The 10 Most Common Fundraising Mistakes I’ve Seen From Helping 100+ Founders to Raise >$5B Dollars
Dec 22, 2021 | Business
I have helped 100+ founders collectively raise $5B.
The biggest insight: fundraising is a game.
If you know how to play, you can do well.
Here are the 10 most common mistakes founders make.
Mistake 1: Complicated Pitch
The average VC spends 3 minutes on a pitch deck.
Attention spans are shorter than ever, but consideration spans are still long. People lean in if they’re hooked.
So how do you hook them? Keep the pitch simple.
Mistake 2: Building Relationships Late
It’s hard to build a relationship with someone and ask them for money at the same time.
Instead, develop relationships early. Meet VCs, discuss your startup, share your progress. When you need to fundraise, you can then hit the ground running.
Mistake 3: Thinking It’s a One Way Street
Look I get it – when I was 19, I thought “why the hell would anybody give me money.”
Delete that thought. It’s a two way street—VCs earn the right to be on your journey.
Spend as much time picking them as they do evaluating you.
Mistake 4: Taking It Personally
You will hear HUNDREDS of No’s during this process.
It doesn’t necessarily mean there’s anything wrong with you.
It can be as much about your idea as it is about timing.
At the end of the day, you only need a handful of Yes’s to get moving.
Mistake 5: Not Being Authentic
A lot of Founders feel like they have to be something they’re not.
The best investors can see through that. And honestly, you’re going to be with this person for a long time.
Show your personality. Be an outlier. Be authentic.
Mistake 6: One Toe in, One Toe Out
Fundraising is a beast.
The Founders that do it the best treat it like a short term sprint.
This will take away time from operating the business. Accept it.
You need to give it full focus so you drive to closure as quickly as possible.
Mistake 7: Pre-emptive Celebration
The deal isn’t closed until the $ hits the bank. Too many Investors – especially in this market – say they’re in and then weasel out.
Keep the urgency up – every additional day the deal isn’t closed is another day it could fall apart.
Mistake 8: Namedropping the Crowd
DO NOT tell other Investors who you’re talking to if they are not committed.
VCs all know each other, and they will check with each other and you’ll be at a disadvantage. The best thing you can do is control the information flow and process.
Mistake 9: Hating Fundraising
If you want to build a venture backed company, you need to fuel the rocket.
Fundraising has made me a better storyteller, and that skill is so important in recruiting, hiring and inspiring.
Fundraising is a part of your job as CEO. Embrace it.
Mistake 10: Loving Fundraising
What? You just told me it was a mistake to hate fundraising.
It is. It’s also a mistake to love it too much.
Fundraising is necessary, but not sufficient, to startup success.
Don’t ever forget what the real job is.
And that’s it!
If you learned from these 10 tips, go check out my book Fundraising on Amazon.
I detailed all the lessons I learned working with hundreds of Founders to help them raise billions of dollars of capital. People have shared that it’s helped them short-circuit a lot of hard-won lessons, and that was my intention with the book and with this post. Good luck!