A New Model for Startup Funding.
Fundraising like everything else is moving online, almost all of it. Traditionally, those who wanted to raise funding would meet everyone in their local area. You would pitch to the local angel network or investment group, meet with the local venture capitalist, and of course canvas all your family and friends.
It was something the CEO had to do because investors wanted to meet with the CEO of the company.
It was time consuming. You had to get introductions to investors you didn’t know and you had to keep the investors up to date with your progress. It was not uncommon to hear about 50+ pitch sessions before receiving the first investment. The investor side was equally difficult.
I ran an angel network in the 2000s and I had many startups pitch to my investors in a dinner club setting. Ninety percent of the startups would go away and we would never hear from them again.
We had no idea what happened to them.
Only about ten percent would come back and give us updates, reminders, and show some semblance of progress. Those are the startups we funded. Those CEOs built a relationship with the investor and gave enough information to the investor that one could see momentum and traction in play.
Today, there is a better way.
You can use online tools to help raise funding for your business. The key to fundraising is to build an investor prospect list and update them on your progress. It takes seven touches to close a sale – so it takes seven touches to close an investor
To raise funding you need to:
- Access a large number of investors. You need to think worldwide-not just citywide.
- Use analytics to find the right investor. Understand the different investor types – angels, VCs, family office, etc.
- Engage and maintain contact with investors. You have to demonstrate progress not just state forecasts and make promises.
- Prepare investor documents—you need to come prepared with your pitch deck, due diligence box, and other key documents for investors.
- Prepare the campaign – know what are you are going to tell the investor about your deal.
The rule of pitching is- if you don’t articulate it – it doesn’t exist. If you have revenue but don’t mention it, you get no credit for it with the investors.
This is an investor relations process using online tools. In this blog series, we’ll layout the steps you need to go through and the process you need to deploy to achieve your fundraise.
Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more Connect with him about fundraising, business growth, and emerging technologies