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VC Minute: Treat Your Fundraise Like a Sales Process

By Everything

Let’s talk about treating your fundraise like a sales process. 

At its core, selling and fundraising are very similar. In both cases you are asking an individual or a company to give you money in exchange for something of value. In both cases you are competing for a limited pool of capital from people with limited time that have a wide selection of choices. 

Treating your fundraise like a sales process doesn’t mean you need to be a salesperson. It means that you should be organized because that organization gives you focus. You should have a system that you use to track potential investors—it could be as simple as a spreadsheet or as involved as a fundraising-specific CRM. 

Having an organized approach will make it easier to focus your energy. For example, if you have a stage called “Targets” filled with investors that you are targeting, then you can ask for referrals to specific investors. You can also track who you’ve pitched, when you pitched them, and what their interest level is. Even just the visual representation of seeing how many investors are in different stages can help direct your next set of emails and meeting requests. 

Organization brings focus. And Focus turns soft-circled VCs into committed capital. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0040 – 2020 Startup of the Year Summit Recap and Winners

On this episode of the Startup of the Year podcast, we included a recap of highlights from the 2020 Startup of the Year Summit.

VC Minute: Your Target is Too High

By Everything

Let’s talk about the right target amount for your fundraise. 

The amount you’re telling investors you want to raise is too high. 

This is one of the most common pieces of advice I give to founders, and one of the most consistent mistakes that founders make. And it is completely counter-intuitive. You actually want to set your fundraising target slightly lower than what you want to hit.

If you told me you were raising one million dollars and had $400k committed, you’re only 40% of the way there and I have plenty of time to sit on the sidelines. If you told me you’re raising $750k and have $400k committed, now engaged and leaning in. You may fill out the round and if I want to hit my target check size I need to move quick. 

There’s a lot more to this advice than I can squeeze into a two minute segment, but the lesson here is you want to be able to say this magic word to investors: oversubscribed. You get there by having a both a lowball target and high interest. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0039 – Funding Strategies with Dawn Dickson-Akpoghene of PopCom

On this episode of the Startup of the Year podcast, we talk with Dawn Dickson-Akpoghene, the Founder & CEO of PopCom, which has developed software to make kiosks and vending machines intelligent through data and analytics at the point of purchase. PopCom uses facial recognition, A.I, and blockchain technology to help retailers collect valuable customer insights. We first met Dawn when she participated in the Startup of the Year program with a company called Flat Out of Heels.

VC Minute: Never Set a Range as Your Target

By Everything

The VC Minute is my segment on the Startup of the Year podcast where I share a quick snippet of advice related to startup fundraising.

Let’s talk about the amount you’re setting out to raise. 

This is top of mind because I saw it multiple times in the last two weeks. When you set out to start a round, you need to set the amount that you’re trying to raise. What you never, ever want to do is make that amount a range. 

If you say, “we’re raising between 1 and 1.5 million,” my next question will be, “well, which is it? Is it 1 million or 1.5 million? That’s a 50% variance!” Making the target a range creates more questions than it answers. And what I’m thinking but not saying is, “this person doesn’t know the amount of money they need, so they don’t even know what they’re going to do with it.” 

Could you spend another half a million dollars? Sure. But that’s not the point. The point is that you have a plan and that plan requires a set amount of money. Show that you have a plan by knowing the right amount of capital you need to to achieve the plan. 

And next time on the VC Minute I’ll share, in that example, whether the right amount is 1 million or 1.5 million. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0038 Powerful Black Founder Pitch Event – Startup of the Year Podcast

On this special episode of the Startup of the Year podcast, we recap the Startup of the Year online pitch event hosted in September. This pitch event celebrated Black founders and served as a Fast-Track competition for the Top 100 Summit!

VC Minute: Building Relationships Before You Raise

By Everything

The VC Minute is my segment on the Startup of the Year podcast where I share a quick snippet of advice related to startup fundraising.

Let’s talk about building relationships before you raise. 

There’s a famous startup maxim, Lines not dots. Mark Suster wrote this on his blog in November 2010. That’s nearly 10 years ago, and it’s as true today as it was then. 

When you and I meet, I have one data point. A dot. The next time we meet and I get an update, I have two dots and I can now draw a line. Mark’s blog post, which we’ll link in the show notes, plots this on a simple graph with performance over time. The more dots, the more confident I feel in the direction of the line. 

As you meet potential investors, your goal with the first meeting isn’t to close the deal, it’s for both you and the investor to get a data point on each other. 

After this meeting, keep your potential investors updated with a regular email. I’ve received these updates as frequently as weekly (too frequent, by the way) to quarterly. At a minimum you should have four sections: the good, the bad, thank you’s and an ask.  

If you’re sending regular email updates, a potential investor has multiple dots to start drawing a line. When you have your next meeting, they can then confidently draw that line up in a positive direction. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0036 – Startup Wisdom From Stephanie Lampkin of Blendoor

On this episode of the Startup of the Year Podcast, we hear some startup wisdom from the Founder and CEO of Blendoor, Stephanie Lampkin. Blendoor is inclusive recruiting and people analytics software that mitigates unconscious bias. Candidates are sourced from hundreds of strategic partners and universities and presented to recruiters without the candidate’s name, photo, or dates. Blendoor was also the winner of the Startup of the Year pitch competition in 2015.

VC Minute: Finding Investors to Target

By Everything

The VC Minute is my segment on the Startup of the Year podcast where I share a quick snippet of advice related to startup fundraising.

Let’s talk about finding investors to target. 

Fundraising needs to be treated like a sales process. You need to know who you’re going after, why them, and how to approach them. But it starts with knowing who you’re targeting.

Generally speaking, you want to cast a wide net and start with the lesser known investors first. If you’re going to go after a big name investor, it’s best to wait until you’ve honed your pitch on others. So let’s build that list!

Signal.NFX.com is where I send most startups. It’s a free online platform for VCs to list themselves and for startups to find them. While you’re at it, you should visit another NFX site, The Company Brief and make a company brief that you can forward along. 

Visible.vc is an investor relationship hub, so it’s only fitting they have a searchable database Head over to connect.visible.vc to search for free.

OmniValley.co is a great resource with a searchable database focused on investors outside of the Bay Area, but they have some Bay Area VCs as well.

 If you’d like access to our network of investors, then apply to Startup of the Year. We hold weekly office hours that are only open to applicants. There’s no cost and no catch, except to be part of the Startup of the Year program. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0034 – Cooper Harris of Klickly

On this episode of the Startup of the Year Podcast, we catch up with Cooper Harris, the founder, and CEO of Klickly, an A.I. impulse-payments platform. Cooper invented a payment layer that leverages machine-learning to make purchasing directly within digital UIs possible. This significant innovation creates a huge efficiency in the market – the platform’s machine-learning identifies payment situations and uses sophisticated cross-origin calls to facilitate the transaction.