Some Tips for Dealing with Investors
Global surveys show that, while around 30% of international trade finance goes to SMEs, banks reject some 40% of applications from such companies. Ecommerce companies suffer an even higher rejection from banks and investors. As readers know, I’m a fan of TechCrunch and sometimes find a really apt bit of guidance. The other day I was talking to a friend who is trying to raise investment for an ecommerce project she is planning. Her efforts had just been turned down by one investor. There were lessons to be learned.
Walter Thompson, the TechCrunch editor, had this to say about chasing investors. His advice is generic but gives hope to those seeking the elusive investor. “Because solo founders don’t have to run decisions past anyone, they can exert near-total control over their startup’s mission. But you’ve got to pay the cost to be the boss: a shot-caller must be comfortable with making decisions under pressure and needs to be adept at fundraising, recruiting, onboarding, managing … well, everything. According to Russ Heddleston, who founded DocSend before it was acquired by Dropbox, lone wolves tend to fare better with investors: His analysis found that one person can raise an average of $3.22M after 42 meetings, but teams of four or more need to book 30 meetings to raise $1.7 million.
Fundraising is only one part of a founder’s journey. If you can’t connect with an investor who can help you find and fill in your gaps regarding talent or expertise, you can’t build a sustainable company. Speaking as a veteran of multiple early-stage startups — I would much rather work at a company that is led by a team. This tends to foster a collaborative work culture, but it also makes it easier to pivot when needed, and the work is less ego-driven.” So don’t be put off by rejection – keep going. Of course, we don’t all have the luxury of creating a team – many of us must go it alone, but when you have achieved your funding and are looking for the next step, this is wise council.
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