How To Find A Badass Investor For Your Early Stage Startup
Too many founders are happy to take the first check offered to them. Don’t do this.
Fundraising should be hard. On the surface it seems easy though. You build a team. Identify a problem. Create a solution. Talk to rich people. They get excited about what you’re doing. They fight over giving you money. All is good in the world.
This couldn’t be farther from the truth. Raising money is really fucking hard.
You have to talk to tens, if not hundreds, of investors. You’re going to be told “no” more times than you can imagine. Investors will question your abilities. Your vision. Your team’s dedication. Your solution’s viability. Your market opportunity. Your killer instincts. Everything. It will all be questioned.
This won’t feel good. It will make you uneasy. It will make you have tough conversations. It’s ok. This is normal. Don’t run from the process. In fact, do the opposite. Attack the process with a level of enthusiasm unknown to mankind.
Why?
Raising money is really fucking hard. It’s also worth it though. It can be an opportunity to add game-changing talent to your team. Beef up your firepower. Create an inflection point. Increase your odds of success. Badasses helping badasses.
Make sure the badass investor is actually the one you need though.
Too many founders are happy to take the first check offered to them. Don’t do this. It’s short term satisfaction that can have devastating implications in the long term.
Take your time. Be patient. Be thoughtful. Make sure you pick the right partner. Yes, your investors are your new partners. They will be important members of your team. Choose wisely.
How do you choose the right investor?
You identify the people who invest in your industry. The people who write the check size you need. The people who invest at your stage. Get an introduction to them through a trusted source. Get them interested enough to have a conversation. Convince them you’re going to win.
Don’t stop there though. You’re not done yet. Turn the tables. Go into attack mode. Drop the hammer on them. How? Pop the question. Which one? THE question.
“How can you impact my company and create an inflection point?”
It’s a simple question. Almost too simple. Remember, the logos in an investor’s portfolio don’t matter. The fact that they 5X’d their last fund doesn’t matter. Their last 5,000 word blog post is irrelevant. So are the 50k+ Twitter followers they have.
It’s all shiny bullshit distracting you.
You’re building a company. You want to surround yourself with people who can make this easier. People who will help you avoid mistakes. People who believe in you. People who can have a direct impact on your business.
Hold on. Stop. Think about what I just said. People with DIRECT IMPACT.
Can this investor dig in and help you design a more engaging product? Can this investor help you architect the right sales process? Does this investor understand how to navigate the regulatory issues you will face? Will this investor be able to create a measurable inflection point in your business?
These aren’t hypothetical questions.
These are questions you should ask potential investors. You should challenge their answers. You should ask for concrete examples of how they’ve done this previously. You should ask for references that can describe their involvement in more detail.
This is your company. You have to defend it. Don’t take the easy path. Don’t be lazy. You’re allowing this investor to get ownership. It’s not their right. It’s a privilege. A privilege you’re extending them. You’re the one in control. You’re the prize. Act like it.
Remember, fundraising is really fucking hard. At least emerge on the other end with a badass investor standing beside you.
It would be insane if you didn’t.
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