By Scott Latham
Finding the funds your startup needs can be daunting, but a carefully focused plan will increase your chances of success.
If you’re fundrais-ing and feel like it’s not one of the hardest things you’ve ever done…there’s a good chance you’re doing it wrong. Here are a few tips I’ve picked up during my journey.
Every startup needs a hustler. If you’re fundraising without one, good luck. The startup hustler is like lightning in a bottle, ready to unleash a bolt of energy at a moments notice. This individual is responsible for building and encouraging the team, managing projects, de-risking the business model, and my favorite – selling the vision.
The key when fundraising is to be in “hustle mode” at all times – make this the status quo. At the start, set yourself up with a routine that can guide you through the bulk of the process:
• Block out time for just email and phone outreach
• Use email canned responses
• Track conversations
• Practice & iterate daily
While fundraising for Colabination, we’ve taken an extremely laser-focused approach in selecting our “Hit List” of investors. Stick to investors who are familiar with investing in your space and commonly work with companies at your stage of development. Today, tools like AngelList or CrunchBase make finding the right investor/company fit easy. Be wise and take advantage.
Act as though you were writing a biography about each of your targets, know everything about them. In addition, investors offer more than just capital, they invest time and experience in helping you tackle early business hurdles, which is priceless. Not to mention, investors offer access to their connections, which are hopefully aligned strategically with your business needs.
Now you’ve carefully narrowed down your targets to a formidable hit list, now all you have to do is score some meetings and its money in the bank, right? Wrong. Rarely do investors take meetings cold. If they do, they will say so explicitly.
Start by taking the target hit list and begin to draw up a second list of respected individuals in your existing warm network who can introduce you to your target investor. For most first time entrepreneurs this list will be small. That’s alright, it just means you need to hustle harder. In this case, list founders and advisors each target has worked with in the past and begin building relationships with these individuals to eventually get you to your intended target.
Fundraising is no walk in the park and it can either make or break you. Are you bootstrapping? What’s your runway? Chances are, you will need funding for your business in the future. Do you know when? Including planning and preparation, expect at minimum fundraising effort to be four to six month process. This also depends on the amount you wish to raise, which also is impacted by time. I recommend playing it safe and assuming you will raise capital. Relationships don’t make themselves, people do. So get up and get out there!
Scott Latham is the founder and CEO of Colabination, a fashion-tech firm whose mission is to empower fashion designers to be discovered through an online marketplace. He’s a fashion designer and startup mentor with a passion for collaboration. Follow Scott @_ScottLatham.
- See more at: http://philadelphia.regionsbusiness.com/diary-of-a-startup-philly-fundraising-survival-guide/#sthash.6eBpe0RF.dpuf