Startup fundraising is one of the most important activities for a founder or early-stage employee.
I’ve seen the process from both sides. Before business school, I worked as an executive assistant for a venture capital firm in Boston. More recently, I went through the fundraising process for my demand generation company, Spark Your Channel. We raised our Pre-Seed round with York IE in early 2020 and got acquired by my current employer, 360insights.com, in November 2021. Each of these experiences gave valuable perspective.
Capital is essential for startup growth. That doesn’t mean it’s easy to get! Navigating the challenges of fundraising — networking, cold outreach, negotiations — can be difficult when you’re also trying to hit sales quotas, attract new customers and keep your business running.
As someone who’s been through it, I wanted to share some fundraising advice for startups and their founders:
How to Fundraise for a Startup
To fundraise for a startup, follow these four pieces of advice:
- Target investors aligned with your stage and market.
- Don’t send your pitch deck first.
- Find a partner that genuinely cares about you.
- Take a hike — literally.
As you organize yourself, it’s essential to follow these basic rules to find the right investor while maintaining a healthy work-life balance.
1. Target Investors Aligned with Your Stage and Market
I treated fundraising almost like a sales process. My goal was to find investors that matched my needs and then try to start conversations with their firms.
There are plenty of investor research tools that can help you narrow your search. For Spark Your Channel, I made sure to look for firms that typically invested in seed-stage companies and then narrowed them down by location. I was living in Colorado at the time, had grown up in Massachusetts and had connections in California, so I kept my search limited to those three areas.
Be strategic. Don’t waste time emailing a giant venture capital firm that writes $50 million checks if you’re a seed-stage company. There are a lot of investors out there. Make sure to find one that fits your company’s profile.
Startup Success Lessons Learned
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2. Don’t Send Your Pitch Deck First
The pitch deck is a crucial document for startup fundraising. Still, potential investors don’t need to see it attached to your first cold email or LinkedIn message.
VCs spend about four minutes looking at a pitch deck on average. Your company is worth more time than that! You want the chance to walk through the deck yourself, delivering the human touch and company story that complements the slides on screen.
I would send potential VCs a one-pager that succinctly told our company story and showed our proof of concept. It provided enough info to explain the company, without sharing all our cards from the start. Your closing line of an email can be, “I’d love to take you through the pitch deck when you have some time.”
3. Find a Partner that Genuinely Cares About You
Traditionally, many entrepreneurs think of an investor as their boss. It’s better to view investors as partners. You’re working together to achieve the same goals of sustainable business growth.
York IE was one of my early investors. They wrote their check on March 10, 2020 — right before the pandemic changed everything in the United States. The next few months were a difficult time for everyone. It was comforting to know that during those turbulent months, the York IE team was there to help me through challenges in both my personal and business life.
You’ve worked hard to build your company and prove your concept. Find an investor that you actually enjoy working with. Their guidance is often worth more than the check they write.
4. Take a Hike – Literally
This is the best piece of startup fundraising advice I can give. When things got overly stressful during fundraising, my favorite activity was venturing into the mountains of Colorado for a hike.
Finding investors can be exhausting. You’re constantly researching, emailing, hopping on Zoom calls or heading to coffee chats. Remember to save some time for yourself and your loved ones amidst the craziness.
You don’t want to wear yourself down or miss family events because you’re chasing an investor. You’ll find the right fit when it’s time.
Act on This Fundraising Advice for Startups!
You can read all the startup fundraising advice in the world, but you’ll never get where you need to be unless you take action.
Build a strategic list of potential investors, prepare your one-pager and start sending off some emails and messages. Fundraising is a lot of work, but it’s so rewarding when you find an investment partner that helps your company reach its goals.