How mastering the rules of dating will help secure your next round of funding

There are over 6,700 startups in Los Angeles, according to AngelList, and the competition for investment capital is heating up for early stage startups. The bar to gather funding is higher than ever as investors have many choices where they can expend their money. Let’s imagine this competitive situation as a different scenario.

Imagine this: You are a bachelor looking for a date in a bar filled with 100 other suitors. Inside the bar, there are only a handful of prospects and every bachelor is waiting for their chance to make their move. How do you position yourself? What will you say? What makes you unique and intriguing?

This wooing process is similar to how founders find investments. If you equate scoring a first date to securing a round of investment, then what can we learn from that tried and tested art?

Are you a suitable mate? Do you and your team have the right skill set?

Are you attractive? Does your startup interest them?

Are you unique? Does your startup actually solve a problem?

Are you aggressive? Are you desperate for investment?

Are you a smooth talker? Is your startup pitch on-point?

The process to get funded is not easy. Just like dating, Angel Investors and Venture Capitalists (VCs) go through a very similar process with the startups they invest in. Do they like you as a person and your idea? Would they be interested in spending time with you outside of your startup? More often than not, having the right idea and perfect solution is not what gets you funding. It’s the bigger questions such as: can they see themselves with someone like you? Or are you simply not that interesting of a person?

Start early on
Like dating, some people find investment easier than others. We’ve all heard stories about individuals who’ve raised capital by simply having an idea. One of the biggest mistakes I’ve heard from founders is that they think money will show up when their startup is ready. The truth is that you need to network with VCs and Angel investors during the early stages of your startup. Tell them about your idea, what you’ve done thus far, and how you plan to progress. This will give them key insights into your character so they can begin to formulate opinions about you and your plans. I’ve seen investments take an average of four months to get a check in your hands. As you begin to get traction and hit milestones, share your accomplishments with your investors and create that relationship. Over time, that Angel investor and VC will turn into an advisor and help keep you on the right track.

In a conversation with Shan Aggarwal of Greycroft Partners, he stated that “many of the companies we ultimately invest in are ones we’ve met early in their lifecycle, so it’s still valuable to reach out and meet with investors who might not typically invest at the company’s current stage.” Although underlying business fundamentals are important to Shan, he likes to get to know the founders early on so that when they do invest, he has ensured their money was invested with the right people.

De-risk your startup
A startup is inherently risky in its early stages. The core product development team is not solidified, the MVP hasn’t been built, key hypotheses haven’t been validated, and there’s no traction to show. De-risking simply means eliminating as much risk as possible from your startup.

There’s still much to learn from our dating scenario. As your date begins to learn that their suitor is working in a bootstrapped startup, sharing an apartment with four friends to save money, and going out to dinner at Chipotle, they begin to question if this relationship will work. Why? Because they’re exposing themselves to quite a bit of risk and aren’t sure if they want to roll the dice.

Prioritize your activities in these early stages to show that you’re a safe bet. Let’s say your start-up gives on-demand kung-fu lessons, showing results could simply mean receiving some email booking notifications from a SquareSpace website and dispatching a vendor to the customer with all details via text or email. These type of results help show traction, but more importantly, will teach you key lessons about nuances in the market by tracking your progress.

The right investor
After de-risking your startup, you’re sure to have more swagger in your step. Naturally, you’ll begin to focus on securing some investment capital. But before you do, think back on the relationships you’ve held in the past. I’m sure you can think of a few bad dates that weren’t worth the follow-up. The same goes for receiving investment capital. Taking an investment from the wrong person can screw your startup. The ideal investor is someone with experience in your industry, or can provide additional resources, such as a vast network of people. The most difficult round of investments to raise right now is, undoubtedly, Series A. Having the right stack of people backing your startup will make Series A easier to obtain. Choose wisely.

Positioning yourself
Image matters. The image we exude can position us either poorly or strongly against other prospects; each person naturally attracts certain types of people. Think hard about what type of person you attract. Are wealthy bachelor-types in that category? A well-kept bachelor with a great car and modern apartment rarely has trouble dating. This bachelor goes to the bar dressed with confidence, and glides around the room without notice to the other 99 suitors. He walks right up to the prospect that immediately caught his eye; some soft words and a few giggles later, it’s obvious that he’s winning the game. This, my friends, is positioning. The bachelor came into the game from a place of high status and was capable of getting what he wanted by creating a badass image and maintaining a dominant position. I encourage you to step up your game and craft the power frame for yourself.

As you tread through the rocky road of startup life, start creating meaningful relationships with people who can open doors for you. De-risk your startup by making it an appealing investment that investors have trouble looking past. Strong relationships cannot be formed when a transaction is at the core of the conversation you’re having. If your intention is to receive funding immediately because you feel ‘you’re ready’, investors will sense your desperation. As does my friend’s classic pick-up line “hey baby, let me buy you a drink.” Having open, engaging conversations about who you are as a person and what you hope to do with your startup, are foundations for creating a strong network of long lasting relationships. When you’re truly ready and embody the confident startup CEO, investors will know. Happy funding.

Ebrahim Bhaiji, rhubarbarian


Originally published at on October 26, 2015.

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