After 100+ VC meetings and going through the process twice, here are 5 things I wish I’d known about VC fundraising before I started 👇🏾 𝟏. 𝐏𝐢𝐭𝐜𝐡 𝐯𝐢𝐬𝐢𝐨𝐧 𝐎𝐑 𝐭𝐫𝐚𝐜𝐭𝐢𝐨𝐧, 𝐧𝐨𝐭 𝐛𝐨𝐭𝐡 We were doing $100k ARR when started our pre-seed raise, but I still got all no’s from the first 40 investors I pitched. Everything changed when I started to pitch our vision instead of our traction. Early-stage companies don’t have historical data to show investors. This is an advantage because it allows you to pitch on vision. Talk about what the world looks like if your company is successful and how you get there. When I started doing this, I noticed investors started to perk up. VCs want to fund big ideas, so make sure you talk about that in your pitch. 𝟐. 𝐘𝐨𝐮 𝐩𝐫𝐨𝐛𝐚𝐛𝐥𝐲 𝐰𝐨𝐧’𝐭 𝐜𝐡𝐚𝐧𝐠𝐞 𝐚𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫’𝐬 𝐦𝐢𝐧𝐝 Investors typically know in the first 5 mins if they’re going to invest. If you get a no, don’t try to change the investor’s mind because you probably won’t. Knowing this, be careful with the investors that you meet with. If there’s one that you’re excited to pitch, hold off on that pitch until later in your process so you can get the reps you need to master your pitch before that meeting. 𝟑. 𝐆𝐞𝐭 𝐭𝐡𝐚𝐭 𝐟𝐢𝐫𝐬𝐭 𝐜𝐡𝐞𝐜𝐤 Every investor you talk to will say they “invest with conviction.” That is a lie for 99% of VCs; they invest when someone else has already invested. If you can, fundraise in stealth and get a commitment from someone before you start to raise more openly. If you can tell investors that you’ve only been raising for a week and 20 or 30% of the round is full, they’ll sit up. Annoying, but true. 𝟒. 𝐖𝐡𝐞𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐬𝐡𝐨𝐰 𝐲𝐨𝐮 𝐭𝐡𝐞𝐲’𝐫𝐞 𝐧𝐨𝐭 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐞𝐝, 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐞𝐦 If you have to follow up more than once, they probably aren’t interested. All of our investors have closed in 2-3 meetings. We had one investor schedule a follow-up call two days after our first, and then offer to invest on the spot during that second call. Whether they’re interested or not, you’ll know based on the investor’s actions. 𝟓. 𝐑𝐞𝐠𝐚𝐫𝐝𝐥𝐞𝐬𝐬 𝐨𝐟 𝐰𝐡𝐚𝐭 𝐟𝐨𝐥𝐤𝐬 𝐬𝐚𝐲, 𝐭𝐡𝐞 𝐛𝐞𝐬𝐭 𝐰𝐚𝐲 𝐭𝐨 𝐠𝐞𝐭 𝐚 𝐦𝐞𝐞𝐭𝐢𝐧𝐠 𝐢𝐬 𝐭𝐡𝐫𝐨𝐮𝐠𝐡 𝐚 𝐰𝐚𝐫𝐦 𝐢𝐧𝐭𝐫𝐨 You can try with applications and cold emails, but the best way to get a meeting with an investor is still through a warm introduction. It’s a problematic practice for a lot of reasons - not the least of which being that it makes it harder for underrepresented founders without connections to raise - but it’s just how it works. More than anything, I’ve learned that fundraising is a process. If you treat it like so, you’ll have success. if you don’t, you won’t. #fundraising #venturecapital #blackfounders
Thank you for always sharing your story and providing tips - being human first above anything else.
Alex Svystun
8mo
Venture capitalists want to fund big ideas that will bring them profit in the long run. Therefore, having a global vision is only essential if financial indicators support it. Otherwise, you won’t get far on ideas alone.
Tom Wood
8mo
It's a story.....take them on a journey that leads to wealth and success, just throw in some credibility along the way
Adam Roberts
8mo
Nice list, Toby Egbuna 💰 I'd add that once you move into raising openly, stack your investor meetings into a short time window— even if this means pushing initial investor meetings out a couple of weeks while you get more intros. Doing so helps drive urgency.
Dom Crockett
8mo
Number 1 really helped me. I've been feeling uninspired and I realize that I was focusing too much on the traction data too early. Need to re-connect and re-commit to the vision! 🎖
Bobby Dyas
7mo
Thanks for posting
This was helpful. Thanks.
making door-to-door cross-border shipping of vehicles & heavy goods as easy as booking a flight online | Founder/CEO, Awele
8moThanks a lot Toby for the great insights as always. Do you think it will help your audience more if you give more contest (e.g., your fundraising round, angels/VCs, etc) ?