Master the 12-Month Plan That Will Get You Funded Faster

Full Transcript

Jason Kirby: I recorded 20 minutes worth of content and didn't hit record. Alright, back to it.

Jason Kirby: Okay.

Jason Kirby: Starting from the top. Do you really think fundraising is going to be easy for your startup? I hate to break it to you, but if you're trying to raise money now when you need the money, you're in for a long road ahead. In this episode, I'm going to demystify the timeline of fundraising and make sure you set yourself up for success. The strategy I will share is for founders at any stage of their business, raising equity from professional investors, within the next 12 months. If this is your first time tuning in to Fundraising Demystified, I'm Jason Kirby. I've been building and selling companies for 17 years. I've raised over $145 million. I've had four exits. And now I help founder-led companies access the right capital from the right partners at my firm, Thunder .BC. Stay tuned for a freebie on how you can access a free list of AI-recommended investors specific to your startup. Now let's get back to managing your fundraising time.

Jason Kirby: As you know, or as you probably have heard, fundraising is a marathon, not a sprint. In this video, I'm going to be breaking down the exact steps you need to build investor relationships, keep your company growing up into the right and get the right investors at your cap table. Okay.

Jason Kirby: So the first thing we're going to do is we're going to talk about month zero. I'm calling it zero because I'm assuming maybe you haven't done this step yet, and it's never too late to start. The best time to start is now if you haven't done it already. So we're going to start with fundraising before you need the money. So too many founders wait until they're desperate to ask for money. And ultimately what ends up happening is you go out when you need. You have money in three months, you try to relationships and maybe you get a couple of angels, but ultimately you won't raise the money that you actually need and you don't get the money to hit the velocity that you need to raise the next round. So I always like to bring up this point and most people don't know this, but did you know that the average VC founder relationship lasts longer than the average American marriage? Okay. How many successful marriages started off with a cold email and ended with a ring on a finger in less than 90 days? I'm going to go with probably zero or a negligible amount. And it's so important for founders to change their perspective about fundraising. Think you got to be in a cave, you know, locked in your basement, your garage, wherever it just build, build, build, build it. And then show up one day and you know, here's Jason who no one in the world has ever heard of. And he's knocking on your door asking for money. It's like pump the brakes there. I don't know you. I need to build a relationship with you. I need to trust you. You need to demonstrate that. You have the ability to build a real business, less, you know, take it easy, take it slow. And that's what's this month zero is all about. It's about building and establishing these key relationships as early as possible. So first thing you need to do, you need to identify and reach out to smart, relevant, and very credible people that are highly regarded in their industry or sector that you're either building in or have built in.

Jason Kirby: They do not have to be investors. They just have to be credible experts that have strong networks. So this is the most important phase of this whole strategy. You need people early on to believe and trust in you and make sure you don't ask for money. You ask for advice. And what ultimately ends up happening is you share what you're building. You don't tell them what they're doing. You share, you make it a collaborative experience. You talk about, Hey, I'm thinking about doing X. And because you're coming at it from an open-minded perspective, they're not judging you, they're collaborating with you. They're going back and forth with you, sharing ideas, and you want to demonstrate like, okay, I'm thinking about the business this way. I think my ideal customer profile will be this. I think my go-to-market strategy will be this. I think the market is this big. What are your thoughts? What am I missing? What could I do better? What could be a better value proposition? This way you get these people leaning in with you. They feel like they're contributing and have either at least their identity wrapped up in the business because they contributed maybe something crucial that you end up building, or they feel like they like you more. They're able to build a relationship with you more. So this is really important in the early stages of these relationships. And it also demonstrates that you're coachable. This is one of the most important attributes, especially a first time founder that doesn't have the ego of a multi-time multi-exited founder. It's important to really be coachable.

Jason Kirby: And also one other really key point that I do not want to miss for month zero, meet these people in person, grab a coffee, grab a go meet at the office. Be sure you actually establish an in real life relationship. Cause if you don't, I get this question all the time when I make intros to investors for my friends, my investments, my clients, I get people come up to me and they're like, cool. You know, Bob, like Bob sounds cool. They're like, you worked with Jessica. Okay. Like, well, do you know them? Like, have you met them in person? Like what, are they, what do they sound like? How do they hold up themselves? Like, how do they present themselves? Like those are questions I get. And if I haven't met that person in person and I say, well we just, we've met a couple of times on zoom or Google meet the quality of that intro drops dramatically. They, they still take the intro seriously. They'll still take the meeting, but it comes with a little less, you know, juice behind it. And that's why it's important to prioritize those in-person meetings. All right. The goal for this month zero.

Jason Kirby: And however long it ends up taking, you need at least 10 of these people in your camp to make sure you're to have a big enough network to get enough intros to the right investors to actually secure the capital and you need down the road. All right. So let's move on to months one through six. So you can be doing month zero tasks all through month one through six as well. But ultimately you need to be building rapport with these relationships. Need to be establishing, or you need to be providing updates on a regular basis. If you're doing a 12 month raise and you need to close the end of 12 months, you need to provide monthly updates. If it's further out, quarterly updates are fine. But ultimately you need be demonstrating the good, the bad, the ugly with the business so that people are aware of what you're doing. Maybe they have an opportunity to contribute and ask for advice or help. But ultimately, if you miss out on doing the updates, you fade away. All that work you put in a month zero, all those relationships are fading. People start forgetting who you are.

