While unforeseen events can overtake a startup, most CEOs simply don’t plan ahead.
For every $1M you want to raise, it will take you one calendar year to raise it.
Most of the time, an entrepreneur who approaches me is raising funding today and is looking for a check now. In some cases, they need their funding within the next thirty to sixty days or something bad is going to happen.
Most startups end up educating their investors during the fundraise.
I once had an entrepreneur come to me saying, “I’m not raising funding now, but in six months I will be. May I keep you informed of our progress?”
Of course, I said yes, because I wanted to see how it turned out.
Over the next six months, the CEO sent me monthly updates about his progress. When he launched his fundraise formally, he was able to close it in just a few months. He used those six months to educate the prospective investors about his deal.
This is a great technique for introducing your deal to a prospective investor. More investors sign up to track along since there’s no pressure to engage the fundraise.
It takes four touches or more to introduce your deal and educate the investor about it. It’s a great idea to start that process sooner rather than later in 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