I was recently with an entrepreneur and talking with him about his fund raising process. He was in a later-stage financing round and was talking with many investors.
Some started asking him for very specific analyses to be completed on his data and wanted his company to crunch the numbers. I told him he shouldn’t bother and that it was likely a junior person at the firm whose job is was to find holes in the data/narrative.
I told him,
“I know we don’t yet have a term sheet so you feel you need to listen to everybody’s request. But imagine you were expecting two term sheets imminently. How would you act then? If you don’t act like that now then everybody will smell it — even if they don’t acknowledge it to themselves.”
And my specific response that I recommended was to say,
“I can send you our standard data pack but honestly I have too many other firms asking for customized data and we simply can’t send each person custom reports. If you’re further along in the process and you have one piece of information you need for a final decision then I’d be very happy to talk to you about it then.”
Another entrepreneur was recently in my office. She had emailed with a partner at a big VC fund and he had passed the request to a junior associate. That in itself can be fine in some cases but that associate then asked for a phone call instead of an in-person meeting? I recommended that the founder politely cancel the call because we had other great firms actually taking meetings.
“If you’re willing to take a call then you’re signaling that you have no confidence in your process given you already have other in-person meetings. Tell her that you’ll gladly bring the deal back to that firm in the next fund raising round but that you need to prioritise your time for firms where partners have already had in-person meetings.”
This isn’t rude — it’s just respecting your personal time and your fund-raising process as much as you’d respect the VCs time. So she called the associate, cancelled the meeting and the young associate came to visit her office that very day.
Why? How Was I Sure That Would Happen?
I told the founder, “No associate in his or her right mind would want to tell a partner that Sequoia funded this deal and the reason we didn’t see it is because I set up a call instead of an in-person meeting.” I knew she’s come see you.
Of course, you have to be careful with this. You have to be sure that you’re actually qualified to raise VC, that you CAN get other meetings and you have to be very polite when you state your reasons why their request doesn’t work.
But confidence is CRITICAL in fund raising. Investors are human and humans want what they can’t have and what they perceive other people want. It’s human nature — just read Cialdini and others on this topic. We don’t think we work that way, we do. If you don’t act in demand, people will subconsciously know you’re not in demand.
The same thing happens to VCs. We have consultants who do research for super big funds who invest in VCs and they have checklists they want you to fill out in order for them to do their work.
I find it infuriating because it asks such basic questions that they could find out themselves but they want you to do the work.
I think it’s a smokescreen. I know bigger firms sometimes hire people just to fill out the data but I mostly refused.
I told them,
“We’re already over-subscribed in our round. If you want to invest we might make room but we don’t have time to fill out forms for every consultant. If you want to come visit us you’re welcome to.”
Of course if they did some initial work and were leaning in to make an investment then we’d spend time helping them. But they had to show they were committed. I was self-confident enough to turn them away if they didn’t do work.
There is a delicate balance between confident and arrogant and of course the former is what you want. You have to realize that every VC has had hot deals come through their offices that they had to chase hard to try and get into because they “knew” everybody else was chasing.
VCs will literally drop everything else they’re doing when they’re in that situation. It’s the gold standard you’d love to strive for, but very few deals ever get that “hot.”
But if you can bottle up just a little bit of that feeling, if you can channel just an ounce of your best FOMO juice and if you’re willing to accept taking just a few more self-confident risks in your process — it will go a long way.
[This post by Mark Suster appeared first on bothsidesofthetable and has been reproduced with permission.]
The post Why Confidence is So Important in Fundraising appeared first on Inc42 Media.
Intelehealth: Orissa-based Intelehealth, founded by Neha Goel, has developed an open-source telemedicine platform that empowers health workers to facilitate teleconsultations with remote doctors.
Involve Learning Solutions Foundation (ILSF): Chennai-based ILSF, founded by Divanshu Kumar, envisions to create an affordable and accessible ecosystem that empowers students towards self-driven learning and personal growth. They train and mentor senior school students (Educators) in their formative years of age 12-16 to teach their juniors (Learners).
Change With One Foundation: Delhi-based Change With One Foundation was founded by Kiran Verma to solve the blood donation shortage challenge by connecting the nearest available suitable blood donors with blood seekers in just a few seconds.
Lakeer: Hyderabad-based Lakeer is an urban governance initiative focused on making Indian cities more livable. Founded by Dipika and Varun, the team is building a GIS data and decision-support platform that helps visualise liveability at the ward-level using 36 indicators.
Samagra Empowerment Foundation: Pune-based Samagra makes toilets accessible, affordable, and aspirational for the urban poor. Samagra was founded by Swapnil Chaturvedi. Its SmartLoo uses a unique combination of IoT sensors and affordable hardware (like auto flushing controllers etc) to convert any existing public toilet into a smart toilet.
Pi Jam Foundation: Founded by Shoaib Dar, Pi Jam Foundation provides access to affordable open-source hardware/software that reduces entry barriers for experimentation and promotes global knowledge sharing. The Pune-based startup is enhancing the quality of computer education by developing a curriculum that fosters essential skills through a hands-on STEM (Science, Technology, Engineering & Mathematics) approach.
Alohomora Education Foundation: Delhi-based Alohomora creates opportunities for students in 11th-12th standards to develop a career plan after the 12th standard. The startup, founded by Divakar Sankhla and Parinita Jain, uses tools such as Internet literacy for self-learning and reflective practices, app-based learning, data analytics to focus on learning outcomes for each student, and virtual networks for learning.
Aquasafi: Pavin Pankajan’s Aquasafi works with village communities (panchayat, cooperatives, SHG, etc.) on a partnership model to set up water treatment units in villages. The Bengaluru-based company installs automated remote monitored water treatment units that do not require full-time operators.