Jason Kirby: So it's super important to maintain their relationships. I've made this mistake before with other businesses. It definitely comes back to bite me if I'm not providing updates. It feels like, you know, I'm using them and that's ultimately what can kill a relationship. They love seeing the progress. They love seeing the updates. So make sure you prioritize this while you're building a great company, while you're doing everything else right in the operations. You need to be at least prioritizing a few hours a month. Just keep investors updated. Try to get those in-person meetings if you haven't got them already and have those frequent touch points. All right, now month six. This is where the game starts. You have established some relationships, you've nurtured them a little bit, now everyone's leaning in on, okay, what do you got? Are you gonna actually raise money? What's gonna be your raise? So this is where you need get everything buttoned up. And here's the checklist that you need. Number one, you need a deck.

Jason Kirby: But don't build a deck in a silo. Collaborate with your network, bring in experts, talk to people. Don't ship out your deck as if it's a final product. Ship it out and say, hey, this is our first draft. What do you think? What questions do you have with this deck? Make it a collaborative process. Again, get their buy-in by allowing them to share their expertise. It's so important to continue to build those relationships. From there, once you've...

Jason Kirby: And if you're unsure on what to do with your deck or you haven't built a really strong deck or a deck that's appropriate for your stage, don't worry. Reach out to our team at help at thunder .BC. Let us know what you're working on and we'll see if we'll be able to help you with the deck. We love putting together great decks. All right. Deck aside, you at least got a deck going for you now. Now you need to architect a growth trajectory that you can sustain for the next six months. This is really important.

Jason Kirby: This is not about...

Jason Kirby: And make sure you have enough cash on hand to juice paid marketing in case you might fall in the growth. If you don't have consecutive consistent growth for the next six months, you might have to actually start over in your fundraise. And the reason why is once, once there's like this, this, this, and then a drop investors immediately get turned off like, well, when you figure out that come back to us. It's just the easiest thing to say no to. It's like, you haven't figured it out yet. You're not de-risked enough yet. Now, maybe some investors, again, you have these great relationships, great intros. They can look past those things, but if you can continuously drive growth over the next six months, please do. And then I also say is like, keep a little bit of cash on hand. You know, it's better to have a slow and steady growth or stable growth than it is to have like a big, you know, peak run out of money and then have a drop. So manage your cash flow accordingly so you can keep that consecutive growth. You need three months of growth before you can actually start the fundraise, and then you need to maintain the growth through the diligence and the fundraise process until you actually have cash in banks. That's why I give this advice on six months.

Jason Kirby: All right, so now you got your growth plan, you got your deck together. Now it's time to go to your network and say, we are ready. You need to tap your network for those warm intros. You need to be very clear and specific with who you want those intros to. So do your research on which investors you ultimately want on your cap table. If you want help creating this list of a hyper-targeted investor pool, then I suggest you go to our website, thunder .bc. Go to Create a Profile or Apply Now and create a free profile. And we take all the guesswork out of finding out who you should be building relationships with and who you should be raising money from. With our AI tool, we score your company against 6,000 investor profiles to find which have a higher probability of investing in your company. So once you have a list that identify your target investors, share that with your network and identify who can map the intro to who.

Jason Kirby: And this could take some time. This is not meant to be easy. It is tedious. It is manual. There's not a tool out there that can make this perfect. So do the hard work, figure out who connects who to who, and then be very specific with the ask, send a pre-drafted email that they can just forward to the person you want the intro to so that they can tee it all up as seamlessly as possible and on your timeline. And do not give up until everyone has brought you in warm intros. This happens like you have to be persistent. Just people get lazy. People go on vacation and people forget. And it's not because they don't like you. It's just because they get busy and it's not their highest priority. But if you make it their highest priority by reminding them, it will get done eventually. And that's going again, back to month zero with all those relationships you build. Now's the time to cash in. All right. So how do you map out your calls? So when you start getting intros, we're to call this the. Getting to know you calls, the first call. So I have a whole separate video on how to manage your first call with an investor, but ultimately you want to demonstrate on this call that you're working on something cool and relevant that investors would be interested in. Okay. So you're not trying to ask for money. You're not trying to give them the hard pitch. You just want to demonstrate that you're a trusted, credible person working on something interesting relevant to their investment thesis.

