Do’s & Don’ts For Raising Money As A First Time Founder
Get a mentor! Actually, get a couple. One who is light years ahead of you and one who is not quite as far along to help you take things one day at a time.
By Courtney Powell (Founder & CEO, PublikDemand)
One day I hope to describe in greater detail my lessons from fundraising for PublikDemand. It has been an extraordinary experience.
In the meantime…
- DO get on it: you, your company and your team members.
- DON’T publish your profiles without a more experienced founder or advisor reviewing it first.
- DO read this AngelList tip goldmine first.
On Funding Strategy:
- DO read this and know where you are in your company’s funding lifecycle.
- DO read this on creating your own demand.
- DO use a funding spreadsheet to keep track of your progress. Download mine here.
On Social Proof:
- DO find 2-3 well-connected, credible people to build a warm referral plan.
- DO understand the ‘back channel’. People will check up on you. Mind your P’s&Q’s.
- DO understand the theory behind VC SIGNAL.
On Financing Structure:
- DO: Watch Naval’s talk on Dynamic Pricing. All of it.
- DO: READ BRAD FELD’s Venture Deals. Seriously.
- DO understand the difference between convertible notes and priced rounds.
- DO search Quora if you don’t understand things about boards/equity/advisors.
- DO keep a list of reoccurring questions and understand why they are being asked and fix the issue or find a way to mitigate it in your pitch. Download my example questions here.
- DO be courteous, genuine and respectful of people’s time.
- DO remember that it’s the relationship that matters the most. They may not invest in this company but you will hopefully have many more.
- DON’T skip on getting references from your investors. Talk to other founders they have invested in.
- DO have your funding docs and wire info at the ready so you can close quickly.
- DON’T pitch. TELL A STORY. Give macro context.
- DO show that you understand your place in both the PROBLEM and SOLUTION space.
- DO skip BS projections.
- DO articulate why you, your brain, your skills, your experience and that of your team is the right combination to build this company.
- DON’T just talk to hear yourself talk. Engage your audience and LISTEN to their questions and suggestions. Hopefully these are smart people and there is a huge opportunity to LEARN FROM THEM.
- DON’T rely on your pitch deck. You should be totally fluent in your product, marketing, metrics and vision.
- DO know why you are doing this. If you don’t believe it you will not make it happen.
- DO listen to other successful entrepreneurs and LEARN. I swear by Stanford Ventures Entrepreneurial Thought Leadership Podcast.
- DON’T beat your self up if you hear a “no”. It happens to everyone. Brush yourself off and KEEP GOING.
- DO use affirmations, Brian Tracy, or some other positive mental mechanism to build yourself up for this battle. It sounds hokey but it’s not.
- DO take a couple days break when you can no longer think clearly.
- DO get some sleep. They can tell if you are delirious.
- DO work out, get a massage or de-stress before big meetings.
- DON’T take it out on your team.
Finally… DON’T lose sight of the fact that Silicon Valley is a strange place and asking people for money is not a normal thing either. It will pass and you will be able to get back to what you love.
This post was originally posted at Courtney Powell’s blog.
About the guest blogger: Courtney Powell is Founder and CEO of PublikDemand, giving individuals a voice against large corporations and giving corporations an incentive to put their customers before their profits. Her passion for starting companies began at age 20 when she joined Boundless Network, a fledgling startup that quickly become one of the fastest-growing companies in America. She founded LeedSeed in 2009, a marketing automation firm for leading companies. Follow her on Twitter at @CourtneyPowell.