By , Co-Founder and Co-CEO of ThirdLove. on . Heidi Zak Originally published Quora Entrepreneurs make a common mistake when it comes to raising money for their startup — they don’t start soon enough. They think they should put their heads down and develop their prototypes or set up their business, and then put some thought into getting funding. But it doesn’t work like that. You can’t spend six months building a prototype, then wake up one morning and decide it’s time to fundraise and watch the money flow in. You have to network in the finance community as you build your business to secure the right funding. Start with these steps: 1. Know The Appropriate Investors It’s important to understand who the appropriate investors are for your industry. Consider the size round you’re trying to raise. Think about whether you’re going to use an accelerator or not. Decide whether you’re looking for angel investors or institutional investors. Before asking anyone for funding, you have to identify what the space you’re operating in looks like. If you can’t, then you need to research a lot and talk with as many people as possible to figure it out. 2. Have A Status File Once you’ve figured out the appropriate investors for your company, you should create a document to keep track of them. I still have the Google Doc from every single round of funding we raised. It lists the investor, the point of contact, similar companies they’ve funded, and any notes from our calls. You’re going to have a lot of conversations and meetings, and you need a way to stay up-to-date on everything. A status file is an easy way to organize. You remember where you left off with a certain investor, who you need to follow up with, or what information you need to send someone. 3. Leverage Your Network It’s much, much better to have a warm introduction to investors than a cold introduction. The way to get warm introductions is to leverage your network. Generally, your network centers around three things: The schools you’ve attended, with networks like alum groups or business groups. Your professional career, which includes the people you’ve met and worked with over the years. Your peers and friends. These people might work in the finance community or know someone who does. Create a list of people in these networks who are connected to the finance world. Then, think about how you’re going to reach out. For example, if you want to reach someone at Sequoia Capital, check to see if you know anyone from college who works there. Look to see if someone in your circle knows someone who works there. It doesn’t matter if your contact is exactly who you need to talk to, as long as you’ve got a segue into the firm. 4. Create Your Quick Pitch Even if you do get a warm intro, people aren’t going to spend a lot of time reading your pitch. Busy professionals don’t even have time to answer their emails every day. So, if they’re going to take the time to send an email on your behalf, they need a pitch they can literally cut, paste, send. Create something that’s succinct, powerful, and easy to forward. No one has time to create your pitch for you, help you understand your value prop, or review your deck. Your job is to make it as easy as possible for someone to do you a favor and share your pitch. 5. Be Prepared For No Get ready to hear “no” a lot when trying to raise money. You can easily have 100 investor meetings and hear “no” 90 times. And the other ten will tell you “maybe.” And from those ten, you might get a few people to say “yes.” It’s tough, because your business is your baby. You’ve put your blood, sweat, and tears into this. Then someone tells you your baby isn’t that smart, or that cool, or that it will never amount to anything. You just have to block that out and keep persevering. 6. Take Time To Learn Even though you’ll be hearing “no” a lot, you can learn something from each meeting. Something about yourself, about the investor, or even about your company. You’ll learn how to answer difficult questions and how to sell your company like a pro. You’ll meet people you love and respect, people that are awesome and incredibly smart. You’ll also meet people that you don’t like at all. But every time you have a meeting, you should walk out a little smarter than when you walked in. 7. Understand The Process Fundraising is usually not a quick process. It usually takes a few months, maybe even longer. You’ll be dedicating a lot of time to it, and that’s going to take time away from running your business. You have to set up meetings, go to them, follow up afterwards — it’s like having a second job on top of the difficult one you already have. But it gets easier. After you’ve successfully fundraised once, you have a good idea of what the process entails. Each time, you become a little more educated and aware of what’s required to succeed. By , Co-Founder and Co-CEO of ThirdLove. on . Heidi Zak Originally published Quora For more trending tech answers from , visit . Quora HackerNoon.com/quora
