J. Kelly Hoey

Dear Abby: The Startup (Fundraising is Networking) Version #BYDN

Fall. When the leaves turn, the intensity of getting sh#t done increases (as the end of the year looms in the not so “is it really mid-October already” future) and the number of “I’m a startup closing a round” emails pile up in my inbox.

You may think closing a round is simply check writing but alas, you’d be wrong. Fundraising is networking. Let me repeat that again: Fundraising Is Networking (the activity otherwise known as, relationship building).
  • It’s a process counted in months (perhaps even years) of getting to know people, getting people to know you, watching how you work and how you work with others….
  • If you’re the founder of a startup currently seeking funding, read on (before your anxious fingers hit send on another cold email to a “potential” investor). If you’re a founder who may seek funding in the future, read on and avoid the errors of those who have pitched fruitlessly before you. If you’re a well-meaning person who wants to help friend who has a startup, read on — there are resources your friend may find helpful.
  • AND….should you decide to trod down the fundraising path, you’ll need a mindset of funding success to get through the highs and lows of waiting and rejection….and yes, you must realistically assume you won’t get VC or Angel funding.
Note: the emails below have been modified (but not too much) to protect the identity of the senders and to inject an “Egads! I’ve sent an email like that, did I send one to Kelly?” fear in others.

Startup Funding Email №1

Hi Kelly,

I’m looking to start avidly networking to find angel investors for my startup. I was wondering if you could point me to some of your favorite articles or tips on building these connections from scratch, and if you have any leads of angel investors open to chatting with me? I currently live in the Detroit area, but I am willing to travel if needed.

Thanks in advance!

Kindly, Startup Founder

Dear Thanks in advance!

Well…on building relationships from scratch, I’d suggest reading my book and as pay particular attention to the roadmap in Chapter 6 “Make The Connection: Start-Up or New Business Communications”.
  • Start attending startup events to meet your peers and others in the community. In New York City, I recommend signing up for the 37 Angels Newsletter as well as Startup One Stop. Both include lists of upcoming events such as pitch nights and breakfasts with investors.
  • AND read what investors have to say about pitching and fundraising.
Investor Alicia Syrett contributes her thoughts on fundraising over on Inc.com, you can also find her in the judging seat on CNBC’s PowerPitch. In this video clip “Startup investors on how to pitch like a pro” she shares her thoughts as well as in this Forbes interview “Startup Fundraising Advice For First-Time Founders From CNBC’s Power Pitch Expert Alicia Syrett”. This is by no means an exhaustive list…just a place to start…with that in mind, other investors whose blogs, videos, LinkedIn articles, tweets and snaps I’d encourage you delve into — as they are sharing information openly, frequently, online for a reason (i.e. to help founders of startups): @ArlanWasHere (Managing Partner @Backstage_Cap), @ClaudiaIannazzo (Partner @AlphaPrimeVC), @msuster (VC @UpfrontVC), @br_ttany (Partner @LatticeVC)…..

Startup Funding Email №2

Hi Kelly, I am the founder of a startup that created a marketing mobile app. I’ve been following your blog for sometime and enjoy receiving your newsletters. I am currently seeking capital, and I wanted to reach out to see if any of your networks would be interested in learning more about my startup. Some high level information about my mobile app:
  • We have 5,000 users with just 2 months being live in the AppStore
  • Female founder
  • Based in Duluth
  • 10% user growth week over week

May we setup a time to discuss?

Thank you, Startup Founder

Dear May we setup a time to discuss,

Hmmmm. If you’d really read my blog then you’d know this is not how to ask a question that will lead you closer to an introduction that may or may not lead to funding. You need to ask a specific, targeted, focused question….not one that is going to require me to spend a lot of time researching for you for an answer. You say you’re seeking funding….are you seeking:
  • VC
  •  Strategic VC (i.e.Google, Verizon, Intel, GE)
  •  Angels
  •  Friends & Family
  • Crowdfunding
  •  Debt
Yup. Funding is more than VC. And investors are not generic. Do your research (yes it will take time) and come up with a clear, targeted list. And while we’re at it…paying customers are the best form of investment. Perhaps you’re seeking that form of investment? On getting funded have you…looked in to accelerators, incubators, grants, pitch competitions (i.e. other sources of funding)? F6S is a good source for this type of information globally.

[Stay tuned dear readers of my newsletter, tweets, medium posts and more, this #BYDN Dear Abby Of Networking might turn into a regular feature….]

 

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