What I learned about fundraising during a pandemic
Unlike most posts, I hope this one isn't going to be useful to anyone within a few weeks - hopefully, we can all go back to normal. But for those of you out there raising right now, here's a few bits from how the seed round for Radical went.
When the COVID-19 mess hit London, I told my Co-founder Jackson - we either raise now or we have to wait this thing out. We weren’t planning on raising immediately: We wanted to spend a few months building some functionality. But waiting an unknown period of time seemed like too big a risk. “At the very least if this fails,“ I said, “we could never tell if it was because we suck at fundraising or whether it was the adverse conditions. We’ll have an ‘ego insurance policy’.”
We ended up being very fortunate and the fundraising went better than expected, with the main downside being that we had to disappoint a lot of exceptionally talented and close supporters that we couldn’t fit into this round. But this isn’t about self-congratulation - the actual work is building the company and product. So I’d rather focus on what I learned instead:
- The one advantage you have right now is that there are no face-to-face meetings, so there is no commute/wait in the lobby/order coffee overhead. I fit 7-8 pitches a day while spending 7 hours with our 2 year old so that my wife could work. Normally you can barely fit 3-4 pitches on a full day of work when you have to schlep between VC offices and angel meetings in coffee shops. That means you can make things move incredibly fast and create the momentum that absolutely seems to matter to raising effectively.
- Pitch worldwide! Since you will do all the meetings including the final investment committee (IC) online anyway, you don’t need to plan your round around geographies - leverage that to meet as many VCs as you can. We met funds on both US coasts, throughout Europe, in London and Israel - just over 20 in two weeks, on top of angels from all of these geographies.
- On how to get these meetings - this applies in better times as well: We started out with a list of about 300 relevant funds and angels that I collected from various sources. We then figured out who could intro us to whom using LinkedIn, and reached out to everyone we could for warm intros at once.
- VCs will often set a 30m meeting on the calendar but have an hour to spend with you if you're interesting: Don't schedule the next VC meeting right after the last one. Also leave time for the occasional loo break!
- That focus on squeezing as many meetings as possible into as short a time as possible means no time for changing your deck, though. Leave a day a week or some time on the weekend to aggregate feedback and make changes.
- Technology is the only conduit for passing info to your investors right now. So be on your A game in terms of tooling. Invest in paid Zoom, don’t use Google hangouts: Any browser-based video conferencing app means that when you share your screen to show your deck or demos it'll cover your video tab and you won’t be able to see your audience's faces and read their expressions. (This was actually impossible even in Zoom in the IC meetings with bigger firms that had more than a few people on the call...). Jackson got a lot of great responses about his neat home office setup. And of course - quiet room, be on time, good WiFi, have a very easy fallback to a phone call at the ready.
- No one really needed to hear 'why this is relevant for Coronavirus'. If you need that in your pitch I don’t think that’s a great sign. We don't know how long it'll last, and VCs play a very long game. Most wouldn’t want to feel like the pandemic was the reason your startup moved from ‘pass’ to ‘invest’ - so just don’t give them that reason in the first place.
- Use visuals to engage - you can't see if they're actually with you or on email while on the call. So share your screen and use that: Draw on it, show stuff, and keep referring to the stuff you’re showing. Your talking head can get quite boring, unlike in real life, and you need to ensure their attention doesn’t wander.
Fundraising is behind us so the next post will be about company building in a pandemic. But if you know a designer or engineer that wants to join a London-based startup reinventing team collaboration - let me kno