Frequent pitching will take your pitch to the next level. You’ll receive feedback and through questions you are asked, you’ll learn more about your own business. This will also prepare you for investor meetings. Investors want to work with entrepreneurs who are prepared.
Use fundraising meetings to expand your network and create valuable connections. You’ll run into the same investors over and over. In most cases, investors don’t invest after the first meeting.
The first time you meet an investor, that’s day zero of your track record. Investors want to see progress over time. This is the advantage of accelerators which helps entrepreneurs build a track record. You can’t think that investors will invest the first time you meet. Keep your investors updated. Update them every month.
The best way to fundraise is to have a great product with traction. Some founders raise based off of hype. They convince an investor and all his/her friends that they are the “hot” startup at that point in time. This is 1) really difficult to do and 2) it’s not recommended.
You will meet Yes-men investors. You’ll convince them, they’ll agree to invest and then nothing happens. Realities of fundraising.
Many factors come into play when investors decide where to invest their money. For instance, it took Christopher Columbus 7 years to raise from Queen Isabella on his quest to find India (he failed epically btw).
Don’t assume you’re not going to raise. But be prepared that realistically it may happen that you won’t be able to raise, or it may take a lot longer than you thought it would. Have a plan B. If you’re set to solve a real problem in the world through the company you’re building, money should not stop you from making that difference.
Many entrepreneurs think that when a startup raises a round, it’s not automatically a successful company. There’s a strange mentality in SIlicon Valley which glorifies startups that have raised. Raising capital is just the beginning. You will need to hire team members, invest into infrastructure, raising capital means that you will need to grow fast to satisfy your investors, you will therefore need to burn cash quickly which may in turn increase associated risks.