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Fundraising Advice From Dan Martell #4: Raising the Round

After meeting with all of your top prospects, you should have a good idea who was the most receptive to the business and the best possible option for fundraising. Of course, all of this information should be conveniently stored in your investor list to make it easy to track.

As part of your decision to raise money, you should know how much money you need to close your round. Throughout this process, you will have been tracking the likely amounts of money you might receive from each investor. When the amount of money you can raise exceeds the amount you need to raise, flip the switch – you are officially raising now.

You want to reach back out to each of your top prospects (big money first remember) with a meeting where you want to say this magical phrase:

“It seems like you are interested. I am not asking for a commitment but just curious about your level of commitment since we are closing on August 15th and we need to figure out the composition of the round”

Commitment is investor-speak for understanding how much money they are willing to put into your company. August 15th should be replaced with whatever date you have chosen for your fundraising timeframe. It should be six weeks from the decision where you flipped the switch to officially start raising. Choosing a six week window signals that you are confident it is going to close. The words “figure out the composition of the round” signals to the investor that you will be oversubscribed and no investor wants to be kicked out of a round.

When your investor(s) express interest in investing and provide a level of commitment, then follow up with wire information and your term sheet. Don’t feel like you need to wait until the end of the round. Do not let investors make their investment conditional on others joining the round.

If the investor asks for a copy of your slides or powerpoint (which you didn’t bring right!) then it usually means no. Dan doesn’t recommend sharing your deck with investors since no one can sell the company nearly as well as you can. In responding to the investor who wants your deck, ask what specific questions they have so that you can answer those specifically rather than sending a generic deck.

You may also want to consider giving some well known angel(s) some extra equity because they can help quarterback the fundraising efforts with you. The well known angel can also convince other investors simply by committing to the round.

One more thing for you to remember – investors need you. They have no business unlessthere are entrepreneurs. Once you really believe that you are going to make money for an investor, bring that confidence into the meetings with your investors. Good luck and let us know how you make out!

Fundraising Advice from Dan Martell #1: Building a List of Investors 
Fundraising Advice from Dan Martell #2: Setting Up Meetings with Investors
Fundraising Advice from Dan Martell #3: Nailing the Meeting

Check out Dan’s blog here, maple butter: a startup blog for founders up north!

@mikekirkup