Fundraising: Dealing with No

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Most investors don't care about your startup and will either reject you, stall or lie to you. What to do?

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Fundraising: Dealing with No

  1. 1. FUNDRAISING: DEALING WITH “NO”!Benjamin Joffe!June 2013!PLUSEIGHTSTAR
  2. 2. Benjamin Joffe!•  13 years in Asia!•  Founder, +8*!•  Co-Founder, Cmune!•  Mentor, 500 Startups,Chinaccelerator, etc.!•  Angel investor!•  Speaker, Columnist!
  3. 3. Investment  Experience  •  10  investments  ($5k  to  $50k)  – 10  founders  convinced  me  to  give  them  money  – 100’s  did  not  •  Fundraising  – Cmune        Gaming      Atomico,  DCM  – Elysium  Space  Space  Burials!  Fundraising  now  
  4. 4. STARTUPS!PLUSEIGHTSTAR
  5. 5. STARTUPS  ARE  CONFUSED  A  startup  is  a  company  confused  about:  -­‐  What  its  product  is  -­‐  Who  its  customers  are  -­‐  How  to  make  money.  When  confusion  stops,  it  becomes  a  real  business.  Dave  McClure  500  Startups      This  plus  scale!  
  6. 6. THE INVESTOR’S PROBLEM:!CHOICE!PLUSEIGHTSTAR
  7. 7. GOOD  IDEAS  BAD  IDEAS  GOOD  IDEAS  THAT  LOOK  BAD  BAD  IDEAS  THAT  LOOK  GOOD  STARTUPS  ARE  HERE  
  8. 8. BY DEFINITION

YOU ARE DOING SOMETHING
THAT LOOKS BAD TO THEMAJORITY!
  9. 9. VC HEAR MANY PITCHES =
CHOICE + HEARD IT BEFORE!!
  10. 10. DEFAULT ANSWER IS NO!
  11. 11. MOST  INVESTORS  WON’T  CARE  ABOUT  YOU  
  12. 12. CONVINCE  (IMPROVEMENTS  +  PERSISTENCE)  FIND  MORE  TRY  TO  CONVINCE  VS.  FIND  THOSE  WHO  GET  IT  
  13. 13. THOSE  WHO  SAY  “YES”  “WHAT  KIND  OF  GIRLS  DO  YOU  LIKE?”  
  14. 14. SIDE NOTE:

COULD MEN BEBETTER PREPAREDFOR STARTUPS DUE TOTHEIR HABIT OFREJECTION?

