While there are many factors that influence seed fundraising, your behavior during the process makes a big difference. Here’s the most common traits of founders who successfully close their seed round. The Basics Phone calls rarely work for first meetings with investors as it’s hard to get their full focus. If you really can’t get an in-person meeting, then fall back to video chat. For example, a founder I recently coached was struggling to raise after ~40 phone meetings without a yes; once they began asking for in-person meetings, the round was closed in a couple of weeks. 1. They take In-Person Meetings. Take the time to comb through LinkedIn, Angellist and Crunchbase, looking for potential warm introductions to investors. When you ask for an introduction, make sure the introducer only has to click ‘forward’ to do their part. Most founders only partially complete the work for the introducer but if you make it simple for them, you can get 10x more meetings. 2. They do all the work for Introductions. No matter how much demand for your round, it never helps to be rude. Even if an investor doesn’t respond negatively at the time, they will almost certainly talk about their bad experience with others, reducing the opportunities available to you. Instead, avoid being defensive and playing too much “hard to get”. 3. They’re courteous. If you don’t ask the investor “Are you interested in investing?”, you are wasting the meeting. If you’re very early in the process you can ask “Where would we need to be for you to be interested?” but whatever happens: you must ask. 4. They ask for Money. Working with Investors Don’t discuss other investors you’re talking to, even if a different investor asks. Given most investors will pass, you’re likely giving the investor a negative reference. However, if both investors are interested, you risk them colluding on terms without your involvement. 5. They don’t brag about investor interest. Keep a document of common and difficult questions you’re getting from investors. Prepare strong answers in advance, add appropriate slides to your deck’s appendix and create a small ‘data room’ of materials online. In 2016, I saw a founder change their pitch focus from a technology advantage to bookings revenue; they went from struggling to raise $250k from Angels to closing $3M from a top VC. 6. They evolve their Pitch. Respond to investor emails within 1 business day and provide data or new materials to an investor in a timely manner. Responding to investor questions may push them to a yes. Plus, investors will only have these interactions to judge how you work together. 7. They’re Responsive. Closing the Round Send regular follow-ups, every ~3 days, to undecided investors. Update them on round progress, new investors and product or sales wins. This will drive ‘fear of missing out’ as the round’s availability dwindles. Ultimately, you have to accept that ‘maybe’ is worse than ‘no’ and push for a decision. 8. They Follow-Up. A yes isn’t real until you’ve confirmed it in writing. Confirm the investment and high level terms over email immediately and then get straight into the . Once the money is in your bank, and not before, scour your new investor’s network as detailed in point 2. 9. They Confirm Yeses. document signing and funding process For most founders, fundraising is a marathon not a sprint. You need a healthy, sustainable routine to perform everyday for the ~90 days it usually takes to close a seed round. Nobody pitches at their best when they’re exhausted and almost nobody can survive on 3 hours of sleep a night. 10. They Look After Themselves. All of these traits require little talent. No matter how nervous you are about the fundraising process, you can drastically improve your chances by choosing to put in the effort when it matters most. You should expect to hear no a lot. In many cases, founders can successfully raise a round hearing ‘no’ 90% of the time. Although it’s incredibly disheartening, the founders who keep working to generate investor meetings often find success. Bonus: 11. They are Tough. This article is part of a series on Seed Fundraising:1. When to Raise Money 2. How to Build a Deck 3. The Basics of Meetings 4. VCs vs Seed Funds vs Angels 5. How to get a Meeting 6. The 5 Most Common Pitch Mistakes 7. How to get Early Momentum 8. How to Handle an Angel Investor Meeting 9. How to Close the Lead Investor 10. 4 Investor Gotcha Questions 11. 10 Traits of Successful Founders If you’re a B2B company at the seed stage looking for help, you can reach me at ash@ashrust.com. Thanks to Kaego Rust, Alec Barrett-Wilsdon, Ashish Dua and David Smooke for their help on this article.Photo by Edwin Andrade
