Raising Your Next Funding Round? Here’s Advice From Successful CEOs

This is the final blog in a series by High Alpha’s Sr. Financial Analyst Maddy Cutler all about raising your next fundraising round.

12.21.21
Article by
Maddy Cutler

This is the final blog in a three-part series by High Alpha’s Senior Financial Analyst Maddy Cutler. Read the first part and second part of the series.

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As a first-time founder, raising venture capital may feel ambiguous and difficult to navigate. But, I assure you, that you can be successful. I’ve helped many first-time founders through it and aggregated their advice to help you through, too. 

In my first two articles of this series, we covered seven pieces of advice from High Alpha CEOs:

In the first part of this series, each founder graciously shared their tips for creating a strong narrative and building out a visually appealing deck. In our second part, they focused on how to get organized for an effective fundraising process. Armed with this new knowledge, you're ready to finish fundraising? Almost!

Below are three more tips to help you personalize your efforts, build better relationships with investors, and stay true to yourself throughout the process. 

Tip #1: Understand Each Investor’s Process

One common mistake CEOs often make is leaving an investor meeting without clarifying the next steps in the process.  There are multiple stages of the pitching process and the amount of time it takes to get from an introduction to a term sheet can vary greatly. It depends on the investor, the stage of your business, their level of diligence, and the number of follow-up questions they have, among many other factors. 

Each investor or investing team has their own process. Some can move very quickly, some won't. And you just have to understand what each of their processes are. One of the things I’ve learned is don't be afraid to ask them.
Darin Brown, CEO and Co-founder of Docket
It comes down to knowing your audience. Is the person that you're talking to authorized to make a decision on behalf of the venture firm. And if they're not authorized to make that call, what is their plan and how quickly can they get the team engaged?
Jim Goldman, CEO and Co-founder of Trava

It is always important to ask where you are in the process and understand what comes next. In most cases, there is one or a few people at the firm who are fighting for you internally to convince their partners to make the investment. Know who your champion is and lean on them for guidance on how to navigate the process.

Tip #2: Keep Your Connections Warm for Future Rounds

During the fundraising process, you’ll make many investor connections. Some investors may not be the right fit at this time, but we highly recommend keeping these new connections warm for future rounds. You will likely need to fundraise in the future and it will be significantly easier to pitch to “warm” investors who are familiar with the business, instead of having to start at zero. 

Jim Goldman has been incredibly successful at keeping these steady lines of communication open by sharing a quarterly report called the Trava Times to potential investors who have opted-in for updates on his business.

Tip #3: Stay True to Yourself and Your Vision

Every investor is going to have an opinion about you, good or bad, and it’s easy to get swept up in the overwhelming amount of feedback you receive throughout the process.  Although pieces of feedback may be valuable, at the end of the day, you have to stay true to yourself as a company. It is your vision, not theirs. 

There is no one right way to fundraise. I think one thing people get wrong or obsessed over is trying to do it the 'right way'. At the end of the day, it's storytelling. Some people are going to like your story … and others are just not going to get your story at all. It's all subjective. But remain convicted about why you started the company, and know why you're doing this. The goal is ultimately to get them to  invest, but even before they can invest, you have to get them to see your vision and there's no one right way to do that.
Lindsay Tjepkema, CEO and Co-founder of Casted
They're trusting you as a leader.  They're investing in your passion as a leader to solve a problem. And they're investing in the viability of the problem in that order.
Jim Goldman, CEO and Co-founder of Trava

Although fundraising can be a challenging process, it is a great time to share your compelling story with investors, emphasize the incredible team and product you are building and express your conviction about why you will be successful. Ultimately, you’ll find a key investor and strategic partner who will help you take your business to the next level. You’ve got this! 

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