Track your progress with this fundraising checklist
Fundraising is all about generating momentum by getting social proof and creating fear of missing out (FOMO). The more investors are talking to you (momentum), the more investors are saying yes (social proof), the more investors want to talk to you because other investors said yes (FOMO).
To be successful, you need to meet with as many investors as possible in the shortest amount of time.
Fundraising is a full-time job. Do not start raising money until you can dedicate yourself exclusively to fundraising for 3-6 months.
The best way to connect with any investor is to get an introduction from their portfolio startup founder. The more founders on your network = more intros = more meetings.
Start growing your network 6-9 months before fundraising. Attend industry-related events or use networking platforms.
Try to meet 1-2 founders per week. 2 founders per week * 9 months = 72 potential referrers.
More on warm intros: How to get warm introductions?, Warm intro templates.
Set fundraising goals
- Target amount. How much money do you want to raise?
- Valuation. How much equity you're going to give away?
- A target amount is a number, not a range.
- The terms should be the same for all investors. Do not adjust your target amount/valuation for different investors. It will start off your relationship with investors with bad terms on a bad foot. If you oversubscribed, raise a second round with different terms.
- Setting your goal too high or too low might scare off investors. Check fundraising benchmarks for your industry and stage before setting your goal.
Incorporate and prepare SAFE notes
Say an angel wants to invest in you. You need to follow up with a SAFE immediately after the meeting, so she/he can sign it and wire the money the next day.
If you want to move quickly, incorporate and prepare your SAFE note before fundraising.
You can find SAFE note templates and tools for incorporation here.
Build a pitch deck
- Build the initial version of the deck. Do not spend too much time on the deck. Try to finish it in 1-2 days.
- Get feedback ASAP. Pitch your advisors/friendly investors. 5-10 pitches should be enough.
- Update your deck.
- Learn your pitch by heart.
Updating the deck is an ongoing process. You're going to change your deck almost after every meeting — as you get more and more feedback.
The deck is not the only thing you'll need in investor meetings. Make sure to prepare a product demo and FAQ as well.
Step 1. Build your investor pipeline
Reaching out to investors that don't invest in your industry at your stage is a time waste. Building a target list of investors is the very first step toward successful fundraising.
To get 100-150 meetings, you're going to need 200-300 investors on your list.
Main lead sources:
- Ask your friends and advisors if they know any relevant investors.
- Find investors online (Crunchbase, Angellist, Linkedin, Twitter).
Save investors to a CRM or a spreadsheet.
A guide on finding investors online: How to find investors?
Shizune can build your investor pipeline for you. Check it out:
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Step 2. Get meetings with investors from your pipeline
Once you've finished building your target investors list, it's time to connect with investors and get meetings with them.
There are two ways how you can get meetings with investors:
- Warm intros. Guide: How to get warm introductions?
- Cold emails. Guide: How to cold email investors?
Try to get warm intros to all investors on your list. Use cold emails as a last resort.
Sequencing meetings the right way helps you build FOMO. Reach out to investors in batches:
- Friends & Family - almost 0 work but allows you to start fundraising with some money closed already.
- Angels - move faster than VC funds, and the chances of getting yes are higher. Some angels might even offer you a check in the first meeting. Angels can introduce you to other angels/VCs.
- Angels with domain expertise signal to the market that people from your industry are involved.
- Top-tier angels give you tons of social proof and can introduce you to their broad network. Connecting with top-tier angels might be challenging, and chances of getting yes are lower, so get some investors on board (especially industry experts) first.
- VC Firms - move slow but write big checks (they can lead your round). The chances of getting yes are the lowest, most firms will pass on your company. Having angels with domain expertise and top-tier angels on board increases the chances of success.
- Be polite.
- Dictate when you can meet to investors. Otherwise, you won't be controlling your calendar and will fail sequencing meetings properly.
- Ask for 15-30 minutes, not 60.
- Offer emails as an alternative to the meeting. Some investors might want to know your better before jumping on a call with you.
- Remind investors about the call one day before the meeting.
See meeting scheduling templates here.
Always block 30-45 minutes after the meeting. You'll need this time for:
- Update your deck.
- Follow up or send something.
- Update your investor CRM
- An investor might want to dive deeper into your company, and you'll need to extend the meeting.
Step 3. Meet with investors
Most of the meetings will follow the same scenario:
- Pitch and Q&A
- Your questions about the investor
- Next steps
A guide on running investor meetings: How to run an investor meeting?
Step 4. Follow up & close the round
Follow up after all meetings. Do it immediately after the meeting. Pre-write your follow-ups to save you some time. All templates: Follow-up templates
No / too early
Thank you again for your time and for the feedback. It was great tot meet you!
If you don't mind, we'll keep you updated on our progress and hope to be able to work with you in the future.
Keep these investors updated about your progress, as they might want to join your round when it's closing.
Yes (regular check)
Send an email following the Handshake deal protocol.
According to the protocol, you have a handshake deal if and only if the following happens:
- The investor says “I’m in for [offer].”
- The startup says “Ok, you’re in for [offer].”
- The startup sends the investor an email or text message saying “This is to confirm you’re in for [offer]. This offer is valid for 48 hours, please confirm acceptance. You agree to fund your investment no later than 10 business days from the date of your acceptance of this offer.”
- The investor replies yes.
When an investor has clearly committed to investing in you, ask for help:
- You need more meetings — ask if the investor knows any relevant investors. Ask for intros to investors from your funnel.
- You need help convincing existing investors — share the list of investors and ask which of these the investor can talk to.
- You’re “overfunded” and need to choose what investors to pass on — ask for feedback on investors that want to join the round.
Yes (large check)
Do not commit to large checks in the meeting. Otherwise, you may find yourself in a situation where you want to work with a different investor but can’t take their money because you already committed to taking the large check, and there is no space left for them in your round.
Ask investors offering large checks what allocation they want. Tell them that you’d love to work with them but need to figure out allocations. You’ll have 2-3 days max to make the decision and get back to them.
Email all investors you met with (even those who passed). Let them know that your round is closing in the next 48 hours. You’ll be surprised how many investors will want to join your round because of fear of missing out on a hot deal.
Once you've got all offers, finalize the allocations. Every situation is unique, but here are a few things that might help you with making a decision.
- Ask your co-founders/advisors/current investors/board members for advice and feedback on the investors that want to invest in you.
- Ask investors joining your round for feedback on each other.
- Do a reference check. Talk to founders of their portfolio companies and ask for feedback on investors.
- Research investors online.