He raises his hand to ask a question in a room full of women. It’s a Female Founders & Funders event yet he’s the only one with his hands up.
“How do founders go about setting a valuation for their company?”
My hand immediately shot up in the air. Simultaneously I thought, “Most entrepreneurs won’t even get to this step of the fundraising process. Yesterday, a client was just asking, ‘how do I even get a conversation?’”
It was my turn. I knew the answer, yet I knew the audience needed some answers. “What are the immediate first steps entrepreneurs who want to raise money need to do to get the ball rolling?”
It was a great question, and other attendees let me know that.
In Fundraising, Play Offense, Not Defense
I know there are a lot of people out there totally cut out to fundraise. Yet, they are unsuccessful.
The statistics are abysmal.
BUT, I’m really sick of pitch coaches and storytellers that will only help put your lipstick on. They don’t actually help get you a date.
I’m tired of these meet-ups that are focused on the unimportant parts.
Another guy, another meet-up. He raises his hand to ask, “Do investors prefer an LLC , C-Corp or S-Corp and should I create them in Delaware?”
My eyes nearly rolled to the back of my head. It’s a good question, but in the hierarchy of important questions about fundraising, this one is pretty low.
A male investor colleague of mine leans over, “These questions are stupid. Are you playing offense or are you playing defense? Legal, Insurance, Agreements…they’re all things to consider. These are all defense tactics when in the early stages they should be on the offense.”
Investors aren’t Gamblers
In entrepreneurship, we sometimes overlook the value of relationships in helping open up opportunities for ourselves. Yet, investors source the majority of their deals through their networks and look for founders who have strong Rolodexes in their industry.
Personally, I earned my role to perform due diligence for investors because I focused on how I could help them first. I also secured my position as the first female strategist at Temple’s Innovation & Entrepreneurship Institute via a 6-year relationship with the amazing Ellen Weber.
Successful entrepreneurs know that investors are people, not gamblers, and a founder’s primary goal is to build a solid relationship first before asking for money.
Read more of my thoughts on building trust and relationships to raise your first round.