Jason Kirby: You know, tell them that you plan to raise in the coming months and you wanted to get on the radar early and ask if they would like to be a part of your investor update list. Okay. So you're not going for the hard ask at this point. You're just demonstrating you're working on something unique and worthy of their time. And you're basically trying to do this whole meeting to earn the right to get them on your investor update list and to earn a meeting when you're actually fundraising. Okay. So what you'll do on that call is you'll basically say, Hey, I'm going to be in. San Francisco, New York, wherever they are on these dates. Can we go ahead and get something scheduled and you want it far out in advance? So if you're in month seven, you want to plan for month nine, so like two months out, so it's like pretty easy to get something on the schedule. And you say, hey, I'll be in town that week. You know, would love to grab coffee or, you know, meet at your office. This is the right way to build the right relationships. This gives plenty of time to lead up to things. You can share information over the next month or two with them, you know, stay in touch and then you get that.

Jason Kirby: Crucial in-person meeting, which increases the odds of success dramatically. And be sure to have at least that one week window open already planned. Either book your tickets already so it's like you know you're going, or at least create the wiggle room and set some dates on where you'll be in which cities so you can coordinate call our in-person meetings as best you can. And try not to ever leave an investor call without getting a clear next step, which is either getting that next meeting booked, Or you know, asking if they want to be on the investor updates and if they're hesitant or they say, well, we'll get back to you, that kind of stuff. They're not interested in you. You should completely be prioritized them and move on to someone else. Maybe add them to your investor update list, but don't make them a priority. All right. So that is pretty much month seven through eight. Now we're onto month nine. So to recap, you have all these amazing advisors and relationships that have teed up all these warm intros. You've now had these introductory calls, maybe one or two at this point. With all these relevant investors. Now it's time to put the pedal to the gas and now it's time to put the pedal to the metal and run a very efficient process over the next 30 days. So this is where you should have all those in-person meetings already pre-scheduled, ready to go in your calendar. You need to reconfirm those meetings, make sure those are, you that you tell them I will be at your office at this time. You know, put the pressure on them.

Jason Kirby: You know, if you can't do in person, you're doing Google meets, so be it. This is still appropriate to take first time calls. You know, you might as well get them in if you get them now, you know, take every shot you can. But ultimately the target here that will likely lead to success is 30 meetings with 30 firms. Okay. So that's pretty much the number after doing hundreds of interviews with founders and being a part of so many different raises, 30 is kind of that magic number where it's not too much, not too little. But if you have 30 meetings, you usually have enough momentum to get a couple term sheets. So that's your goal. So if you take anything away from this, find a path to get 30 relevant meetings with investors. So at the end of month nine, you take that kind of blitzkrieg of meetings. So in month nine, you took that blitz of meetings. Hopefully you had at least 30 really good quality meetings with 30 firms. So getting into month 10,

Jason Kirby: You should now be completing light due diligence. So you have like a light data room, which we have a whole data room strategy on our website. You can find out if you go to joined out Thunder .BC and you should start being able to collect term sheets. So if you have 30 meetings, odds are you get one to three term sheets in month 10. Okay. And to learn more about negotiating term sheet, what comes in them, how to prepare for them. If this is your first time, we have a free comprehensive guide that's linked in the description below. Or you can just subscribe to our newsletter at join .thunder .vc. We'll make sure we send that to you. Okay. So, month 11 through 12 is getting through a grueling due diligence process. This is often, you know, if you're early stage, it's not too bad, but if it's, you later stage, it's just a lot of legal lawyers talking back and forth. You know, everyone trying to figure out, you know, come down to the final terms, but ultimately, it should be, you know, at the end, signing the docs and collecting wires.

Jason Kirby: And that is typically how it flows. All the heavy work is building those relationships early on to make sure you get enough shots on goal with least those 30 investors. And that often leads to a successful outcome. That doesn't mean reach out to 30 investors. You often reach out to 100 or 200 investors, depending on how you run your process, to get those 30 meetings. But ultimately, it's getting 30 meetings that ultimately leads to success. So I promise you.

Jason Kirby: If you follow these steps I shared with you for a 12 month fundraise process and you're building a company worth equity capital, so let me be clear, not every company is worth raising equity capital for. Not all companies are created equal. So assuming you are worthy of raising equity, this will work. I guarantee it. And if it doesn't, just email me. Tell me your story. And I'll give you my office address to show up one day, slap me in the face and blame all your fundraising problems on me. But I know that will never happen because if you follow these steps to a T, you build these key relationships, make clear relevant asks to get warm intros, you demonstrate that you can run a process and you get at least those 30 meetings, you will have success. So that all said, I hope you found this session valuable.

Jason Kirby: Again, you can learn more at thundr .bc. You can subscribe to our weekly newsletter and weekly podcast at join .thunder .bc. And again, this was.

Jason Kirby: And if you haven't already liked and subscribed, be sure to do so. Hit that subscribe button, give us a like. And if you have any questions or you feel if I missed the mark on something or whatever I said was impossible to do, give me a comment down below and I'll be happy to answer you. Until the next episode, be sure to watch our past episodes with amazing founders and VCs that have gone on to raise hundreds of millions of dollars, billion dollar exits in our podcast series, Fundraising Demystified.

Jason Kirby: Alright, there's probably a lot of chopping to do in this. Not my favorite, but I think the content's there and it's pretty interesting. So, line of line, if I miss anything, just let me know. Thanks.