Entrepreneurs: Fundraising
by Miki Saxon
It’s Valentine’s Day and I’m in deep fundraising mode. In essence, I’m the guy at the dance trying my best to land the pretty girl, and experiencing the challenges, rejection and hard work that this entails.
The process and preparation has made me reflect on a number of dearly held “truths” among startup founders. Most consider fundraising highly distracting and grueling; preventing them from doing the real work founders should be focusing on. Add to this the perception that investors and VCs often come across as assholes, and it becomes a chore worse than scrubbing public bathrooms.
I view it very differently. To me it is a real test of whether the Kool-Aid I’m drinking is actually as tasty as I believe it is. The fundraising process is an opportunity to interact with smart people (some are truly great people) who see a lot of deals and problems and have a very difficult challenge — putting themselves in the customer’s shoes without having their experience or being in their situation. As a consequence, they have to try to imagine themselves as someone they are not and ascribe value to problems they are not dealing with personally. If you try it, you’ll see that it’s virtually impossible.
This causes the constant delays, increased information search, desire for proof points, and the follower behavior that looks so ridiculous from the outside. But we who are starting companies don’t have to deal with problems as difficult as this; we just have to understand the customer’s problem and deepen our knowledge of them. And we’re usually not dealing with 15 different customer types, products and industries in a single day. Just one product, one customer and one industry everyday for an extended period of time. So let’s be a little more humble about the significantly more difficult work of making investing decisions.
Beyond that, investors often provide introductions (in their search for proof points) to knowledgeable and interesting people from whom I can learn. I usually don’t have the time to seek them out (or even know who they are) unless I encounter them in a fundraising situation. So I’m grateful for the investors that seem so frustrating — they make me more knowledgeable and professional every step of the way.
But the most important thing is my perception of My Baby — the product and company I’m creating. As a parent, I believe my baby is the most beautiful and important thing that has happened to the world in recent history, and I expect others to agree with this. It is so easy for me to believe that when people don’t see this, it’s because they are blind, stupid or narrow-minded. Sometimes it can be the case, but I remind myself of how often I visit new parents who proudly show me their new baby, expecting me to offer compliments on its cuteness and how often I’m amazed that something so ugly can actually be called human. Yes, I’m being extreme, but I’m sure that this is how investors feel when they sit through hours upon hours of meetings every day with delusional founders. Or maybe they are just pointing out a blemish on the cheek of the baby and we react as if it’s a mortal challenge, rather than take it as good feedback and a learning experience.
Ultimately, we need to have humility and compassion for investors. Making money this way is really difficult. And if we mix in the politics of being part of an institution I’m amazed that they actually manage to keep going every day. We have passion for solving a problem or seeing a market opportunity. They are just trying to maximize returns and hope to be able to work with great founders to accomplish this.
There is no question that we founders have the better deal. More fun, more learning, more challenges, more passion. And for this we have to pay a price – the risk of loss and temporary poverty, much heartburn and far too much work.
I enjoy what I do. In fact I love it. And investors help me to accomplish my vision in so many ways, even when they reject My Baby or me. I’m grateful each time they invest and each time they don’t – they are putting me in a stronger position to succeed whatever they do. Thank you.
Image credit: Quarrio
