Business 20 December 2019
Fundraising isn't always fun. It can be a long, agonizing, and often emotional process. Emails go unanswered; pitches fall on deaf ears; and many times investors just don't get it. This constant feedback loop (or lack thereof) can be taxing on even the most seasoned pro and can push founders to believe that they have to change and become more aggressive, tougher, and do anything possible to get to that yes. Don't fall into this trap. Here's how to remain true to yourself and feel confident in your own story and pitch.
Don't "play the part" of a founder.
Founders come in all shapes and sizes, so be the real you during the process. It's very uncomfortable to pretend to be something you're not, and it becomes nearly impossible to live up to your potential because you're so focused on keeping up with the facade. It all goes back to trust. If you're inauthentic, people won't trust you. And without trust, there is no relationship. I know I always invest in people first, businesses second. Research shows that our instincts tell us to ask ourselves two questions when we first meet someone, "Can I trust this person?" and "can I respect this person?" We look to a person's warmth and competence to answer these two questions. And a big part of earning someone's trust is doing what you say you are going to do. If you walk away from an investor meeting with action items, make sure to follow up quickly.
Set a communication schedule.
The back and forth, uncertainty, and just plain silence can prey on your nerves, and it can be easy to let your annoyance seep into email communication. Take emotion out of the process by creating a follow-up checklist and communication schedule. For example, Day of meeting/coffee: Send a thank you email with actionable next steps. If no response one week later: Reiterate next steps. If still no response, wait one more week and write confidently something to the effect of, "I wanted to give you a brief fundraising update. We have great investors who have come on board (name them) and I am looking to close the round in xx days/weeks. I would love to have you be a part of this round. Please let me know if there is any additional information you need to make a decision." If they don't respond to this email, mark them as a NO on your investor tracking sheet and move on. Use simple, strong language to keep your irritation at bay.
Look for the small wins.
We know what big wins are after a pitch meeting, but it's just as essential to look for small wins to help you get ready to refine and try again. Sometimes an ah-ha phrase will emerge from the meeting, and your small win is that you picked up on a new way to communicate your message that will be more impactful. Other small wins: get an intro to an investor that may be a better fit or to a potential customer, or it may turn into an advising relationship. These are all parts of the process and appreciating the small wins will help keep you on track. If you go into fundraising with a growth mindset, it will make the whole process so much more enjoyable. Also have your eyes wide open that there are going to be a lot of no's, but look at every single no as a learning moment or an opportunity to gain a small win. Also, listen to what they're saying: What's holding them back from saying Yes?
Be confident in your value.
Remind yourself that you are offering investors the chance to be part of this amazing company—you're not begging for money. Build your confidence by paying close attention to your successes in life and how you accomplished them—you can't argue with facts. In my book, The Myth of the Nice Girl, I share the story of how I developed my own evidence-based confidence. Not too long ago, I was giving a big speech to three hundred managers and was really nervous. A close friend told me to think back to a time when I gave a good speech. I visualized that speech and recalled how I prepared for it, what I said and how I said it and it made me feel far more confident. To develop your own evidence-based confidence, start to write down moments when you've created value or earned a big or small win. Ask yourself these questions: 1) When have I done something difficult and survived? 2) When have I made a solid pitch? 3) What process have I used when making successful decisions?
Focus on the interests of both parties.
Spend time learning about the investor ahead of the meeting so that you can make a personal connection. I appreciate when a founder starts the meeting by referencing something about me personally. It's a basic human need to be acknowledged and it works in fundraising too. Experts also agree that using empathy is the best way to get a win-win outcome—and improves the relationship between the participants. To do this, focus on the interests of both parties—the things you are each trying to change or create. What does the investor stand to gain from funding your company? A big payoff, maybe. But what about the factors beyond the specifics of your business plan? Are you bringing them exposure to a new demographic? A new geographic area? Are there other investors already on board that this investor wants to do business with?
When they go low, stay high.
The sad reality is, there are [insert negative word] investors. When the person on the other side of the table isn't playing nice, your first instinct may be to mirror that behavior. Don't. Instead of becoming defensive, ask yourself: Is this someone I want on my team anyway? Yes, fundraising is about products and money and financial returns, but there is also a human factor—you're letting people into your world that you are hopefully going to be in a long-term relationship with. A big part of being successful at fundraising is partnering with people that have the same values and goals as you. Do your due diligence on the investor—check with past founders. You're giving up ownership and control in your company, and you want to make sure that your investors' goals, values, reputation and track record match up with your own. Do they have a good track record in my industry? Do they have a great reputation for the way they treat founders and partners? Ask yourself how you feel after meeting with the investor? Is this someone you will feel comfortable asking for advice? Never compromise your values for a check.
4 min read
One of the few things I remember from grade school biology is the concept of tropism. In plain language, tropism is the reaction of a living thing, like a plant, towards a stimulus like sunlight or heat. You've likely seen this before but just didn't recognize it for what it was. If you've ever seen the leaves of a potted plant bending towards a windowpane, that's tropism in action. The plant is bending towards the sunlight.
If you've ever seen the leaves of a potted plant bending towards a windowpane, that's tropism in action.
In our everyday lives, we are all inundated with stimuli throughout the day. The driver in front of us that stalls at the yellow light and zooms through the red light, leaving us behind to wait. Or the customer service rep that leaves us on hold for an ungodly amount of time, only for the call to prematurely drop. There are so many examples both common and unique to our individual lives. The trouble begins when we form the habit of responding to everything — particularly negative stimuli. By doing this, our mental peace is disrupted and diverted making us slaves to whatever happens to happen. Much like the plant bending towards sunlight, we oftentimes react and lean into whatever is happening around us. Now take that concept and multiply it by the number of things that can happen in a day, week, or month. What happens to you mentally with so many emotional pivots?
For me, the result is: Restlessness. Anxiety. Sleepness. Mindless Eating. Everything besides peace of mind.
Much like the plant bending towards sunlight, we oftentimes react and lean into whatever is happening around us.
Earlier this year, something pretty trivial happened to me. I'm sure this has happened to you at some point in your life also. I was walking through a door and, as I always do, glanced back and held the door longer and wider than normal for the person coming behind me. My gracious gesture was met with silence — no thank you, no smile, not even a nod. I remember being so annoyed at this travesty of justice. How dare they not acknowledge me and thank me for holding the door? After all, I didn't have to do it. I know I spent the next few hours thinking about it and probably even texted a few friends so that they could join in on my rant and tell me how right I was to be upset. In hindsight, I should not have allowed this pretty petty thing to occupy my mind and heart, but I did. I let it shake my peace.
I've since taken some classes on mindfulness and what I've learned (and I'm still learning) is the art of being aware — being aware of the present and my feelings. Recognizing when I'm triggered towards annoyance or anger gives me the opportunity to take a step back to understand why and assess whether it deserves my attention and energy. We're all human and having emotions is part of the deal but as mindful adults, it's critically important to choose what you're going to care about and let everything else pass along. There are several tools on the market to help with this but the Headspace app has really helped me in my mindfulness journey. The lessons are guided and coupled with some pretty cute animations.
Recognizing when I'm triggered towards annoyance or anger gives me the opportunity to take a step back to understand why and assess whether it deserves my attention and energy.
Over the course of the next week, I'd like to challenge you to pay more attention to your reactions. How aware are you of how you allow your environment to affect you? Are you highly reactive? Do you ruminate for hours or even days on events that are insignificant in your life? If so, practicing a bit of mindfulness may be the way to go.