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Fundraising advice to avoid!
If you are a first-time founder looking to raise funds, this thread can help you avoid some basic fundraising mistakes and make a better decision about how to approach it
If you are a first-time founder looking to raise funds, this thread can help you avoid some basic fundraising mistakes and make a better decision about how to approach it
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As an entrepreneur, I had to raise money many times. I succeeded a few times but failed most of the time. I’d often follow popular advice about how to approach investors and what to pitch them.
As an investor, I now realize how much of that advice mostly worked against me.
As an entrepreneur, I had to raise money many times. I succeeded a few times but failed most of the time. I’d often follow popular advice about how to approach investors and what to pitch them.
As an investor, I now realize how much of that advice mostly worked against me.
1/
'Don’t talk to associates, speak directly to the partners'
Associates/VPs can play a significant role in building your case and nudge the partner to dive deeper if he/she is on the fence. Unless you know the partner well, don't hesitate in reaching out to the middle layer.
'Don’t talk to associates, speak directly to the partners'
Associates/VPs can play a significant role in building your case and nudge the partner to dive deeper if he/she is on the fence. Unless you know the partner well, don't hesitate in reaching out to the middle layer.
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'Adding buzz words in the pitch will likely gain more interest'
Investors hear these buzz words on daily basis and are more tired of them than you are. Just adding .ai at the end is not going to get you funded. Infact, improper use of a buzz word can weaken your pitch
'Adding buzz words in the pitch will likely gain more interest'
Investors hear these buzz words on daily basis and are more tired of them than you are. Just adding .ai at the end is not going to get you funded. Infact, improper use of a buzz word can weaken your pitch
3/
'Mould your story according to what the investors want to hear'
A founder friend once asked me to find out what thesis will sell more among the investors
My advice-don't pitch what investors want to hear, pitch what works for u. Investors will find out if things don't add up
'Mould your story according to what the investors want to hear'
A founder friend once asked me to find out what thesis will sell more among the investors
My advice-don't pitch what investors want to hear, pitch what works for u. Investors will find out if things don't add up
4/
'Always demand a higher amount from the investors to start on a stronger foot'
No harm in being ambitious, but your ask should be justified.
In one of our investor meeting, we asked for an unrealistically high amount. We were laughed out of the room and lost our credibility.
'Always demand a higher amount from the investors to start on a stronger foot'
No harm in being ambitious, but your ask should be justified.
In one of our investor meeting, we asked for an unrealistically high amount. We were laughed out of the room and lost our credibility.
5/
'Money doesn’t have any color. Take money from whoever is giving you'
Don't partner with investors that are not right for u. Getting them off ur Cap-table is impossible. A frnd had to shut his company bcoz existing investor was adamant on terms not acceptable to new investors
'Money doesn’t have any color. Take money from whoever is giving you'
Don't partner with investors that are not right for u. Getting them off ur Cap-table is impossible. A frnd had to shut his company bcoz existing investor was adamant on terms not acceptable to new investors
6/
'Try reaching out to as many investors as possible. Even if you have to do a cold reachout'
Always reachout to investors in a batch of 4-5 and improvise your pitch with every batch based on their questions & feedback. A warm introduction is infinitely better than a cold email
'Try reaching out to as many investors as possible. Even if you have to do a cold reachout'
Always reachout to investors in a batch of 4-5 and improvise your pitch with every batch based on their questions & feedback. A warm introduction is infinitely better than a cold email
7/
'Inflate your numbers, as investors expect that and do a correction of their own'
Nothing can be farther from the truth. Investors expect you to be transparent and value that trait. They will know that you are reliable and need not be second-guessed on the info you provide.
'Inflate your numbers, as investors expect that and do a correction of their own'
Nothing can be farther from the truth. Investors expect you to be transparent and value that trait. They will know that you are reliable and need not be second-guessed on the info you provide.