(AND SALESPEOPLETOO?)!
  15. 15. YOUR PROBLEM:!DEALING WITH REJECTION!FINDING THOSE WHO SAY “YES”!PLUSEIGHTSTAR
  16. 16. DEALING WITH REJECTION!PLUSEIGHTSTAR
  17. 17. RED FLAGS & MOTIVATIONS!
  18. 18. WHEN  REJECTED  •  YOU  LEARNED  SOMETHING!  •  UNDERSTAND  WHY  (RED  FLAGS,  MOTIVATIONS)  •  IMPROVE  •  TARGET  BETTER  
  19. 19. 10 REASONSTO SAY
NO!
  20. 20. NOT US COMPANY!(= C Corp + based in US)!1  NO  WE  DON’T  DO  NON-­‐US  DEALS  HOW  WILL  I  DO  MY  TAXES?  
  21. 21. UNPROVEN!2  NO  BY  DEFINITION  ALL  STARTUPS  ARE  UNPROVEN…  SO  IT’S  LIKELY  SOMETHING  ELSE  
  22. 22. NO TRACTION!STILLHERE!3  NO  TOO  EARLY?  
  23. 23. NO DIFFERENTIATION!LEADER   YOU  4  NO  
  24. 24. LIMITED UPSIDE!(Valuation? Market? Exit?)!5  NO  FACEBOOK  AT  IPO?  
  25. 25. NO PROOF PEOPLE WANT YOUR STUFF!6  “In a startup,
no facts exist
inside the building,
only opinions.”!Steve Blank!“MAKE SOMETHINGPEOPLE WANT”NO  IS  THIS  THING  A  THING?  
  26. 26. MOREREASONS TO
THINK NO
AND LIE TO YOU!
  27. 27. REMEMBER  “S.H.I.T.S”  SHOW  HIGH  INTEREST  THEN  STALL  RISK  IS  REDUCED  WITH  TIME.  STALLING  PAYS  OFF  FOR  INVESTORS    
  28. 28. CAN’T!UNDERSTAND!YOU!THEY!SPEAK!ENGLISH!IN!WHAT?! 7  NO  
  29. 29. DON’T LIKE YOU!8  NO  GUT  FEELING  “HE  LOOKED  LIKE  MY  EX”  
  30. 30. KITCHEN REMODELING!(= no cash)!8  NO  (OUR  FUND  IS  ON  ITS  6TH  YEAR)  
  31. 31. SPOUSE DISAGREES!9  NO  “PERSONAL  LP”  
  32. 32. NOT COOL ENOUGH!(what will I tell my friends?)!10  NO  CAN’T  TALK  TO  EVERYONE  ABOUT  YOU  
  33. 33. TEAM CAN’T EXECUTE!11  NO  GOOD  PLAN,  NO  ACTION  
  34. 34. FINDING THOSE WHO SAY “YES”!PLUSEIGHTSTAR
  35. 35. IT  TAKES  A  VILLAGE  YOU  WILL  NEED  ALL  THE  HELP  YOU  CAN  FIND!  
  36. 36. THE  LEADS  ARE  WEAK?  YOU’RE  WEAK!  Source:  Glengarry  Glen  Ross  YOUR  JOB  IS  TO  MOVE  THE  BALL  FORWARD  AND  MAKE  GOOD  USE  OF  YOUR  TIME  
  37. 37. pitching  Source:  Glengarry  Glen  Ross  TELL  EVERYONE  WHAT  YOU  DO  AND  WHAT  YOU  NEED  
  38. 38. BFF  =  BEST  FOOT  FORWARD  
  39. 39. BEST  FOOT  FORWARD  •  1  clear  phrase  about  you  (problem  you  solve)  •  The  MOST  SOLID  THING  YOU  HAVE  – Team  from  Google?  – Sold  a  startup?  – Crazy  high  retenion?  – You  figured  out  viral?  – Users  pay  lots?  – Interviewed  100  clients?  
  40. 40. INVESTORS  ARE  AFRAID  •  MISSING  OUT  (“FOMO”)  •  LOOKING  LIKE  FOOLS  •  FEELING  BAD  (your  reacion)  •  LOSING  REPUTATION  PASSION,  COMMITMENT,  EXPERIENCE  MAKE  INVESTORS  FEEL  YOU  WILL  TRY  HONESTLY  
  41. 41. CONSEQUENCES  Ask  for  money,  get  advice  Ask  for  advice,  get  money  GET  TO  KNOW  PEOPLE  BEFORE  ASKING  FOR  CASH  (OR  A  KISS)  
  42. 42. SEDUCTION  MECHANICS  Social  proof  Confidence  Not  needy  LOOKING  NEEDY  IS  UNATTRACTIVE  
  43. 43. MVC = Minimum Viable Credibility!
  44. 44. EXAMPLE:  ME  •  10  INVESTMENTS  BUT…  •  2  TIMES  LEAD  – Both  from  friends  (1  year+)  – First  one  (5  years  ago)  I  knew  nothing  – Second  one  (now)  I  am  helping  fundraise  A  FIRST  INVESTOR  THAT  OTHERS  RESPECT  HELPS  A  LOT  
  45. 45. SUMMARY  1.  ALWAYS  BE  PITCHING  2.  BEST  FOOT  FORWARD  3.  REDUCE  RED  FLAGS  4.  UNDERSTAND  MOTIVATIONS  5.  ASK  FOR  ADVICE  6.  FOCUS  ON  THOSE  WHO  GET  IT  
  46. 46. THANKS!!benjamin@plus8star.com!@benjaminjoffe!

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