Skip to content

Fundraising

Building the Momentum is the key of getting people take action. There's no difference for fundraising. Therefore, we should design our process around maximizing the momentum. Also, keep in mind that founder's personality plays the key role in early stage fundraising. We want to show a founder who is: Relentess, Unique, and Positive & Kind. Don't be afraid of looking arrogant, but learn to eliminate those as you grow.

Key questions for a fundraising planning

  1. How much to raise and when?
  2. What milestones are supported by each funding round?
  3. How to find large numbers of promising investors?
  4. How to connect with promising investors?
  5. How to get investors to believe in your vision and mission?
  6. What investment instruments work best in different situations?
  7. How to negotiate reasonable terms in different types of funding rounds?
  8. How to close the deal?
  9. How to work with investors after the deal to maintain their support of the company and avoid unnecessary friction?

How to build momentums

  1. Build for big events to excite investors
  2. Talk about the better than anticipated progress on milestones
  3. Keep the round always near full by progressively raising the cap

Guidelines

  1. Build your network via hosting events, e.g. gathering or meetups
  2. Always keep conversations with investors independent
  3. Move to full raise round ater 2~3 explicit invest request
  4. Prepare 3-months full time effort for each raising round

3-Phases playbook

  • Phase 1: Make friends, build the network
  • Pahse 2: Get in touch, but not raising
  • Phase 3: Send it, get in the money

Start the relationship building 3~4 months before the raising. The goal is to make sure having a bunch of warm connections and 1~3 investors close to term sheets.

Ask for introduction

  1. Leverage the strongest introduction, preferrably by another founder
  2. Avoid being introduced by an investor who haven't invested in you
  3. Let the investor reply first, but don't wait more than 24 hrs

A common mistakes is revealing that fact that your are raising too early. Ask for introduction in a way to simply get to know the person, not for fundraising.

Types of meeting

  1. First meeting: ~30 mins to get to know each other and make impression
  2. Second meeting: 30~60 mins for product & business deepdive
  3. Reference meeting: ~10 mins

Try to dial in the second meeting in the first meeting. If not, email immediately following the meeting and schedule for the next one. Spend no more than 10 mins asking questions about them, e.g. what's their typical investment size?

The most important pitch is usually the casual one. Respond the pitch question with educational story, instead of just answering the question. The goal is educating the investor on the market about your stuffs.

Ask for reference if they decide to invest, in a way that you are trying to learn how to work with them better. Also ask for reasons if the investor says now. Pick the investor who have a strong energetic connection with.

Tips

  1. Board observer seat >> common board seat >> preferred board seat
  2. Try to raise without giving up preferred board seat at all (before series B)
  3. Fundraising enforces a better explaination of the business, which translates to others
  4. Don't let the investor know you are failing while tryig to raise from him
  5. Fundraising should be one person's full-time job, not two people's shared job
  6. Use SAFE or Convertable Note for Seed Round preferably
  7. Fundraising email templates