How Do You Become The 1% That Gets Funded?

“How many crappy startups are there?” I asked Dave and Alain, two partners at the VC fund where I was an EIR (Entrepreneur in Residence). We had just sat through another pitch from a hopelessly lost CEO.

“Too many,” Dave said and we all laughed. Then Dave continued, “And remember, these are the companies we meet with face to face. There are another two companies we don’t meet with for every company we do meet with.”

Image for post
Image for post
Picture: Depositphotos

I just shook my head.

Yes, it should be hard for you to get funded.

This isn’t high school football, only the best of the best get to the pros. And it’s the same for raising money. Only the best of the best startups will get funded.

So the better question you should be asking yourself is what do you need to do to give yourself the best chance of getting funded?

Now that were entering a recession driven by COVID-19, the bar has gotten even higher. So instead of wasting energy on what’s wrong with Venture Capital, you should focus on improving yourself and your company.

Let’s assume you have a company that’s in a segment that VCs are active in. The maybe you should look at…

A. How well you are executing.

It’s like, Erwin, one of my potential Series B investors said to me, “You’ve done everything you said you would do.” Erwin had passed on us during our Series A fundraising (remember, there’s always another round), but we’d executed our plan, and that wasn’t lost on him.

It will not be lost on your potential investors either if you execute your plan. Then…

B. You should always be prepared every time you meet with a potential investor.

Think about how refreshing it will be for a VC to meet with you if you have a great company that is executing your plan and you’re prepared for the meeting. You’ll be the exception, not the rule.

So rehearse a little bit. No, scratch that. Rehearse like crazy, and really come prepared for your meetings. Research the partner you’re going to meet with, and…

C. Make sure you make a positive impression fast.

So make sure you explain immediately why your company is significantly better than any competitor. Make sure you explain immediately what your company does. And make sure you explain immediately how big the opportunity you are chasing is.

You don’t have time to gradually build your story. You have to get there in maybe seven seconds or less. Oh, make sure…

D. You only bring team members that are going to add value.

Remember, your goal is raising money, not appeasing the egos of your cofounders and executives. That means you might need to leave a few people back at the office. Finally…

E. Have your backup slide deck at the ready.

That’s how you keep the momentum going, and that’s how you become that one company in one hundred that gets funded.

For more, read: How Do You Extend Your Runway Before Raising Money?

Written by

I work with startup CEOs to help them grow their businesses . I built several businesses from $0 to >$100M. Learn more at www.brettjfox.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store