7 Tips to Increase Your Fundraising Odds Right Now
Picture this: It's a sunny afternoon and I'm sitting across from a budding entrepreneur, who is brimming with enthusiasm and has a sparkle in their eyes. They've got a vision for a game-changing SaaS platform that they believe is going to shake up the industry. It's moments like these that remind me why I love my job. The spirit of innovation is infectious, and I can't help but feel a rush of excitement.
But as I listen to their pitch, I can't shake off the voice of experience whispering in my ear. Caution, be careful! Wait! Not that! And occasionally, yes to that!
Of course, when you're pitching, you're just getting one person's perspective, and the truth is normally bigger than any single perspective. But that little conversation inspired me to put pen to paper after hours, and share some hard-earned learnings with you. I'm hopeful that something here might be a compass for anyone starting their journey, or maybe even a gentle reminder for those already on their way to refine their focus even more.
Now, these tips reflect my own battle scars, and let's be real, I've tripped up on every single one of them. So please know that this is coming from a place of raw honesty and shared struggle. Sure, many businesses come out on top despite these hurdles—so don't sweat it if this list seems daunting. Remember, it's the entrepreneurial journey, with all its bumps and twists, that's the real prize.
Here are the 7 things I felt during our conversation:
1. Understand Your Addressable Market Deeply: Don't just dip your toe in—dive headfirst into understanding your addressable market, like its size, diversity, and any hurdles you might face. Don't learn your market so you can defend its size to investors. Learn your market so you can really understand what they want. Keep your nose to the ground and don't stop learning. In this case, I got the feeling the market felt smaller and less homogenous than our entrepreneur friend believed.
2. Avoid Confirmation Bias: Make sure you really get your potential customers, and that's gotta be through conducting unbiased research. In this scenario, it seemed like our entrepreneur's understanding was based on just a handful of interviews that tended to lean in their favor. I didn't feel like they were getting a holistic perspective on the customer. Keep in mind, confirmation bias—hunting for info that only backs you up—is a no-go and won't help you scale with confidence.
3. Validate Assumptions with Data: Always back up your assumptions with data. Personal opinion is probably the least trustworthy way to make decisions, but often the one that entrepreneurs trust the most. When I presented conflicting data, this entrepreneur seemed to shift their stance and be persuaded towards my bias. This made me feel like they hadn't really found confidence in their strategy. You gotta feel steady and backed up in your assumptions before you move forward and make sure you can point to data to defend your position.
4. Anticipate Resistance to Change: Brace yourself for potential pushback from customers, especially if you're dealing with industries or processes that have been followed for many years. Most people are resistant to change. Our entrepreneur didn't seem to fully grasp the possible resistance their new offering might face. And when I pushed back on it, they didn't have a thoughtful approach for how they were going to handle this in CS (Client Success).
5. Be Wary of Too Many Pivots: If your business model is like a game of dominoes, needing everything to fall in the right order to hit the "big opportunity," then you might need to go back to the drawing board. This entrepreneur's game plan seemed to bounce around, raising a few red flags about whether they really could sequence the opportunity. There were several bets that needed to be true for this opportunity to work out for investors.
6. When Pitching Stay Curious: Use some of your pitches as a practice run to tweak your idea. Listen and learn from fundraising chats, and don't be afraid to fine-tune things. Of course, that's hard to do when you're also supposed to be confident, and assertive, but you should be able to find the balance. Answering questions with: "I'd have to take a look at that data," or "I'd need some time to contemplate that," are fine responses. Be upfront and open to feedback on your initial strategy, leveraging your experience to better match up with the market realities that are exposed during your fundraising.
7. Ensure Your Vision is Clear: Your vision for your product's future has gotta be crystal clear and persuasive, especially if you're raising capital. And even if you're not, you'll need to persuade your team and yourself when the going gets rough. In this case, our entrepreneur's future vision was a bit foggy, leaving me scratching my head about the venture's potential outcome.
To wrap things up, remember that the path to entrepreneurship is super tough. Of course, you shouldn't be able to get all of this stuff perfect right away. Don't let this discourage you. Every successful entrepreneur has faced their share of challenges and came out stronger on the other side.
The most important thing is to stay curious, keep learning, and keep refining your vision and strategy. Because let's face it, the world needs more innovative thinkers and doers like you.
The entrepreneurial voyage, with all its highs and lows, is SO much fun. Your adventure awaits, and I, for one, can't wait to see where it takes you. Let me know how I can help!
Reese