The Secret to Getting Startup Investment
Getting startup investment involves contacting and setting up meetings with investors. This process is generally really time intensive. The challenging part here is that for many startups no money is raised at all, or the amounts raised are relatively small — which leads to problems later on in the life cycle of the startup. In this article we’re going to explain to you the Burst Momentum Strategy which allows you to get more startup investment in a smaller amount of time.
Don’t Randomly Contact Investors
The diagram below is the general plan that nearly all startups use when contacting investors. The behaviour of the startup is very sporadic. You go to find an investor and engage with them, or someone refers you, or you reach out to an investor with some ‘cold’ emails. There is no real plan. The general strategy is “let’s see who is interested and then we’ll go and present.” This strategy is so random that you can’t build any momentum. Not building momentum is the big problem here. This process does not work, and, frankly, this is the process nearly all first-time entrepreneurs and startups are following.
Random Vs. Burst Momentum
In the random scenario (shown above) you might have some meetings, and some will go well, while some won’t. You might get several meetings in a row but not often. What happens with the random scenario is that investors will think that “your business isn’t interesting enough.” So using this strategy, you might get some money here and there. You’ll see in the example that you might get some $15K invested and later on another $35K and $45K. You might raise some cash, but this approach is not the ideal approach, as you don’t get far at all.
The result is that you get very confused, and no one is giving you enough money. What will happen sooner or later is you’ll get demoralised after a period of time and stop. The danger is that this process could literally kill your startup.
The Secret is the Burst Momentum Strategy
There is a better strategy to raise investment money. The key is to “pre” warm-up investors and then meet them all in a two-week period. Here are the steps for the Burst Momentum Strategy:
Step 1. “Pre” Warm-Up > Get a Sense of Interest
The “pre” warm-up would be weeks before seeing investors. You would have completed your research on investors and you would reach out to them and say:
“I’m doing this and you might be interested because you have built a business in this sector before, or you have invested in this sector before, or invested in competitor companies that aren’t directly competitive with our company or you have written this blog post, and I really think you would be interested. Can we arrange a meeting?”
The replies and answers to this gives you a sense of who you should be meeting. The output of this step would be a set of investors who are OK with setting up a time to meet. So the aim of this step is to have a list with investors who are open to meeting you.
Step 2. The Secret > When Do You Want To Meet Them?
This step revolves around when you would like to meet them. You have to figure out a period that would be good for you to meet different investors.
What you then do is contact these investors and say to them: “Can we set up a meeting in eight weeks’ time?” The reason is that it’s very easy for investors to say, “I’m very busy in the next couple of weeks.” But nobody has their calendar full for six to eight weeks from now. So, as result, they can’t really say no to you.
Basically, you’re saying, “I’m not fundraising right now, but can we set up a coffee or a quick meeting six to eight weeks from now?” You will be surprised at how many investors agree to setting up this meeting, because they can’t have an excuse and therefore accept.
Step 3. Cram All the Meetings Into Two Weeks
Create a two-week period in which you only focus on fundraising and nothing else. What you will find is that in these two weeks you’ll have a lot of momentum. Suddenly one investor starts talking to other investors, saying, “Have you seen this company?” and “Are you going to invest?” They might say, “I am considering it” and they’ll have a conversation between them whether they each might invest.
At this stage the investors start talking to each other, and one could start making an offer if the business is good. What happens is that the required money to be raised comes in a lot quicker. Because you have scheduled all these meetings into two or three weeks, it will have created this sense of urgency with investors. This leads to you having a much bigger chance to raise investment (and larger investment) while keeping momentum. If you would have taken the random approach none of this would have happened.
The Process
The recommended process is to (1) “pre” warm-up investors, then to (2) book them up for six to eight weeks from now, then (3) you put all the meetings within a two-week period and when you do all your fundraising meetings.
Understanding How to Get Startup Investment
Getting investment is, for many startups, an important milestone in their journey. However, many startups fail to get to their startup investments soon enough for them to scale their business. These startups fail to use specific strategies that that will ensure they get the attention of investors and stand out from the crowd. They struggle to understand the investors’ motivations to invest and, as a result, waste valuable time.
If your are in the process of raising investment this might help:
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