How to raise your Seed round 101 — Chapter 5: Fundraising from an Investor‘s Perspective

This story is part of the “How to raise your Seed Round 101” which is actually divided in those Parts:

• Chapter 0 — How to raise your Seed Round 101 — Intro
• Chapter 1 — How to raise your Seed Round 101 — The Plan
• Chapter 2 — How to raise your Seed Round 101 — Craft your Fundraising Materials
• Chapter 3 — How to raise your Seed Round 101 — Stuff to know
• Chapter 4 — How to raise your Seed Round 101 — The attitude to adopt
• Chapter 5 — How to raise your Seed Round 101 — Fundraising from an Investor‘s Perspective (what you are reading right now)

Even though you got the entire process to raise your Seed Round, you ll still need to deeply understand your Investors state of mind if you want to succeed.

The idea is to reverse engineer the Fundraising Process of an Investor.

The twin fears that torment investors?

The fear of missing out that makes them jump early, and the fear of jumping onto a turd that results

What are they looking for?

• Great team in the most important ! “chemistry with founders”
• Solid idea or product is an important, prerequisite
• A company in a growth sector
• Solving a practical and real problem
• Strong network effects and first-mover advantage
• Metrics matter — know signals of consumer adoption
• Early traction and working beta product
• Good elevator pitch — keep it simple
• Decisiveness — often tested in building team
• Exec summary is important as a door opener
• Don’t over-negotiate or dwell on terms — get back to building a big company!
• Intellectual Property does matter
• Hire ahead of needs and do backdoor references
• Understand the success rate
• Distribution and business development are always important — Sales!

What type of founders are they looking for?

• Decisiveness — often tested in building the team
• Do not procrastinate
• Be proactive
• Clear vision — entire team understands direction and mission
• Team and team builder as CEO
• Passion
• Flexibility on idea and morph constantly
• Good listeners — strong-willed but flexible
• Reliability and responsiveness
• Move fast, sweat logistics — the devil is in the details
• Execution is everything-make mistakes but learn from them
• Trust your gut, make decisions
• Over-communicate with everyone — the team, investors, customers, users…
• Hire aggressively ahead of needs
• Lead by example — 24/7, no distractions

Just read this book

To get fully into the mind of an investor, I deeply recommend you to read Venture Deals, Be Smarter than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson

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