Fundraising During Covid

Some thoughts on fundraising during Covid. My expectation is that some form of social distancing will be in place for quite some time. So the playbook will need to change. These thoughts are a WIP.

3 observations and 6 suggestions

Observation 1: It will be easier to get first meetings. The bar to say "yes" to a zoom call is lower than an in-person meeting. Plus, people are not travelling as much and are not as much on-the-go. There is some found pockets of time and a desire to be productive.

Observation 2: It will be harder to get second and third meetings. It's easier to create a strong first impression in person. Conversely, it's easy to move on and forget about a video interaction. Out of sight, out of mind. There is a human X-factor that gets VC's to lean-in.

Observation 3: So it will be hard to get real traction in a fundraise. I always say that it moves slow until it moves fast. This dynamic will be 2x+ more pronounced in a virtual environment.

Ok, so, some suggestions:

Suggestion 1: Go broader at the top of the funnel. It will be easier to get the first meetings, so take advantage of that. I actually worry less in this environment of the negative signal of being "shopped".

Suggestion 2: Find real advocates who will not just make intros, but will be willing to nudge those they intro you to. You'll need mechanisms to keep popping up on an investor's radar so you can build momentum and get that second and third meeting.

Suggestion 3: You need as many external signals of quality and momentum as possible. That means social proof, actual traction, tangible milestones achieved, etc. Time your raise appropriately. Talk to insiders about a bridge if these are not in place.

Suggestion 4: Be diligent with your follow-up. Not so much so that you seem annoying or desperate. But I think the tolerance for tasteful follow-up is higher in a virtual environment. Here's a good old post from @msuster on this: https://bothsidesofthetable.com/i-met-with-an-investor-what-happens-next-63d443648f36

Suggestion 5: I continue to think that you want to raise in the summer if at all possible. I think there is significant risk that SIP happens again in the winter and extends to early spring. I hear that many companies plan to raise in early 2021, which may be the worst time.

Final suggestion: Offer to meet in person. Most people will hopefully be able/willing to meet in person outdoors at some distance. But investors may not suggest this out of respect (or laziness). Suggest this as a next step, and make it easy to say "why not?"