Story time 🔥 🏕️
I am often asked by pre-seed or seed stage founders how to find investors.
My main advice is that they should learn how to choose investors. I recently heard that VC/founder relationships last longer than the average marriage in the US. You need to have confidence that what you are working on is amazing, and think of who will be helpful.
My story: I was 25 working on my first startup in London (see photo), effectively building the CNet of Europe. We took $1m from the first VC who said yes to our idea, but we did not find product market fit, despite heroic efforts by Tim Savage, Sarah Savage, Vijay Sharma, Peter Clateman, Mark Nicholson MBA, David Akast and others. With one month to go, we tried to get bridge financing from the VC, but they were not interested and offered us a loan on brutal terms.
I could not let this die. I made the painful choice with my co-founder to let go virtually all of our hand-assembled London team (who were amazing), and went out and pitched 3 new products to blue chip clients – of course, those products were not built yet. My card said Sales Manager. I closed Sainsbury’s. We then hired Krishna Mohan Veeravalli and an amazing team in Gurgaon, India to build out the product. We are still in touch today.
Most importantly, I then went out and found new investors. I realized the first investors added very little value when the chips were down. They were in Belgium, removed, looking for dividends (!) and the loan left a bad taste in my mouth.
I worked my network, and assembled a dream team to buy them out including Esther Dyson, Geoff Wood, Erik Wenngren, Colin Macklin, and Bill James – and we took the company to profitability and sold it 5 years, 180 clients, and 250 people later.
Esther asked me during my pitch (facilitated by Sanford Dickert, thanks) “This seems amazing. What’s the catch?” This is the fit you want with an investor.
So reach out widely (or better yet get intros), but be picky at the bottom of the funnel. This is how Cooper Lindsey and I are managing our current raise for Knapsack.
I included a great resource for people raising in the comments as it abridges the post otherwise.
