Always lots of ideas from entrepreneurs, angels, vcs about how best to raise Seed & Early Stage capital.
‘Tis the season for end-of-year lists. So, if good enough for “Top 10 NFL GameDay Hits” — surely a list is good enough to help the cause of Building Founder Value.
Having spoken to a ton of folks who raised capital during 2011 (as point of scale, @dogpatchlabs had almost 2,000 folks apply for community residency over the last year) — here’s my real-time two cents on what can repeatably work well:
- Articulate a Killer Opportunity & a Great Company in the Making. Kind of obvious, but lots of teams don’t spend the time to prepare a discussion about how to take a solid shot at being really great. Not just really interesting — really great.
- Be Relevant. Why the team is a dead-on fit for what you are doing. And what the next several team members to-be are all about. And where you’ll get them from.
- Have a Crisp Plan. Even the earliest of great technology Seeds should have a tight set of choices to develop about how money will be made & scale achieved. And what the milestones are heading into Series A. And “What Success Looks Like” beyond that.
- Keep it Simple. Current & go-forward user growth, unit economics, revenue plans should be Comfortably-Grokked.
- Always Be Talking. Informally getting to know potential investors when not in raise mode can only help. Be careful to not be “too cute”. It’s about getting to know folks over coffee & exploring common ground.
- Create a Sense of Urgency. Investor competition is obviously helpful to the cause. But more important (& more sustainable in any market condition) is the value of articulating a legitimate opportunity window that needs exploitation – now.
- Be Prepared. Think of questions that you’d have if someone talked to you about being an angel investor in their deal. And go from there.
- What, Me Worry? Talk through how you will learn, adjust & iterate. Product, model & team.
- Talk to Investors Like You’d Be Partners. There’s a time for selling. And a time for Straight Talk. The end of the meeting — on both sides of the table — should be about Straight Talk.
- Do Your Work. This is the opportunity to really check into Investors Who Would be Partners. Ask around about what value they’ve helped to create already — with those entrepreneurs with whom they’ve already partnered. How they work. How they behave (when there are bumps in the road or worse). Bill Belichick says “Do Your Job”. The best thing you can do before weighing a Term Sheet (or multiple Term Sheets) is to Do Your Work on whom you’ll be working with for years to come.