How to Create Your Own Luck When Fundraising for Your Startup

Aaron Dinin, PhD
Aug 6, 2020 · 8 min read
Photo by Macau Photo Agency on Unsplash

The importance of luck in the eventual success (or failure) of the fundraising process is a hotly debated topic in entrepreneurship circles. Some people argue that luck plays a huge part. You’re lucky to get meetings with the right investors, lucky to meet them when they have capital to deploy, lucky they haven’t already invested in a similar company, lucky the economy is good, and so forth.

Other people argue that luck has nothing to do with fundraising success. Finding the right investors, reaching them at the right times, securing meetings with them… those are all skills that entrepreneurs have to master. And then there’s my mother-in-law. She likes to say: “If I didn’t have bad luck, I wouldn’t have any luck at all.” I suspect plenty of startup founders feel that way, too.

Personally, I have a different perspective on luck and its relation to fundraising. I tell the entrepreneurs in my classes that their job is to create their own luck. By that I mean that luck can and will factor into the ultimate success or failure of their fundraising efforts, but they can push the odds toward or against them based on how they approach different scenarios. In other words, I try to show them how they can manipulate situations to provide a better chance at obtaining their desired outcomes. It’s not a 100% guarantee of success, but it’s better than leaving everything to chance.

To explain what I mean, let me start with a helpful example that, rather than coming from my work as an entrepreneur, comes from my work as a teacher. Regardless of whether or not you’ve tried raising venture capital, you’ve surely been a student, and I’m sure you can relate to the following scenario.

How to submit a late homework assignment

Every student I’ve ever taught who has missed an assignment and contacts me to ask if they can submit it late always makes the same mistake. They always send an email or approach me after class with some form of the following request:

“Dr. Dinin, I’m so sorry I didn’t submit the assignment on time. If I submit it late, will you still give me partial credit?”

From the perspective of the person asking for my leniency, how I respond to their request feels like luck. If they have good luck, I’ll be in a generous mood and I’ll say, “Yes, you can submit the assignment late.” If they have bad luck, I’ll be in a bad mood, and I’ll say, “Sorry, I don’t accept late assignments.”

The actual way I answer is, of course, a good bit more nuanced than that since I have policies for late assignments I try to adhere to. But I also have discretion, and this is where luck does play a role. If, for example, three other students are standing behind the first student and they’re all hoping to make the same request, it’s harder for me to say no to four students than one, so I’ll be more likely to grant some leniency. In that case, it was “lucky” multiple students had the same issue.

But students can also create their own luck by asking a different question that’s harder for me to reject.

Instead of asking, “Can I submit the assignment late,” the better approach is to complete the assignment before asking, hand it to me, and say:

“Dr. Dinin, I’m so sorry I didn’t submit the assignment on time. However, I still wanted to learn the information, so I went ahead and completed the assignment anyway. Here it is. I’d love it if you would consider accepting it for partial credit, but I understand if that’s not possible.”

Do you see how that’s a much harder request to reject? You’re still asking for the same thing, but rather than signaling that you’ll only do the assignment if I give you credit — which, of course, was never my reason for assigning it — you’ve told me you care about the lesson I was trying to teach regardless of the grade you earn.

Yes, I might still turn down your request, in which case you’ve had bad luck; however, I’m more likely to grant your request because you’ve asked in a more compelling way. In a sense, you’ve created your own luck. You’ve manipulated the circumstances around your request to make a successful outcome more likely.

Creating your own fundraising luck

Just like in my late homework submission example above, simply asking for something isn’t enough. You also need to be thinking about how you ask for it.

I realize this concept is somewhat abstract, so let me give you a few examples. I’m going to describe three common requests most entrepreneurs will make at some point during the fundraising process, and I’m going to explain how to make those same requests in ways that are more likely to receive positive responses.

Example 1: Asking for an investor intro

How most people ask:

Dear Personal Connection: I see you’re connected with XYZ Investor that I’d like to meet with. Would you please make an intro for me?

Why you’ll probably have bad luck:

How you should ask:

Dear Personal Connection: I see you’re connected with XYZ Investor that I’d like to meet with. Would you please make an intro for me? To make it easier for you, I’ve included a brief paragraph below that you can copy/paste as the intro email.

Why you’ll probably have good luck:

Example 2: Asking for a meeting

How most people ask:

Dear Investor: I’d love to meet for coffee and tell you about my startup. Are you available? Just let me know what time works best for you.

Why you’ll probably have bad luck:

How you should ask:

Dear Investor: I’d love to meet for coffee and tell you about my startup. How does 2:00 PM on next Wednesday or 10:00 AM next Thursday work for you at the coffee shop across the street from your office?

Why you’ll probably have good luck:

Example 3: Asking for referrals

How most people ask:

Do you know of any other investors who might be a good fit with what we’re doing?

Why you’ll probably have bad luck:

How you should ask:

I see you co-invested in ABC Company with XYZ Other Investor. Do you think they’d be a good fit for our company? If so, would you mind introducing us to the partner over there that you worked with?

Why you’ll probably have good luck:

The above scenarios are just a few examples of the kinds of requests entrepreneurs make during the fundraising process. For what it’s worth, the examples also represent many of the kinds of requests entrepreneurs make when building their startups: requests to potential customers; requests to employees; requests to lawyers; and so on. The important thing to remember is that there are different ways of asking for the same things, so don’t just ask and hope for the best. Be thoughtful with how you ask. The more thoughtful you are, the more likely you’ll be to get a “lucky” response.

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Aaron Dinin, PhD

Written by

I teach entrepreneurship at Duke. Software Engineer. PhD in English. I write about the mistakes entrepreneurs make since I’ve made plenty. More @ aarondinin.com

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +725K followers.

Aaron Dinin, PhD

Written by

I teach entrepreneurship at Duke. Software Engineer. PhD in English. I write about the mistakes entrepreneurs make since I’ve made plenty. More @ aarondinin.com

The Startup

Get smarter at building your thing. Follow to join The Startup’s +8 million monthly readers & +725K followers.

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