Questions

When are you ready to go after funding?

We're not launched yet, but plan to be very shortly and then ramping up our customers / sales. I am attending a tech conference in August and am unsure if I should be actively seeking funding while I am there. Is it okay to introduce myself / the company even if we aren't ready for funding so that when we are, those connections have been started? What metrics should we be focusing on before trying to get funding? I have heard that I should be making between $5-10k monthly before looking. Is this reasonable? Any advice is greatly appreciated.

3answers

I disagree with Sal's answer that you shouldn't be pitching at conferences. I built a good chunk of my early network doing exactly that. To be clear though, Sal is right that most investors hate being "pitched" at a conference and that's because the vast majority of founders do it completely wrong. The right way is to selectively identify people that are attending that conference by screening them for relevancy and interest.

It's your job to know who is in the room and to find the people most likely to be excited about what you're doing. The right way to do this is to use a combination of LinkedIn, Twitter, AngelList and Google to map attendees to relevancy of your company. You're looking for prior operational interest or successful investments that have similarities but not competitive overlap to your own business. Approaching them with a relevant and respectful opening line that makes it clear you know what they're about is a great way to start. And then either they will ask you what you're doing or you can find the opportunity to explain what you're doing. If they take interest, say that you'd love to reach-out and talk more in a few weeks time.

The most important thing is not to press hard on closed doors and don't waste their time or yours trying to squeeze a square peg into a round hole.

The founders job is to be always raising awareness and building an army of people that are excited about and potentially helpful to the company at all times. As to the metrics that matter, Sal is correct that without knowing what kind of company you have, it's impossible to provide a useful answer to that specific part of the question.

Happy to talk in more detail anytime.


Answered 5 years ago

It's a very broad question without knowing what you are doing (market / problem / solution) and who is doing it (what expertise / skillset you have in the team). To say that you should have 5-10K in revenue would be wrong for a consumer app (like snapchat or frontback) but it would completely relevant if you were running a marketplace like etsy. What you do and how you do it matters. Showing up at a conference and pitch by-standers is most of the time not a good choice (especially if that's what everyone will be doing that). Investors take seriously founders who get to them via their network. If you approach Dave McClure at at a conference he might be polite to listen to what you have to say for 2 minutes but he has made it clear a number of times not to try to pitch him at events. Instead approach a founder who works with McClure, get his attention and convince him that what you do is awesome. Then ask him to intro you to McClure / in the meantime you would have also learned from such founder what are the minimum requirements to get any interest from McClure. Happy to provide more details.


Answered 5 years ago

Most entrepreneurs spend way too much time trying to raise money vs running their business. Especially now that the cost of starting up and failing is so low, you should do everything you possibly can to get cashflow positive w/o outside investment. When you don't NEED investment that's when you're ready. You will spend less time raising more money at better terms.


Answered 5 years ago

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