117. Commanding the Fundraising Process, Mistakes & Storytelling

VC Minute
A mistake in fundraising is being ambiguous when it shouldn't be ambiguous; it should be truly a process.

VC Minute – quick advice to help startup founders fundraise better.

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Josh Sanchez

The biggest mistake in fundraising is not commanding the fundraising process. And what that means is making the mistake of making fundraising a bit more ambiguous when it shouldn’t be ambiguous. It should be a true process.

There’s a lot of pre-work that has to happen before you think you’re about to fundraise.

Build a running list of things that you think people are going to ask questions about and have answers and consistent answers to some of those questions. It’s having the data room really, really prepared for the fundraising process.  

It’s being able to segment who you want to talk with first and why you want to talk with them first. It might mean talking to investors that you can afford to make mistakes with, right? Because that’s going to help solicit some of the questions that you want to have better answers to when you’re talking with a tier one or tier two investor. It’s having that level of organization. 

I’d add to that that, in running a true process, it’s the follow-up that happens. It’s knowing that it’s not a one-way conversation. It’s a two-sided conversation.  It’s having questions for them and being explicit about what you need help with. I’ve always found that to be really helpful. 

The other thing I would share is that you should leverage your existing investors much more. Ask for those intros. At the end of the day, it’s a team process. Your investors are a part of your team. Leverage them. That’s the only way you’re going to win a championship. 

I’d say the other mistake would be to not be afraid to make mistakes. As dumb as that sounds, the other mistake is, yeah, don’t be afraid to make mistakes. It’s okay. You’re not perfect. No one’s perfect. Approach every conversation with, you know, genuineness and transparency. I think people appreciate that. 

The other thing I would add is being a great storyteller. Going through the whole fundraising journey, it was different being able to raise money when you’re communicating that traction and how that North Star KPI is always growing. 

And then what I realized is that when you get to the later-stage conversations, I don’t want to sound bad by saying this, but it’s not entirely about the traction. It’s: what is the big vision that you’re pursuing, and why are you headed that way? What is the opportunity behind it? Especially when you’re dealing with institutional investors, that’s what they’re making a big bet on: that vision and the team that’s going to help drive that, the founder that’s going to help push towards that vision.

You have to be a good storyteller.

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