VC Minute – quick advice to help startup founders fundraise better.
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You need to treat your fundraise like a sales process.
At its core, selling and fundraising are very similar. In both cases, you’re exchanging money for something of value. In both cases, you’re competing for a limited pool of money from people with a limited amount of time that have a wide selection of choices available to them. The difference is that with fundraising, you need to close everyone all at once. Hence, Pool Party.
Treating your fundraise like a sales process doesn’t mean that you need to be a sales person. It means that you should be organized because organization gives you focus. When you know how many investors you have at a particular stage, say for example, “First Meeting,” then you know where your bottlenecks are. And you know who you need to go back to, to edge them closer and closer to the pool.
But more importantly, you know how much potential investment you have at each stage. When you aggregate all of those potential checks together that number becomes powerful. That number starts to show how cool your pool party is. It shows how many other people are around the edge of the pool.
This is critical and if you’re not tracking it, you can’t report back on it. You can’t communicate it back to investors. I’m going to reiterate this. You need to know how much potential capital you have at each stage. And here’s why.
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