Things I have learned about raising money
Everyone has an agenda
It is really important to understand this. That agenda will inform the flow of the conversation, the elements of the business to focus on and the feedback. Once you understand, you’re in control.
Everything you’ve done is unimpressive “yes well, <established company of 15 years> does 500x what you’ve done”
Base-level KPI’s change at every meeting “if you can hit X, well, then you’re onto something” — one month later — “in hindsight, X is actually irrelevant”
Everyone would do it better/ different/ faster “maybe you should just focus on…” The only way to address this is to look humbled at the advice and furiously scribble notes like you’re a No. 1 student.
Sexism is ripe “this sounds like a lovely little business” “you look tired, are you taking any holidays?” “what age are you”?
Don’t mention the words “Unicorn” “Skyscanner” or “Uber” or “Facebook”.
You won’t meet many people who believe in your vision, but you will meet a lot of people who believe in numbers, specifically revenue. So if you have a truly disruptive idea, but can’t acquire big ticket customers, a user base of 1m, totally scalable and robust tech and a star-spangled industry advisor board on a budget of £25k, you might have some trouble…
Early-stage investment actually means “proof” “de-risked” “revenue” “customer base” “traffic” “industry validation” “press” “team” and “IP”. In fact, you might not even need investment at that stage.
If you are raising in the UK, just say you live in London. Never bring a suitcase to meetings.
Within a single day you will be told you are raising too much and not enough.
Some people like to kick-tires. They’ve had a boring/ stressful/ under/ overwhelming week and they’ll slot you in for an hour to break up the day. Or they’ll be mining your information for other investments.
Really wealthy people are super busy. Really busy. And travel frequently. Sometimes they get tired. So they might yawn. Or cut you off after your opening statement. Make it snappy and have a stash of Red Bull.
Your valuation is ludicrous. LUDICROUS. No matter what it is. Until they’ve invested and then you’re valuation must sky-rocket.
Obviously, these observations are a tad glib and partially due to negotiation tactics. There are of course, a plethora of investors who offer excellent advice, ask the right probing questions that will only enhance your business model, who will pass for various reasons, but take the time to open their contact book for you and who will earnestly commend and applaud your vision, drive & determination. And of course, they might actually put skin in the game. When you find them, hang on to them for dear life.
