Creator Venture Accelerator

CVA009 → Fundraising Etiquette for Creators

Most of what I can say can be already found here.

The strongest point in that article is that once you're in fundraising mode, you are absolutely in Fundraising Mode. Separate from Creator or Early-Stage HoldCo Founders, there are thousands of stories of incredibly visionary traditional founders that had a difficult time fundraising because venture capital fundraising should be a window. 

Working with Creators for a number of years, here are some common best-practices that are absolutely essential to having a good fundraising process. 

Here they are, in order:

1. Show up to your fundraising meetings

I love starting with this one because it is, by far, the most common malpractice from Creator founders in Creator fundraising history. If we are going by the Insight, First principle from Approaching Fundraising, you'll know that VCs, specifically, take interest in the individual moreso than the product at the earliest-stages. Not showing up to your own meeting is a missed opportunity to do the difficult things like: 

1. Taking questions. Showing up to your meetings lets you learn first hand the reactions of your prospective investors and learn misconceptions or potential improvements for your pitch. 
2. Being picky. Investors are a multi-year relationship. This is actually 10x the case for a HoldCo fundraise. That individual is going to have exposure to everything you do in your business for X number of years. Minimum five. You need to vet 1) who they are 2) what their intentions are 3) if you literally like them.                 
   • You need to do this. 100%. 
   • Here are some questions to help you figure out investors.

2. Make a Tracker

VCs love to do this thing where you have no idea on if it's a "fundraising meeting" or just a regular meeting. Getting an investor on the phone is an accomplishment always, but when you're someone with proven influence, it is even harder to know if they just want to meet someone with influence or they want to give a Creator investment.

!!! I created a Tracker Template here.

That tracker can be useful for HoldCo or subsidiary raises. Some credit to this to my old boss on that. 

!!! Here are some Perspective Creator Investors to get at before they do.

I didn't get their permission (yet) to get them all in one list, but the ones that I know have made at least media investments AND ones that I know have an active Creator practice are on there. 

There are tons of resources on how Fundraising works, generally. The truth is that VCs, good and bad ones, work on their own pace. Every fund has their own organizational norms. For your convenience, here's how the dance typically goes: 

1. An intro. Someone intro'd you, you intro'd yourself. 
2. Book it. Use a Calendly, make it within the next week. Use your EA. 
3. First Meeting. NOT AN INTRODUCTION. The VC is introducing themselves, sure. But you are NOT. Regardless of if this is a casual conversation, know that this is what they're thinking about in their heads: 

4. Second Meeting. They're digging into metrics. More questions. You're going to send over whatever they want. This might be the point where you send over Financials. 
5. Third Meeting. If they're interested. You're going to know right here. You'll be meeting maybe multiple partners.

Go for Actions.

In that tracker, there's a key on the progress on each individual investor relationship. These are what we'll call Actions. What Investors ask for are called Action Items. While this might seem like an overkill to some, this is actually crucial to get this fundraising process through in a timeline respectful to yourself and your own team. This time could be best spent growing the company, so make it worth it. 

Actions can be: 

1. Intro
2. Next round
3. Diligence
4. Investment

Action Items can be: 

1. Sending over:                
   1. A deck
   2. Financials
   3. Customer reviews (if you have that)
2. Coming up with:                
   1. Obscure things that might not seem important to you, but seem pretty important to this investor. Expect for these to mostly be around data. [Editor's note] For early-stage, this isn't as relevant.

Do the Action Items to get to the next Action. Be proactive.

3. Put your Contact. 

At the end of the deck, you need to present some contact that's accessible to perspective investors. This is a no-brainer to most, but I get a lot of emails or I get a lot of DM's is not the route to go for Fundraising Mode. 

In Diligencing Investors, there are best practices for before, during and after an investor meeting. Once you make your decision to take the call, you've triggered what the Tracker would consider an Action.

Hire someone if you have to.

This process isn't easy and can get overwhelming. Get whoever helps you with organization of important things (financials/accounting, scheduling, etc.) to help you. Here are ways they can help you. 

Have them BCC'd or CC'd on every email to keep track of 1) when Action Items are requested or needed by 2) when Actions happen.

4. Present as a Founder

This was mentioned in Approaching Equity, but one piece of real estate that Creators rarely use to really put gas on fundraising is using their Distribution to get real-time feedback from their audience on the direction of them (their company) in the next stages. This real estate can be: 

1. Featured Video on your Page
2. Forum conversation on your Reddit
3. Tweeting it. 

As always, if you have any particular questions, feel feel to reach out to em@pre-founder.com.