A few months ago, my mom told her friend’s son that I “get money from investors all the time”. That has never been the first thing that comes to mind about my previous jobs, but I liked how she made it sound so easy and attractive. In reality, the process is entirely the opposite (time consuming, distracting, and exhausting), and it is especially hard when you’re just getting started. After years in the startup world, I’ve seen too many founders give up before giving themselves a real chance.
The difference between those that make it through the inflection point and those who quickly go back to their corporate jobs is resilience.
Resilience isn’t binary. We all fall within a spectrum of how quickly we can recover from negative events. Some say it’s a skill and some say it’s a muscle, but in any case it allows us to navigate unpleasant situations easily and return to our previous emotional state faster. Think of all the rejection emails you’ll get when fundraising and whether they will bring you down or whether you’ll just take it as part of the process. In my own journey, I’ve developed a few ways to make sure it’s the latter.
1) Get ready for a long journey
As soon as we leave our jobs, we start stressing about proving to ourselves and our friends and family that we “can do it.” We let that pressure drive our journey and we start getting really impatient right away. Before you decide on artificial timelines, talk to as many entrepreneurs that have gone through your same journey recently. When I did that exercise, I realized it takes over 100 investors contacted and between 8 to 12 months for first-time founders.
Think of really successful startups like Classpass or Pinterest and then read about their founders’ journeys before they became famous. I was mind-blown when I realized most of them took years before they took off (years!). Finding product market fit is a process that takes resources and perseverance. And even when your first product is well received, if you don’t iterate you’re leaving a much bigger opportunity on the table.
2) Remember that what you see is all curated
You become an entrepreneur and you start following tech news, other VCs on Linkedin, and already successful entrepreneurs. By design, they all publish the positive highlights without getting into the hardships before they got there. That makes it sound too easy, so we start engaging in negative self-talk the minute things don’t start shining for us. Going back to the story about my mom, I probably only tell her the highlights so she thinks “I get money from investors all the time”. Just like that.
3) Fundraising is no different than selling
When we sell, we need to acknowledge the competition and figure out our value proposition. Instead, I’ve seen many founders read on vc websites “we back great founders” or “we’re founder-first”, and get really excited. After all, if we didn’t think we’re great founders we wouldn’t be doing this. So with a strong sense of confidence, we email them and expect them to come back with encouraging words. Then we get discouraged when we don’t hear back for weeks.
Good investors will always prioritize great founders, but on their websites they also state other requirements we tend to dismiss. The main one is early validation or traction. Their job is to de-risk their investments, so when they receive thousands of pitch decks they’ll prioritize the ones that have a more stable revenue stream. Think of it from the perspective of a buyer. Would you buy an existing product with good reviews, or would you prefer an idea of a product that hasn’t been built yet? Going back to the first point about being ready for a long journey, the main reason is because it takes time to find product-market fit, which then translates into this investable traction.
While these 3 points may sound discouraging, a reality check-in is the easiest way to build resilience
Once you join the startup world you keep hearing “most startups fail because of poor execution”. I used to believe it blindly, but now I couldn’t disagree more with it. Startups fail because entrepreneurs simply give up. If your expectations are more aligned with reality, you’ll plan better for the journey, you’ll be more effective, and the lifetime of your faith and conviction will be extended.
“Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”Thomas Edison
Have any thoughts about the fundraising process? Let us know down in the comments.
This article originally published on GREY Journal.