VC Minute – quick advice to help startup founders fundraise better.
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The last piece in your toolkit for driving action is deadlines. When you’ve got enough capital around the table, it’s time to pull it in. And nothing drives action like a deadline.
Now, fair word of warning, similar to overstating commitments, if you set a deadline and then move it, and then set a new deadline and move that, investors will lose faith in your ability to bring this round to a close. And it makes me wonder if there’s something else going on, like, say for example, you don’t really have $2 million committed. You may have investors start to back out, and the round could spiral out of control.
However, you’ll know when you’re ready. Ideally you’ll have a lead investor in place and between you and the lead, you can set that deadline. You can also do this without a lead. If you have enough capital at the table, run a SAFE note. Pull all of that capital together, set a deadline and get those last few folks in the pool.
After you set that deadline, you go back to those last few investors that were milling about at the edge of the pool, that were given you the SHITS, and show them how everybody’s in the pool having a great time, splashing around, and if they want in, they need to jump in now.
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