The secret of an entrepreneur getting the first investment

Editor's note: This article is adapted from Darius Monsef,creativemarket founder and Ceo,500startups & PIEPDX entrepreneur Mentor, his blog address hellobubs. After the first financing failure, the author has succeeded in succeeding in the second and third financing. What could be more persuasive than an experienced one? If you're on your way to financing the first time, you may have a lot less detours.

I've had 3 rounds of financing, one round of failure, another two for 1 million, one 1.3 million, and all in a matter of weeks. I got the most out of the first failure, when we just finished the YC hatch and were considered a profitable company. We have some ideas about how to get on track, most of the time we think "What investors want to hear", so it actually obscures our passion, and gradually we are not sure whether we need this round of financing, and then we have a few meetings with interested investors, A few weeks later, the verbal commitment to invest began to slow down the speed of the emails, and some of them didn't even respond, so I took the initiative to end the fundraising and tell the investors that I would come back.

We do not need to fail the financing experience, but we have to understand the reasons for failure, the following is my personal experience from failure to success, I hope it can help you smooth financing, less detours.

1. Manufacturing Hotspots

This is the first step in the entrepreneurial marathon, you have to visit the relevant characters, and make sure that the person across your desk is what you are looking for, some lucky entrepreneurs bathed in the halo of the smooth gathering of funds, but most of us need to get down to do what we do.

During my company's fundraising period, I spent 100% of my time, and my team knew that I was not trying to make the product or the development business, which was especially hard for a person's startup, and if you couldn't find a way to create a hot spot, you might not be able to finance it successfully.

2. Strike the iron, quick.

From the moment you tell someone you are raising money, the bell for financing is ringing. The longer the financing cycle, the less likely it is to succeed. If the trend is hot, you should be able to quickly attract investors and quickly end the financing, and if you're not working for two months, it's likely to cool and freeze.

When you start financing, you have to be prepared:

-You've been saying hello to interested investors.

-Your spreadsheet has 30-50 lists of investors listed.

-You've already got 3-5 people who don't know what they're introducing.

-Your calendar, 4 weeks from now, has arranged an intensive fundraising schedule.

3. Verbal Commitment

Early verbal commitment may not mean anything, but it helps.

A few months before my first round of successful financing, I met Dave McClure several times, he just founded 500Startups, I used to be a mentor for design & Community 500Startups, when another investor Alexis Ohanian also learned about my philanthropy, and then when the financing started, I found Dave and Alexis directly.

So just start looking for people who are most likely to convince or who can make different decisions (like angel investors rather than VC). If you have a meeting, it is good to have an investor verbally promising to vote for 50,000 to 100,000 dollars.

4. Selection mode

Investors, especially prominent investors, have "trading inertia", they deal with too many deals, they form a certain mindset, and they tend to find experience in successful companies: Harvard, MIT, Stanford, Google, Apple, Facebook, None of this is good for us, and if you don't have it, leave it alone.

I don't have a computer science diploma, and our founders don't have a degree in computing, we just happen to be called by Microsoft and then go to YC, so we have a chance to get in touch with a lot of investors, but we've been trying to prove that we're doing a good job and our team is passionate.

5. Establishment of financing amount

When a lot of hot startups are financing 750,000 to 1.5 million dollars, you say you want to raise 200,000 dollars, investors can't hear: "You're very good at using the money," they hear: "It's a small project so it doesn't need too much money to go further." ”

My first round of financing was 750,000, and I finally got 1 million. If you can't attract enough investors to reach a certain number, set a reliable amount.

6. Note that only investors who recommend not to pay

If your advice is also an investor, remember that he doesn't pay because he doesn't trust you, and if one of your famous investors just advises you not to pay, it will give other investors a bad signal, either get your sponsor to pay or simply don't pull them into the list.

7. Seed Investment Diffusion

After the seed investment, we gave the material to angel.co, who introduced us to thousands of investors, because some of the previous investors had verbally promised that we would be pushed to 65 investors in the first week, and I picked 60 investors for the next two weeks. More than 8 meetings per day (some investors have held more than two meetings). ）

From the 65 of investors who introduced us, we ended up refinancing by 10 investors, including big VCs, growing consortia, and very weighty angel investors.

I am one of the tens of thousands of entrepreneurs who have been financed, and one that is now being directed to the entrepreneur, from my perspective, I believe that most of us are willing to spare some time to help those on the road to entrepreneurship.

Via TC Source: http://leiphone.com/120529-keats-raising-seed.html