While unforeseen events can overtake a startup, many CEOs simply don’t plan ahead when it comes to fundraising. For every $1M you want to raise, it will take you one calendar year to raise it.
Most of the time, an entrepreneur who approaches me is raising funding today and is looking for a check now. In some cases, they need their funding within the next thirty to sixty days or something bad is going to happen.
Most startups end up educating their investors during the fundraise. But there is another approach one can take.
I once had an entrepreneur come to me saying, “I’m not raising funding now, but in six months I will be. May I keep you informed of our progress?”
Of course, I said yes, because I wanted to see how it turned out.
Over the next six months, the CEO sent me monthly updates about his progress. When he launched his fundraise formally, he was able to close it in just a few months. He used those six months to educate the prospective investors about his deal.
This is a great technique for introducing your deal to a prospective investor. More investors sign up to track along since there’s no pressure to engage in the fundraise.
It takes four touches or more to introduce your deal and educate the investor about it. It’s a good idea to start that process sooner rather than later in your fundraise.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today!
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NOTE: Investor Connect is a program under the Texas Open Angel Network which is a 501(c3) non-profit dedicated to the education around startup funding. Hall Martin is the principal contact, and may be reached at http://www.investorconnect.org/contact.
Hall T. Martin is the Director of Investor Connect which is 501c3 non-profit dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.