Seed Fundraising is extremely competitive but you can make the task much easier by managing your meetings properly; these small tactical changes can have a big influence on your efficiency and outcomes.
100 Meetings in 6 weeks
Don’t: Don’t expect 3–4 meetings per week to be enough to close a $1M+ round. It may work out for the lucky few, but generally, not taking enough meetings leads to founders raising only a fraction of their goal.
Do: Aim to take 15 meetings per week for the first 6–8 weeks of your fundraising process. Fundraising rounds often take at least 90 days to complete, so plan to be fully focused on generating new leads, taking follow-up meetings or preparing diligence materials for that entire time.
Test Fund Interest
Don’t: Don’t assume you can raise from only large VCs or only Seed Funds. If you choose the wrong group, you can waste a lot of time and end up with no money raised to show for your efforts.
Do: Take meetings with both Large VCs and Seed Funds during the early part of your process; usually ~10 from each group. If ~40% or more of a particular group get back to you within 1 business day of the meeting, there’s a good chance you’ll have success raising from that group.
Don’t take Intros from Noes
Don’t: Don’t take introductions from investors who have said No to investing in your company. The referring investor, who did not invest, is a strong negative signal to others and will likely ruin the lead. The only exception is if the investor’s thesis is so far away from your company they would never invest, e.g. a growth stage healthcare VC would never invest in a seed stage cryptocurrency startup.
Do: If you really want the introduction, get the person’s name and then find another route for a warm intro, or reach out cold. If the deciding investor tries to make the intro before they’ve made a choice, ask them to wait as “you’d like potential investors to make an independent decision first”.
3 Sets of Projections
Don’t: Don’t present the same projections plan to all types of investors. If you provide projections based on a $250k fundraise, most Seed Funds and large VCs will say you’re too early for them. If you present a $4M plan to an Angel investor, many will wait for a lead investor to commit first.
Do: Build 3 sets of projections: 1. Minimum needed to survive — usually <$750k. 2. Target raise — usually $1–2M. 3. Large raise — usually $3–5M.
Present Plan 1 to Angel investors until you have most of the round raised. Present Plan 2 to Seed Funds, and Plan 3 to large VCs.
In Person Meetings
Don’t: Don’t be tempted to accept phone calls for fundraising meetings in order to get them scheduled sooner, as phone meetings have a much lower probability of reaching a second meeting.
Do: Be patient and accept a longer wait time to schedule an in-person meeting. If the investor is based far away, or traveling for a while, you can fallback to video chat. If you’re based outside of Silicon Valley (or a different regional hub), plan to be available, in town, for at least the first 4 weeks of your raise, so most of your first meetings are in person.
Make the most of meetings during your seed fundraising, and you’re likely to find success; even in the most competitive environments.
This article is part of a series on Seed Fundraising: 1. When to Raise Money 2. How to Build a Deck 3. The Basics of Meetings 4. VCs vs Seed Funds vs Angels 5. How to get a Meeting 6. The 5 Most Common Pitch Mistakes 7. How to get Early Momentum 8. How to Handle an Angel Investor Meeting 9. How to Close the Lead Investor 10. 4 Investor Gotcha Questions 11. 10 Traits of Successful Founders 12. The 4 Stages of a VC Process 13. How to Make a Good Pitch Great 14. Meeting Requirements
If you’re a B2B company at the seed stage looking for help, you can reach me at email@example.com.
Thanks to Kaego Rust for their help on this article.
Photo by Andrew Neel