How to raise venture capital without losing your mind in 4 steps
✅ Step 1: Figure out how much you need to raise
Figuring out how much you need to raise is crucial because you may need less capital than you think. You will have a Plan A (how much you need) and a Plan B (the bare minimum). Your Plan A is a function of how much you need to hit the milestones you need to get to your next round. To do that, you need to understand the promises and the metrics you need at each round. The earlier the round, the more the investor is investing in the founder and not the idea.
✅ Step 2: Nail your 1-minute pitch
The constraint of having to pitch your company in 60 seconds is a forcing function for actually defining what you actually do. That's because it forces you to use concise and simple language to get to the root of what your business does. This is not only a communication exercise, it's an introspective exercise as well. I’ve seen founders pivot their entire idea on the basis of not “feeling” their 60-second pitch. There's a hidden power in succinctness.
Your 60-second pitch should be versatile. It will be something that you can pitch to investors and also tell a friend at a cocktail party. Jargon is your enemy here. Remember that investors can't invest in things that they don't understand.
✅ Step 3: Build a killer deck
Your deck is a crucial fundraising tool. It needs to be visually appealing, educational, and interesting. Aim for about 10 slides. You can get started with this free template: https://www.edriziodelacruz.com/resources
✅ Step 4: Build a process
First, you rank investors into three tiers. Tier one represented the top five or so elite funds—those with the best reputations that wrote the biggest checks and moved the fastest. The second tier involved lesser-known funds that still moved pretty fast. Finally, the third tier comprises low-hanging fruit you are not too serious about. Start at the bottom with tier-three funds and use those to practice your pitch. Then move to tier two. If—and only if—you achieve success (i.e., term sheets or partner meetings) within these tiers, move up to the big leagues.
Second, you try to get in front of them. Investors don't respond to cold emails, but they do respond to warm intros. The best source of warm intros are CEOs in the portfolio of that investor. So look up all the top CEOs in your favorite investor's portfolio and grab a coffee with them. Build true organic relationships and then ask for advice (not intros). They will organically offer their help, and likely intros will follow.
✔ Here is a free template: https://docs.google.com/document/d/1_TQybgBhc80MDtr52V-WGzmmz-JeRKNv3EziH1a7dvE/edit?usp=sharing
