Max Zamkow


Want to know how to raise your first round? Start acting like you've already closed it.

April 26th 2018

Aristotle taught students wishing to be virtuous to “act as a virtuous person would”. Alfred Adler used a technique he termed “acting as if” to help people change their personalities. Generations have been instructed to “dress for the job you want”. Today we “fake it ‘till we make it”.

This age old technique equally applies in the world of startups. You can see it in action in lean techniques such as:

  • Wizard of Oz which simulates unimplemented UX
  • Lean Validation which validates the market by selling before a product is made (think Kickstarter)
  • Marketplace Seeding which makes marketplaces appear feel fuller by adding fake entries (ever wonder how brand new dating apps always have tons of users?)

It also works when it comes to fundraising — if you want to raise capital you should start acting as if you already have. I don’t mean that you should ramp up your hiring or add another product line, I’m saying that you should act as if you already have investors and start doing the work that comes along with it. Much less exciting, I know, but vastly more important.

Specifically, there’s one thing every single company that’s raised capital has to do, no matter what industry or where in the world it’s located, and that is to


Yep, I’m talking about investor updates. If you were hoping for some quick trick and are now disappointed, hear me out. When considering investing in your company, early-stage investors are trying to figure out four main things:

  1. Momentum — is there any traction / growth?
  2. Execution — can you make it happen?
  3. Relationship — what will it be like working with you?
  4. Market — will enough people pay for it?

Better than a pitch deck or executive summary, regular investor updates provide evidence for everything an investor cares about. Let me show you with an example:

Acme Inc. Monthly Update — April

Hi everyone,

April was a strong quarter for us. We exceeded our sales target and are getting close to two additional distributer partnerships which have the potential to significantly accelerate our growth.

The good:

  • 43 new sales, beating our target of 40. Our partnership with Globex is beginning to bear fruit.
  • 10 repeat sales, right on target
  • In the final stages of partnerships with Hooli & Stark Industries. We’re hoping to have these finalized in the next month.

The bad:

  • We lost a potentially lucrative RFP to Widgets Co. We asked Wiley why they went with Widgets, apparently the deciding factor was their enhanced warrantee. This is something we need to address going forward.
  • Our amazing customer support specialist Jonathan is leaving us to move with his spouse to Australia. He’s been training Freddy, his replacement, who we’re excited about, but Jonathan will be missed.

Metrics / KPIs we’re tracking:

  • Revenue: $16k
  • Cash in the bank: $310k
  • Net burn rate: $21k
  • 41 new sales
  • 10 repeat sales

Goals for next month:

  • Revenue: 19k
  • 50 new sales
  • 14 repeat sales

How you can help:

  • Government Contracts — We’re starting to come across some lucrative government contracts but our team doesn’t have much expertise in this area. Introductions to people who’ve successfully landed 6+ figure government contracts would be appreciated.
  • Hiring Account Executives
  • Hiring Content Marketer

Send potential investors a few of these updates and they’ll have everything they need to know about you and your company:

  1. By sharing both the good and the bad investors will know that you’ll always be honest, even when times are tough. They’ll know that you’re not ignoring failures but instead are learning from them.
  2. Via your metrics and goals they’ll see your momentum, ability to execute, and confirm that there’s a market for your product.
  3. By sending these regularly and on time investors will know exactly what it’ll be like working with you — that it’ll be easy — and they’ll know what they can do to help.

So if you’re not already writing investor updates I highly encourage you to start, even if you don’t have investors yet. It doesn’t take much time, it helps keep you focused on what matters for your startup, and it’ll make the fundraising process — when you’re ready for it — significantly easier.

I’ve already incorporated them into my formal diligence process, requiring that all prospective companies start sending me regular updates. Not only does it enable me to more accurately evaluate the opportunity, it also gives both the founders and I a chance to see what working together will be like. That way when it comes time to invest, we both know exactly what we’re getting into.

I’m a partner at Third Act Ventures, an early-stage firm investing in technologies that help Seniors, and an ambassador for Aging2.0 in NYC. If you’re working on something to make aging easier or happier I want to speak with you!

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