Why. Why. Why. Sifting through startup emails with a massive head-shaking Why?!!!
Here’s why I suggest focusing on the why, when it comes to fundraising:
- Why are you raising money just when you need it? Fundraising is like networking, it starts before you need to close the round or have 30 days of runway left. Urgency smacks of desperation and lack of focus. No investor is seeking a desperate, unfocused venture to put their money into.
- Why aren’t you focusing on sales and revenue? As my friend Ray Walia of Launch Academy would say “the best investor is a paying customer”. Got revenue? Keep growing on it — and keep your company. To quote a memorable and impactful Joanne Wilson line “What the fuck are you giving away your equity?” If you’re making money and have a scalable venture disrupting a big market, investors will find you.
- Why do you even imagine you can raise money from complete strangers? People invest in people they know, respect and trust (note: I didn’t say like). Getting to know someone takes time, more than “can we grab a cup of coffee sometime” time. It means reading their blogs, following their Twitter or Snapchat accounts. It means your first communication should be something other than a pitch deck or request to “pick someone’s brain”. This guidance applies to crowdfunding efforts too. A crowdfunding platform simply facilitates collection of payments from people you already know.
- Why worry about a change in the funding market — unless you’ve pinned your startup dreams on other peoples’ money (then I’d suggest getting a J.O.B.). An investment is your venture is not a wealth transfer and frankly, a change in the funding climate would suit me just fine — then the market will reveal who the true innovators and hustlers are.
Investors don’t escape the why either. Why are you circulating a startup’s funding deck if you’re not directly investing? Don’t pass the deck unless you’re putting down a buck or two (or include a note why you’re not investing or passing on this deal). Tell me why I or any other investor should be interested beyond “have you met” “this is my”. My “why should I look at this needs more”, that’s why.