Seed Fundraising — The Basics of Meetings
Sometimes I meet founders who have done dozens of meetings with investors but have generated zero interest. People often struggle in fundraising because they’re ignoring the basics of meeting investors. Here’s how to be successful in your investor meetings:
Before the Meeting
At the seed stage, most products have minimal traction, so investors usually focus on the team as a determining factor. On a call, the investor may not be 100% focused on your pitch, it’s harder for you to read their reactions and very difficult to perform a memorable demo. In person, you have much more of an opportunity to show how good you are.
Don’t:
Don’t accept calls for first meetings with investors unless absolutely necessary, i.e. they can’t meet with you any other way for 4+ weeks.
Do:
Make most of your 1st meetings with investors in-person. If the investor prefers a call, use materials, like an email deck, to entice them into a face to face meeting. For investors outside of your location (or as a last resort), you can offer video chat as a backup.
During the Meeting
Fundraising involves receiving lots of noes, regardless of who you are or your company. Many founders struggle with the constant knocks to their confidence and can appear downtrodden in meetings. Confidence is critical to a good meeting but it’s easy to go too far and create an impression of arrogance.
Don’t:
Don’t brag about other investors you’re talking to — most will say ‘no’ and serve as negative references if contacted. Don’t get defensive when questions are asked or set near term deadlines for the round’s closing.
Do:
Describe your company’s product and wins with pride but stop short of predicting global dominance. Research the investor, so you can fuel the conversation early and explain why you think they can help, beyond a check. Be on time.
After the Meeting
Investors will say ‘no’ for all kinds of reasons, and often they won’t tell you the real reason. Most of the time you can discount the feedback from an individual investor. However, if the same tough questions keep coming up from multiple different investors, you’ll need to prepare for the next meeting.
Don’t:
Don’t ignore patterns in investor questions and provide reactive answers each time. Investors talk to each other a lot when considering investments, they are likely to share their primary questions and concerns.
Do:
Follow up after the meeting, thanking them for their time and giving answers to any outstanding questions. Track tough questions as they come up and when they’re repeated, prepare your answers in advance. Ideally, you’d have a slide in your deck’s appendix addressing the question. This serves as a visual aid for you and the investor, as well as demonstrating your diligent preparation.
Fundraising is already an extremely challenging environment, it’s almost impossible if you make basic errors. Meet in person, be humble, be prepared and you will give yourself the best chance of getting yeses in those early meetings.
This article is part of a series on Seed Fundraising.
1. When to Raise Money
2. How to Build a Deck
3. VCs vs. Seed Funds vs. Angels
4. How to Get a Meeting
5. How to Request an Introduction
6. How to Get Early Momentum
7. How to make a Good Pitch Great
8. The 5 Most Common Pitch Mistakes
9. Meeting Requirements
10. The Basics of Meetings
11. How to Handle an Angel Investor Meeting
12. Know these Numbers for your VC Meeting
13. 4 Investor Gotcha Questions
14. How to Follow-Up After an Investor Meeting
15. How to Close the Lead Investor
16. The 4 Stages of a VC Process
17. How to Raise a $2 Million Seed Round
18. Go from Investor YES to Cash in Hand
19. When Investors Say Yes but Mean No
20. When and When Not to Use an Investors Name
21. Stop Making These Common Fundraising Mistakes
22. How to Avoid Bad Terms that Kill Startups
23. What to do After Receiving a Term Sheet
24. Term Sheet Problems Part 1 — Money Talks
25. Term Sheet Problems Part 2 — Boardroom Blues
26. Term Sheet Problems Part 3 — Side Letters
27. 10 Traits of Successful Founders
Sterling Road invests in pre-seed B2B startups based in North America. Full process here: sterlingroad.com/process.
You can reach me here: ash@sterlingroad.com
Thanks to Kaego Rust and David Smooke for their help on this article.
Photo by Alexandr Podvalny.
