Fundraising is an incredibly nerve wracking process. It’s not only a rite of passage for some startups, it’s also a biennial rite of survival for those that have decided to go down the venture-backed path.
The heartbreaking thing about this is I too often see founders make things worse than it needs to be. They shoot themselves in the foot before they even get started. This self sabotage commonly happens when founders don’t begin preparing for a fundraise far enough in advance and don’t give that part of the process enough respect. Founders know they need to plan for months of a live fundraise pitching and the importance of being tight when they’re pitching to close around. Conversely, they rarely build in the healthy amount of preparation time and effort that I believe is one of the main components of an optimal fundraise.
A dull axe
I usually share this Abraham Lincoln quote with founders to emphasize how important it is to do the work preparing for their fundraise. Too often, either the fear of running out of money or the allure of more capital can drive a founder to jumping into pitching investors one at a time without preparing. They just want to get started! The result is a loose, badly organized process that introduces more stress to an already stressful process as the founder continually follows one pitch with the scramble to find more leads to pitch. These single stream processes, daisy chained together has the effectiveness of a dull axe in trying to chop down a fundraise.
Sharpen your axe
My three biggest pieces of axe sharpening advice are to:
Research what investors you want to approach and how you will get to them ahead of time. You want your top of funnel all ready to go at once as opposed to piecemealing it together.
Setup a CRM system immediately so you can drive forward the process of finding what investors you’ll reach out to and how as well as managing the live process once you’ve kicke doff.
1 and 2 take a lot of time! Know when you absolutely need money by and make sure you build the right timelines so that you can execute appropriately.
If you take the time to do these things you will infinitely increase your chances of a successful raise with less grey hair by the end. Chop that raise down!
Until next time, stay adamant and be chased.
p.s. I will be conducting a free workshop walking through the steps of setting up a killer Fundraise CRM this Wednesday 3/31 at 10am PST - register for the event here🤘