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When an investor passes, most of the time, their answer will be some derivative of “not now”. This means you should keep them updated, as they may want to be an investor in a later round. Here’s a template to keep those investors updated on your startup’s progress — with the hopes of having them invest later.

Update Template

Hi [Investor Name],

I hope all is well with you and family. [Personalized message]. Despite the pandemic, Acmecorp has seen some incredible growth in 2020:

  1. Over the last 6 months we’ve averaged 36% monthly growth and we’re approaching $300k ARR.
  2. We now have 12 customers with a strong pipeline for Q2 2021 (up from 6 last quarter). Here’s a recent case study from [Customer X] on how Acmecorp is changing their business [link to pdf/blog post]. …


Today, we’re talking about including fancy animations and multimedia in your pitch deck.

My general advice is to avoid this, as it often takes quite a bit of extra work to create and embed media that will work correctly in your pitch deck and given you rarely control all the variables for the audience — internet speed, laptop quality, sound system etc — there’s a really good chance the exciting outcome you’re hoping for is replaced by a distracting and jittery experience. This does not leave a positive impression for the investor.

Instead, I would urge you to keep the deck very simple. You can send the videos of a demo or other animations separately, and have a much better chance of a good experience for the viewer and thus more interest in investing.


Hello everyone. Today, we’re talking about getting help from your investors.

“Let me know how I can be helpful”.

You will likely hear this now famous phrase or something similar from your investors. The problem is that very few founders actually take their investors up on the offer. Don’t do this. Your investors are ready to be put to work helping your company grow faster, so let’s take advantage of that. Here’s some ideas to get you started

Fundraising — this is the most obvious. Before you start raising your investors can help with pitch feedback. …


Today, we’re talking about fundraising momentum. Generating momentum matters in fundraising, no matter what stage you’re at.

The easiest path is to first ask your existing investors (or supporters) to commit to the next round. You can incentivize this with the guarantee of a place in a potentially competitive round or a small discount on the investment. Getting your insiders to commit helps you generate momentum immediately and that will pressurize the new investors you pitch; as they know you need their money a lot less, given all of your insider support.

This tactic also helps prevent false starts in your fundraising. If you can’t get commitments from your existing investors, it may be too early to approach new investors.


Today, we’re talking about leveraging small checks to find a lead for your seed round.

The most common mistake founders make when raising a seed round is to focus solely on finding a lead investor. If you go after small checks, they will help you build momentum with their shorter processes and checks that quickly add up BUT also the introductions to other investors they can provide.

You may be able to generate a lot of fundraising leads on your own but remember There are 100s of new seed funds created every year, there’s a good chance your angel investors or micro VCs are connected to a bunch that you wouldn’t have considered or found. Go to them at the beginning of your raise, and one of your new, smaller investors, may provide the intro to your ultimate lead investor.


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The PlanGrid Founders in 2011.

In November 2018, PlanGrid, a SaaS startup in Construction, announced they were acquired by Autodesk for $875M. When reading about this kind of huge success for a startup, it’s easy to forget their humble beginnings. When I first met the PlanGrid founders in 2011, during Y-Combinator, the future was anything but certain. Here’s how they got started and made their first $1M in revenue.

Usable Product

Unsolved Problem — The founders had worked in construction and experienced firsthand the major issue with blueprint drawings: every major construction project had to be on paper. …


Today, we’re talking about how large customers can change your strategy. When you’re just getting started a large customer with deep pockets can seem understandably attractive.

If big customers are your target market, great but if you’re more focused on small or medium sized businesses — you should be careful. Large customers, that account for a majority of your current revenue, can easily become your focus. They will have different integration, support and uptime needs vs smaller customers and providing all of those things takes time and stops you building for your actual target market.

Unfortunately, you will have to decide between Large Enterprise customers or Small and medium sized businesses. It’s hard enough for a startup to win one of those markets, let alone trying to attack two concurrently.


Today, we’re talking about delivering bad news to investors.

I know it’s hard but please don’t delay giving bad news to investors or stake holders. That will only make it worse. Most investors are grown ups, understand the risks and will accept bad news BUT they hate surprises.

If you’re upfront about the problem — who knows — maybe the investor will have some suggestions. And, if you keep them updated, they will get see you face this obstacle. Demonstrating resilience is a great way to get more money from your investors.


Today, we’re talking about a phrase founders hear a lot during seed fundraising: “I’m in, if you find a lead investor”.

A lot of founders take this as a yes. Unfortunately it’s not a yes or even a soft commit. You should treat it as a no.

When you go back to these investors with a lead, the most common feedback is something like — “sorry, we can only participate with a top tier lead. we’re not familiar with your lead”.

If you do you get a great lead investor, they will bring their friends to fill up the round — removing the possibility for this ‘waiting’ investor to follow once you get a term sheet. Now, any investor with experience would know this — that’s why you have to treat it as a no. …


Today, we’re talking about dealing with lots of investor interest. If you’re lucky enough to be in a position of strength and getting lots of inbound demand for your fundraise — that’s great — but it’s easy to let the inbound emails you’re receiving dictate your process.

Now, the risk of an unmanaged process is one investor will get ahead of the others and give you a term sheet early. Then you could be under a lot of pressure to accept terms or an investor which are far from ideal.

A position of strength means we have a shot at getting the very best investors, so be sure to do the outreach to your top list and spend time with those you like. Having multiple conversations approaching their close, with people you want to be involved, will make it much easier to make a good decision in a pressurized situation.

About

Ash Rust

Pre-seed Investor. Email: ash@sterlingroad.com. B2B, US only. I work with founders for 3 months before investing. More info: http://SterlingRoad.com/process

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