Launching a business is hard, but fundraising may be the most brutal part of the process. Investors are cutthroat-hard on the startups they evaluate. Like customers, they’re looking for you to solve their problems. But unlike customers, they’re on the hook for writing a massive check, which makes them hyper-critical in their search for investments in which they have confidence.
To top it off, fundraising sucks up massive amounts of your time. It puts you in a spin cycle where you’re running from one meeting to the next. You’re putting in hours of grueling work and blowing through your workday — and when all is said and done, your efforts may get you exactly nowhere.
This web of challenges can quickly send any entrepreneur into a black hole of self-doubt. Doubt, depression, exhaustion — these are the enemies of good work, and running the VC gauntlet tends to be particularly good at bringing them to the surface.
So, what’s a startup founder to do? Here are five strategies to help you persevere.
1. Get realistic (and tell your ego to take a hike)
Startup founders are optimistic, almost to a fault. This is one of your greatest strengths — you have faith you’ll succeed — and one of your greatest weaknesses (disappointment can cut like a knife).
It’s okay to be excited about the idea of fundraising, but swallow the odds before you dive in. You’re probably not going to get funded at first meeting. In reality, less than 0.05% of startups even raise VC funding.
So, what’s the solution? Be like Chris Fralic of First Round Capital and aim for the “zone of indifference.” In other words, prepare like hell. If (or when) you get turned down, you’ll know you did everything you possibly could have to succeed, so you won’t have to beat yourself up or second-guess your effort to fund raise.
2. Be confident (even if you have to fake it)
That’s right, pretend you don’t even need ‘em. Not in a rude way, but in a confident, we’ll-be-okay-with-or-without-money kind of way. There’s nothing that makes investors salivate more than a conservatively run, scrappy startup, the kind that runs on rail-thin budgets and still gains traction. Plus, confidence can work in your favor when it comes to negotiations and gaining your first clients and many other scenarios. Giving off a desperate vibe is a good thing to avoid, period.
3. Get back to work
No, this isn't sarcasm. Fundraising can knock your operation off its feet. So many startup founders become obsessive about raising capital, putting the entire process on a pedestal. You prioritize investor meetings above all else. You stay up far too late — not working on your product but tweaking your pitch deck.
Don’t put fundraising first. Put your business first. This works best if you have a team of three or more co-founders. One person deals with the investors and the others stay the course. Not only is it a wonderful distraction to keep your head down and work hard, but it says something about a startup that can still grow revenue and release shiny new product rollouts, even in the midst of fundraising. Potential investors won’t help but notice the way you run your business with such discipline and passion.
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4. Take care of you
This one is a life lesson that most entrepreneurs learn the hard way. There will never be enough hours in the day and stress, well, it’s unavoidable. It’s a part of the process. Fundraising can take over your life, so important to carve out time for you — even if it’s a slow-paced 30-minute jog or a quick dinner with friends.
Try making a list of activities that make you happy — reading a book over breakfast or going out to a new restaurant with your spouse — and schedule those activities in your calendar. Hold yourself to those appointments; don’t let fundraising consume your work life and your personal life.
5. Find your tribe
The startup community is both larger and smaller than you’d ever imagine. Spread worldwide, it’s remarkable the way founders and startup employees gravitate toward one another in any market and across virtual communities. Embrace this natural support system. Talk (and vent) to other founders about how they’ve survived fundraising. Learn their impressions of the investors you’re speaking to; gather their feedback and learn from their wins and losses.
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Throughout the fundraising process, you’ll lose track of how many proverbial doors you’ve knocked on, how many times you’ve been told “No” and how much “advice” you can handle. Fundraising is all-consuming, but you can’t let it break you. These strategies are just a handful of the ways in which you can avoid insanity and embrace the chaos.
Find the best fundraising strategy for your startup
Most tech entrepreneurs see venture capital as the holy grail of funding solutions, but there are other startup funding options, and some of them might be more advantageous for your business. This guide will help you decide what kind of capital to raise, when to raise it, and what you need to get it.