VC Minute – quick advice to help startup founders fundraise better.
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Josh Sanchez
As counterintuitive as it sounds, I think the best piece of advice I ever got was, it’s never asking for money; it’s asking for help and knowing that that money will come if you’re headed in the right direction.
In my experience, I’ve always found that when you approach conversations with, “You know, here’s what we’re doing, here are our challenges, and here’s what we need help with. It tends to build a better relationship, so when the time comes, it will be much easier to write that check.
In the context of asking for advice from one specific investor, I knew that they had access to distribution, ideas for growing, our business. And I really wanted to have a conversation around that. I realized that, at the time, we wanted to be a B2B company. They had insights on the consumer side that ultimately helped us pivot to being consumer-facing. And they’ve always been a B2B investor, but they became one of our investors because I had ideas for how to pursue that, and I really wanted to validate some of those ideas with them. Then, in building that relationship, it made it much easier to write the check.
It’s being explicit about the challenges that I have with the business. You can always communicate, “Here’s the good stuff that, the business is doing or, how it’s growing.
But it’s important to be up front. Here’s what I don’t know. Here’s the crystal ball that exists with some of these challenges: Or if the team doesn’t have a person that has expertise in this industry, do you have somebody that you think we should talk to to help validate some of the conviction that we need to pursue this direction?
I would say it’s, most importantly, just being prepared. And it’s again, to the point of things being a two-way conversation. It’s doing your research. It’s truly a dating process. You’re not gonna date somebody without knowing a little bit about them. You want to have some context to help start that conversation.
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