I’m a big believer that the soft skills of fundraising are far trickier than the hard skills of fundraising.
If you’ve ever worked in a sales job, you now that FOMO and greed are great drivers to get any sale done. It’s the same with fundraising for your company: you want to create FOMO and, especially for investors, understand that greed is important.
Don’t get me wrong: your product, your market, your team and everything else in between matter… but only to the extent that you talk about them and move on.
OK, let’s quickly talk about definitions:
- FOMO: Fear Of Missing Out. It’s exactly what it sounds like.
- Greed. Again, exactly what it sounds like.
When you’re talking to any investor, it’s ultra important to keep the conversation focused on business growth because it’s FOMO and greed that will get your deal done.
In order to do that authentically, you need to do a couple of things:
- Have a business. We’ve talked about this already but you need to have some sort of traction to justify a fundraise these days.
- Fundraise full time. You can’t half-ass this. Building a company is hard. Getting people to invest in that company is harder. If you’re serious about fundraising, you need to keep the company growing and then carve out a month of your own time to setup meetings. If you want to raise $500K, plan on setting up 500 meetings.
- Keep the meetings tight. The goal of the meeting is to focus on business growth, try to avoid spending too much time on pleasantries and other unrelated things. Don’t let the meeting go long — in fact, try to end the meeting early and casually mention that you need to get back to work. Better yet, casually mention that you have another investor meeting scheduled and you want to respect everyone’s time.
If you find yourself talking about anything other than business growth with an investor for more than 50% of the allotted time in your meeting, your deal isn’t going to happen.
If you’re raising money from someone else, your goal is to build the biggest / best company within your vertical. If you agree with that, then you have to agree that business growth is the only thing that matters.
Investing in early stage startup companies is emotional, not rational.
Also published on Medium.