{"id":6066,"date":"2014-02-16T13:00:00","date_gmt":"2014-02-16T18:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=4770"},"modified":"2020-03-30T19:09:07","modified_gmt":"2020-03-30T23:09:07","slug":"wish-knew-raising-seed-round","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/wish-knew-raising-seed-round","title":{"rendered":"Eight things I wish I knew before raising a seed round"},"content":{"rendered":"

Minutes before the first meeting of my startup\u2019s seed round, a wise advisor pulled me aside. \u201cThis is going to be wild,\u201d he warned, with a knowing smile. \u201cBrace yourself.\u201d<\/p>\n

Several months later, after raising $850,000 for my startup, ReelGenie, the ride has stopped (for now). I hopped off the fundraising roller coaster with memories of unexpected thrills, a few bruises, and many lessons for the future.<\/p>\n

Here are eight things that I know now that I\u00a0wish<\/em>\u00a0I\u2019d known then:<\/p>\n

1. Network like there\u2019s no tomorrow.\u00a0<\/b>You never know where you\u2019ll meet a future investor. ReelGenie\u2019s investors include professors of mine from years ago, former co-workers, and individuals who I met at an event and loved spending time with. Put yourself out there. Unless you\u2019re already rich and\/or famous \u2014 and if you\u2019re reading this article, that\u2019s probably not the case \u2014investors won\u2019t just flock to you.<\/p>\n

2. Cast a wide net, smartly<\/b>. Most people you talk to will say no. So play the numbers game. The more potential investors you speak with, the higher your chances of success. But I say that with two caveats. First, do some homework so you\u2019re targeting people who are likely to love your deal, rather than wasting time with those who won\u2019t. Second, stay organized. Keep track of every communication you make. If you can\u2019t convince an investor that you\u2019re equipped to handle fundraising, good luck convincing them you can run a company.<\/p>\n

3. Seek out points of validation.\u00a0<\/b>If I never hear the phrase\u00a0herd mentality<\/em>\u00a0again, I\u2019ll be a very happy man. But the reality is that\u2019s how fundraising works. Investors don\u2019t want to be alone if the ship sinks. Lock down a few smart investors early. Get early adopters and evangelists for your funding, just like you do for your product or service. And find a lead investor. He or she doesn\u2019t have to put in the most money, but a respected investor running the process will give others more confidence in your deal and help speed things up.<\/p>\n

4. Find investors who can do more than just write a check.\u00a0<\/b>Chances are you\u2019re relatively inexperienced and going up against competitors with deeper pockets. So how do you tip the scales in your favor? Use the fundraising process to find helpful advisors. The best investors are those who can give you strategic guidance, make introductions, and write a big check (today and in your future rounds). Not all investors are good for your company. This is especially true\u00a0in the current environment of the Series A crunch<\/a>. Plan a few steps ahead. Your fundraising goal should be to find long-term partners, not a short-term cash infusion.<\/p>\n

5. Valuation is what the market will bear<\/b>. Just because your friend raised $5 million at a $15 million pre-money valuation doesn’t mean that you should too. Investors are willing to pay what they think the company\u2019s worth, so don\u2019t set yourself up for disappointment. Securing ample funding for your company should be a higher priority than your dilution. With that said, shop around. Don\u2019t accept the first offer. The earlier you start fundraising and the less desperate you seem, the better your chances of getting multiple bids \u2014 and a valuation you\u2019ll be excited about.<\/p>\n

6. Don\u2019t let fundraising take over your business (or your life).\u00a0<\/b>As the CEO of a company, your first priority is running the company. It\u2019s not rocket science, but it\u2019s hard to keep that perspective when fundraising season rolls around. The emotional strain is inevitable. One day you\u2019re riding high off a great meeting, the next day you\u2018re sadly marveling at how many different ways someone can tell you no. It\u2019s important to put your blinders on. Set aside time for fundraising each day. If you do, you will get things done. Finding customers and motivating your employees will come more easily. As your metrics improve, so will your odds of raising money and your valuation.<\/p>\n

7. You can raise money outside of Silicon Valley.\u00a0<\/b>Most of our investors are on the opposite side of the country, in Washington, D.C. Listening to entrepreneurs, you\u2019d think raising capital is harder than getting a bill through Congress. It\u2019s not.\u00a0As Tech Cocktail recently reported<\/a>, the D.C. angel scene is alive and well. And there\u2019s money to be found in your city, too. You don\u2019t need to move to the Valley. But you do need to be tenacious in networking (see #1) and understand what investors in your area are looking for. Tailor your pitch to your environment. And if that doesn\u2019t work, hop on a train or a bus to meet with investors in other cities. Now more than ever, capital is mobile. You should be too.<\/p>\n

8. Say \u201cThank you.\u201d A lot.<\/b>\u00a0One of my favorite books is Robert Fulghum\u2019s\u00a0All I Really Need to Know I Learned in Kindergarten<\/i>. Twenty-five years (and two degrees) after I graduated kindergarten, it\u2019s amazing how the simple lessons of life haven\u2019t changed. Remember, investors are deciding whether to give\u00a0you<\/i>\u00a0money. A great business plan is worth less if you\u2019re a jerk. So be thoughtful. Say thank you when someone makes an introduction or takes a meeting. Follow up. Be a giver, not a taker (and\u00a0read Adam Grant\u2019s fascinating new book<\/a>\u00a0to learn what that means). Put a personal touch on every call or email. By simply being polite and respectful, you\u2019ll give yourself a leg up in fundraising, if not in all aspects of your business.<\/p>\n

The\u00a0Young Entrepreneur Council (YEC)<\/a>\u00a0is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched\u00a0StartupCollective<\/a>, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.<\/p>\n","protected":false},"excerpt":{"rendered":"

Minutes before the first meeting of my startup\u2019s seed round, a wise advisor pulled me aside. \u201cThis is going to be wild,\u201d he warned, with a knowing smile. \u201cBrace yourself.\u201d Several months later, after raising $850,000 for my startup, ReelGenie, the ride has stopped (for now). I hopped off the fundraising roller coaster with memories […]<\/p>\n","protected":false},"author":1097,"featured_media":34346,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-6066","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nEight things I wish I knew before raising a seed round<\/title>\n<meta name=\"description\" content=\"Minutes before the first meeting of my startup\u2019s seed round, a wise advisor pulled me aside. \u201cThis is going to be wild,\u201d he warned, with a knowing s\u2026\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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