Alicia Syrett '07 is the Founder and CEO of Pantegrion Capital, an angel investment vehicle focused on seed and early stage investments. She currently serves on the Board of New York Angels and is a recurring panelist on CNBC's PowerPitch. A former entrepreneur, she now works actively with a number of startups on their advisory boards and speaks often in the startup ecosystem. Follow her on Twitter @aliciasyrett.
1. Be a thought leader. By speaking, writing, and organizing events actively in your startup community, you can attract investors organically by demonstrating your depth of knowledge in your area of expertise.
2. Research investors before contacting them. Understand their preferred level of involvement, industry focus, geographical preference, typical check size, and valuation range. Talk to other entrepreneurs they have invested in for tips. Remember that your relationship with them may be 10 years or more (longer than the average marriage!), so fit matters.
3. Focus on finding local investors first. They can make introductions across strategic areas (e.g. investors, employees, partners, accountants, lawyers, etc.), help fundraise, attend meetings, help you get speaking engagements and press, and serve as references. Be careful about chasing big investor names; they are solicited often, and the odds are much lower you will catch their eye, especially when you have to travel to get their attention.
4. Make use of your alumni network. Your school and fellow alums want you to be successful, so reach out to them and ask for help. They may provide advice and introductions, and some may even decide to invest!
5. Involve your advisors in fundraising. Bring them to meetings with you if it is helpful to project an image of gravitas. Involve them in the process by sharing information and updates so they have a chance to pitch in and help you succeed.
6. Know the best funding structure for you. Investigate all the options (e.g. angels, VCs, loans, crowdfunding, etc.). It may not make sense for you to offer equity in your company, so be sure about the right structure before you ask for money.
7. Think of every meeting as an opportunity to advance your company with an investor, whether they invest or not. Investors are often highly influential and accomplished people. They may be helpful in spreading the word about you or sharing strategic opportunities.
8. Remember that the process is always in your control. If you do not feel like the investor is the right fit for you, you do not have to proceed with conversations. By recognizing this early, you may save yourself critical time by avoiding unnecessary due diligence requests.
1. Expect a check at the end of a first meeting. Due diligence processes often take weeks or months of exchanging information. Focus on building a relationship with the investor. You want to make sure that this is someone you can potentially work with for a decade.
2. Send cold emails. Get a warm introduction through a trusted contact. Most investors are inundated with random solicitations, so your cold email will likely be deleted. An introduction from a close connection will set you apart and increase your chances of getting attention and being funded.
3. Expect investors to respond during holidays. Investors often travel with their families in late December/early January period, and many do not hold meetings during August at all. Time your contact so that you have their full attention.
4. Post controversial content on social media. Savvy investors are always looking for red flags and reasons not to fund you. If you share content containing negative, incendiary information, you can kiss that check goodbye.
5. Think money solves all your problems. Pouring lots of money into a bad idea just delays the ultimate failure of the business. Make sure you have proven the concept first. Show how you will spend the money wisely in supercharging existing growth.
6. Be slow to respond to due diligence requests. Anticipate the questions that investors will ask and have all of your documents ready. This will speed up your fundraising process and ensure investors that you are organized and responsive.
7. Be discouraged if the initial answer is NO. If an investor declines to fund you, they have not necessarily rejected you forever! You can make progress on their feedback and revisit the opportunity to speak with them at a later date.
8. Forget that you are competing with other entrepreneurs who are currently fundraising. Be honest with yourself about how attractive your startup is compared to others, and make sure you proceed only when you truly believe you will stand out from the crowd.