A sure sign that it is officially Fall – my inbox is filled with pitches from founders I’ve never met pitching companies I’ve never heard of that are creating products I didn’t know I needed. Which for you BYDN readers, means I’m stepping back on the networking-for-startups-seeking-investment soapbox – an annual occurrence it seems, as I scrolled through my blog posts I found this line from a 2017 post on this very topic:
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).
Showing up ONLY when you need something (especially when that something is money) is poor networking form. For startups, it shows a lack of understanding on how investors think about making investment. Yes, they care about the size of the market you’re disrupting and the solution you’re executing to solve a massive problem, but in reality, what they truly care about is team, team, team.
Team is a short-hand way of saying people – one of my three P’s of networking. The other two? That would be people and people.
So if you’re thinking your startup needs investors money to be successful, you’d be wrong. You need relationships.
Thinking about one founder who reached out seeking investor intros, here are some thoughts – more like questions – on how to approach finding investors:
- Talk to your existing customers. If they love your product or service, maybe they’d like to take an equity stake.
- Ask your service providers for introductions (i.e. lawyers, accountants, bankers) as they should have these connections and they should be invested in your continued success.
- Seek referrals and recommendations from other founders – if you’re not regularly talking with other startup founders, I’ve got no words.
- Sign up for office hours or attend information sessions or participate in “ask me anything” webinars offered by investors, angel groups, venture capital firms or accelerators. These are opportunities to understand the funding landscape and to hone your pitch.
- Lean on your existing investors and advisors (if you have them).
Four out of five of my suggestions require you to talk to people you already know ‘cause investing is about relationships and relationships are based on trust and trust is built over time…
And I have 10 more minutes on this topic over on the Build Your Dream Network podcast in this week’s episode “Networking With Investors”.