Inside Fundraising from a Silicon Valley Outsider (Introduction)
As a first-time founder of a startup, I’ve been preparing for my first fundraising experience by listening to podcasts, reading countless books about best practices and attending events to hear different entrepreneurs’ experiences. One underlying theme has become abundantly clear: you need an introduction to get a meeting with an Angel or a VC .
While the startup community in Charlotte, North Carolina is strong, we severely lack access to seed-round funding. We are also 2,688 miles away from Silicon Valley; the heart of Startupland. While there are other large cities with strong foundations, this region could easily be renamed Venture Capitalists Island. Even if VCs have other locations, the larger firms usually have one team member in they bay area or are constantly traveling to it.
The founders outside Silicon Valley (or the other six major cities) are basically sitting in an ocean with a small number of investors that are intolerant to early-stage risk. This the boat I currently sit in… and I know I am not alone.
I am the founder of Vishion, a mobile application that uses true color data to help shoppers find decor or apparel like a digital personal shopper. I’ve included a shameless plug for my company so you can get to know more about the song I will be singing to the investors I am trying to court.
Another founder suggested that I record my fundraising experiences, showcasing the difficulties and sharing insights as they occur in real-time with others floating in the same water .
I thought this would be a great opportunity to build a community of outsiders… a group of founders outside of Silicon Valley that have fundraising insights they are willing to share.
How do we, startups on the outside, get the attention we need to survive?
There are a few strategies I’ve learned to gain the attention of investors, such as reaching out to VCs through a warm introduction from other founders. But that seems to be the only method for people on the outside.
When it comes to traditional methods of getting in touch, investors are inundated with so many requests that they don’t have time to pay attention to every message. Resources such as LinkedIn, Email and social media are long-shots to say the least.
To help other entrepreneurs dealing with the same issues, I am giving everyone an inside-look of my efforts to raise capital as it’s happening. No holding back; completely authentic reactions as the story unfolds. Too often we hear how hard the journey was retrospectively, but it flashes by as a montage to a greater overarching theme in the entrepreneurs’ story: success or failure.
My goal is to show the dirty, cumbersome mess that is the montage.
To gain the attention of investors, I am applying three strategies:
- traveling to compete in pitch events and conferences in Silicon Valley
- writing personalized notes to the ideal investors in all locations
- walking with information in-hand to firms in San Francisco that invest in my companies vertical.
I created a password-protected investors webpage to share the information these select individuals may want to even consider a conversation. My hope is is to at least receive a rejection email instead of being ignored. It’s easier than throwing rocks at a window that will never open.
I am going to tweet my reactions to events as they occur. I am going to record how I am feeling after my pitch events and my day of being a door-to-door salesman so my community of outsiders can see the effectiveness of each strategy.
My promise is to be authentic. Although I usually err on the side of self-preservation, I truly want to know if my experience is similar to yours. Selfishly, I would love to hear from male founders if they honestly believe my experience is more challenging. We hear that women only receive 2% of the funding. Is this because there are less of us or is there really a larger mountain to climb?
The one caveat to this experience is my startup’s target audience. As I’ve learned from a few conversations so far, it’s difficult to communicate a product intended primarily for women to a group that consists primarily of men. Obviously it’s my job to overcome that tiny hiccup before it becomes the knife that kills me.
I am hoping to create an open dialogue with other founders who have or are experiencing the same thing. As a collective, we can help each other build the necessary connections and avoid the deadly mistakes. Hopefully we can get a helping-hand from our cousins on the inside, but I know they are fight a different battle (expensive rent, I assume).
Follow me on Twitter to see my rejections and successes in real-time as I walk through San Francisco. Connect with me on Instagram to see these reactions as the occur. Lastly, follow this series for the post mortem. I’m going to describe the entire fundraising process, from pitch through negotiations.
Tweet me with advice, connect with me on LinkedIn to further the conversation and let others know your personal experience as a Silicon Valley outsider.