Workspaces

Office Space

Private and productive office space

Meeting Rooms

Private offices and meeting rooms on-demand

Services

Virtual Address

Send and receive mail in prestigious office locations

Phone Answering

Every call answered. An extension of your team

Virtual Assistant

Someone you can count on for your administrative needs

Free Services

30 Days FREE Trial - Pick One Service

Choose from Appointment Scheduling, Business Identity, Virtual Smart Office, Conference/Meeting Rooms, live Phone Answering or Virtual Assistant. No Setup Fees. Schedule a FREE consultation today 703-752-6200

Let's Get Started
Start-Ups

What to Do if your First Efforts at Fundraising Fail

By Townes Haas   |    January 25, 2016   |    9:09 AM

Startup Fundraising

Your first attempt at raising money for your new company or business enterprise didn't go as planned and you fell short of your fundraising goal. Your self-imposed deadline for raising funds for your startup has come and gone. Now it’s time to dig deep and figure out what went wrong and correct your trajectory. Where do you go from here?

Creating a Market

One of the primary pain points for novice entrepreneurs is that they believe their idea, company or business will inspire investors and venture capitalists to give them money simply because the entrepreneur believes in the idea. An idea is just that; an idea. The only concrete expectation that investors have is for you to create a market. Creating a market means that you’ve generated enough interest in a product or service in a short period of time that investors know that a lot of other investors are clearly interested in your concept and many of them are likely to invest.

The obstacle here is a disconnect in expectations. As an entrepreneur, you want to raise money as quickly as possible to launch your startup. Investors want to delay the writing of the check as long as possible in order to gather information, save money, invest wisely, and reduce risk. Because of that fundamental conflict, the only way to force a decision from an investor or a venture capital firm is to create a scenario where the investor believes that the deal might be plucked away by other investors. Here’s another problem—investors all talk to each other. So you want to create the impression that your startup is a hot property by meeting with lots of investors in a short period of time. If investors hear from their colleagues that your enterprise has been struggling to get off the ground for months or years, they’re far less likely to reach that crucial decision point, because there’s simply no urgency attached to your situation.

Don’t Fundraise on the Side

Fundraising is a full-time enterprise and it’s something to which entrepreneurs must fully commit prior to even thinking about launching a startup. Timing is crucial in fundraising and that’s why you want to raise as much as you need as quickly as possible. Once you raise the money, you can return to operationally guiding and growing your business. Compression is key to fundraising. Schedule 10 investor meetings every day for a week or two so you can drill down to who the real decision makers are. Then you can focus on them, get your money, use that momentum to get more funding. Then close the fundraising round so you can get back to work.

Don’t Get Confused by Feedback

The biggest obstacle for many novice entrepreneurs is being confused by conflicting feedback. This is a problem for a lot of founders and it’s another reason why it’s important to assign just one person to be responsible for fundraising so you’re not making decisions by committee.

Every investor has an opinion and bias just like every other person has. Based on their inherent makeup, their experience, and their successes or failures, each one is going to be giving you different feedback. Because these people have achieved some level of success, their opinions are going to sound pretty smart and reasonable.

Here’s the way not to get bogged down by feedback. Going back to our original advice, compress these fundraising meetings as much as possible so you don’t have time to dwell on conflicting feedback. The other factor is not to instantly go from investor meetings to your team, which is just going to distract them and stop them from doing the real work. By anticipating bias, shortening your fundraising round and holding on to your self-belief that your idea is a good one, your next try at fundraising should go much better next time.