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Margot Schmorak is the co-founder of Hostfully, now in Cohort 8 and she is in the middle of intense funding round for her startup. We asked her to share with us here top 5 things she learned while raising her first round of funding.
Here are five things I wish I would have been able to stick to better when fundraising. They may seem basic, but they are easy mistakes that I’m sure many first-time fundraisers face. I hope they’re helpful.
1. KISS: Keep it Simple, Stupid.
The easiest trap to fall into is to overcomplicate what your business is about. Investors want to know how you’ll make money and why you’ll make a lot of it. If you aren’t talking about this within the first 30 seconds of your presentation, then you’re overcomplicating your story.
2. Investors want to invest.
Yes, it feels really weird to ask someone else for money, but remember that investors see your business as an opportunity. Don’t ever be apologetic about your ask – be excited to grant them a chance to join the success of your business.
3. Feedback from Friends = Not Always a Good Thing.
My Co-Founders and I have broad networks so we initially began speaking with investor friends and getting their feedback. But we found that if they’re not the specific type of investor (company stage and industry) their feedback could actually do us more harm than good. Everyone wants to help, but if the feedback is misguided then it can set you back in the process. Choose the feedback you act on wisely, and you’ll improve faster.
4. Be Humble and Prepared to Throw Everything Out.
Your job is to fundraise. If it means throwing out a piece of your story that used to work well but doesn’t any longer, do it, and quickly. Storytelling is an art and a science, and you have to be open to major changes in how your present your business. Changes may happen based on your progress, the market, your competitors, or even the investor. Keep your eyes open to feedback and your ego checked at the door.
5. It’s a Numbers Game.
Fundraising takes three things: a great business opportunity, a great story, and a great pipeline of investors. Learn where your story is working and why. Learn where your story doesn’t work and stop spending time there. Maximize your odds of success by keeping your pipeline full and continually increasing the quality of investors on your target list.