What founders should do when starting to fundraise

Here is a quick list of things that founders should do when starting to fundraise:

1. Does my pitch resonate?

Ask founders who’ve previously raised in your sector about your chances of raising. Don’t know anyone like that? Do cold outreach to founders on LinkedIn. Do many outreaches; eventually, you will find people to help you. If founders tell you your pitch won’t resonate with investors, you should ask why and what could be done differently.

2. Pitch resonates, then what?

Create a list of VCs who specialize in your sector. Just google for “gaming vc list.” Use a spreadsheet to list and track your fundraising process. I have such lists on EGD, just google for “EGD News #109 — Success in fundraising”

3. Talk to actual investors

Pitch a few VCs and get feedback on questions: is it the right time to raise? What needs to happen to raise? You might hit the jackpot and get several VCs interested quickly. If that happens, move on to point 5.

4. Iterate your pitch

Improving the pitch will help investors to understand your company better. VCs are busy people, and they might overlook important details in your company, the market, and the capabilities of the founders. Ensure to highlight the essential details, but don’t clutter your pitch with obvious stuff.

5. Run the process

If you get an investor interested, ask them to share a term sheet indicating how much they will invest and at what kind of valuation. If they are a smaller investor who can’t lead the round, ask them to help you find a lead. Founders should optimize for the best valuation to an extent, but the best thing to optimize for is the value the investors add. Do reference checks with founders who’ve worked with the investors. Make sure you partner with the right people.