Why Founders Need a Good Fundraising Strategy
This week I connected with a founder who contacted me on cold on Linkedin. I do not do this often, but this founder was very persistent, and I wanted to add some value. The call was interesting, to say the least.
When getting on the call, the founder asked me for background, and I gave him the quick DWP Capital pitch and our typical company profile. It was then his turn, and he gave me his whole company pitch and then asked who was behind the call. Next, he asked me for a $100k loan to get him to a pitch event. I always expect an ask for capital from founders, so this was common. The weird part was how combative he was when I told him this was not a fit for us.
He started giving me inflated numbers and telling me how his company met my profile. I assured him it was not, but he continued for the rest of our 20-minute call, trying to convince me otherwise. I wondered how many calls this founder had with investors before me.
It amazes me how methodical founders can be when building their products. They spent countless hours exploring the problem set in they are solving for my doing deep market diligence and customer discovery. But, unfortunately, this critical skill set entirely falls on its face regarding its fundraising muscle.
They often spend so much time going after anyone with the title of an investor trying to push a round peg in a square hole. With the amount of information on the internet, there is no excuse why these individuals can only do their due diligence after asking for capital.
I suggest any founder organize their fundraising motion into measurable goals.
Identify and be clear about our company's stage, industry, business model, and value proposition.
Find similar companies funded in your space and identify their early investors.
Try to find mutual connections to introduce you to said investors- if no relationships exist, write a compelling paragraph or two about the company they invested in and offer to show them what you are working on.
Repeat 100x
Refrain from wasting your time going after investors that have never invested in your geography, business model, or stage.