Tips and Advice for Raising Venture Capital
One of the more difficult aspects of running a newly formed startup is trying to figure out how to raise capital. Whether it is trying to get in touch with a VC for the first-time or figuring out what to do for your pitch, it can be a challenge.
One recurring question we ask for The VentureFizz Podcast is "What advice can you give to first-time founders for raising capital?" We've compiled some great advice and tips from previous podcast guests to help you overcome this obstacle.
“When raising money, you have to really believe in what you are trying to accomplish. Think about what you need to get it done, or you won’t sound credible.”
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“This is a long-term relationship. Invest in figuring out what firms are making investments in your category and which partners are passionate about what you are building.”
“I would get out of your comfort zone of - being sure of what you can deliver what you are promising - because that is not the expectation of an investor. Their expectation is that you’ll keep pushing hard and pivot, and readjust to get there. But your initial plan is probably not going to be the real plan.”
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“I think if you’re coming into a pitch meeting, it’s great to bring in your whole team. You can learn so much more and prevent multiple meetings by having the key members of your team with you there because nobody builds a company by themselves.”
“My advice for any first-time founder is to gain traction and money before you start talking to people. We were advised early on to not join an accelerator and focus on building the business, and we didn’t have any initial conversations with venture capitalists until we hit $10,000 and we had some press about us.”
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“Step one is - how do you sell the investment opportunity and obviously you get points for finding your way to us is a warm introduction. Finding someone who we’ve worked with in the past, finding someone that’s part of our portfolio, or even finding someone that’s connected to me on LinkedIn. Getting the introduction to me is better than a cold email.”
“If you raise less money in your early days and focus your time, energy and attention on your customers, that is just a better use of time. I see a lot of young entrepreneurs getting distracted by the fundraising because they see it as an end, but it really isn’t. If you do, then the investors are going to expect you to do great things with your customers, so why not just start with the customers and build a great business because there will be plenty of money that will come your way.”
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“The narrative and the storytelling is incredibly important [to your pitch]. We practiced our pitch in front of other entrepreneurs that we knew in our network and got feedback before we went in to pitch to investors.”
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