With the help of InvestorIntelligence.io, you can ensure that any investor is the right match for you. In other words, is this individual (or VC firm) able and willing to write the size check you are looking for, not limited by a specific field or location? If you are a startup in New York with a live streaming consumer app, there is no need to pitch and spam a growth-stage biotech-only fund that invests only in companies in Utah. And if you’re a pre-revenue company, there’s no need to contact large VC firms that only do Series B or Series C rounds.
Second Stop: Filter and analyze the data
Based on the list of potential funding prospects, look into as many as you can. Check out what they like (and more importantly, what they do not like). In general, past investment history will be a great indicator if they like your field. So if you are a social media app and the investors have invested in Twitter and Facebook and made lots of money, they might get involved with you as well.
That’s where smart tools like InvestorIntelligence can really give you a leg up on the competition. They can help you find the little patterns and trends in all the data out there based on a number of different parameters. There are plenty of smaller funds out there (in other words, all the funds out there that aren’t Benchmark or Greylock) that might just be the perfect fit for your business.
Third Stop: Connect
It’s a numbers game, so you will need to reach out via email and if you know someone in common on LinkedIn, you can ask for an introduction, as its always better when someone can say a good word about you. Only 4–5% of your emails will get a response and you will soon find out that getting an intro on LinkedIn is not as easy as you might think. In order to get 10 meetings, you might need to email 200 investors that fit your company. With InvestorIntelligence, we have made this step easy: you set up your template once and from here, the connection is one click away. Just a reminder, though, to perfect your pitch deck before sending: you only get one chance to make a great first impression.
Fourth Stop: Communicate
Some investors will open emails, some will not. Some will tell you are great and ask for a meeting and additional materials and some will say you’re not worth their time. Remember, 90–95% of investors will reject you and your idea. Even Starbucks founder (and now presidential candidate for 2020!) Howard Schultz says that he was turned down by 217 of the 242 investors he initially talked to. if you know how to deal with rejection, great. If you don’t, start learning now — it’s a big part of the journey and you cannot give up. Your idea is too good!!!
Fifth Stop: Momentum and push
We are almost done. Remember — the journey is long, that’s why it’s called a journey and not a sprint. Now the wheels are turning, so your main job is to create momentum: lots of conference calls, emails, and meetings. You should do it every minute of the day that you can spare (that is, every moment of the day when you are not also simultaneously attempting to transform your company into a billion-dollar unicorn).
Sixth Stop: The close
Put on your Mariano Rivera Yankees jersey, fire up the Metallica music for “Enter Sandman” and start closing. Set a realistic goal for yourself, such as 10 meetings a month. That’s a bold goal, but it should yield some serious cash in your bank account. If you close on just 10 percent of those deals, that’s still one big-time investor backing your company. But if not, don’t get discouraged. Just think of Howard Schultz.
If there’s one big takeaway lesson from this journey of fundraising, it’s that finding the right investment partner takes a funnel of interested investors. If you need help building and managing your funnel, it’s worth exploring how AI-powered tools like InvestorIntelligence can help you work faster and smarter. With lists of investors that are constantly being updated, and with current contact information for key decision-makers already pre-loaded, you won’t have to worry about your investor pitches disappearing into a black hole of nothingness. For a long fundraising journey, you want to make sure you’re backed up with as many powerful tools as possible that can maximize your fundraising success.