(I feel like I need some sort of disclaimer here… so I guess my disclaimer is: I know this isn’t something that will resonate with everyone, but I’m writing about this on the off-chance it helps re-energize a founder who might be feeling a certain way about fundraising)
I’ve been thinking about this topic for a while now. 2022 was a busy year where for Tundra Ventures. We got to experience a lot of highs and lows. The lows always feel lower than the highs feel high. Look up loss aversion if you want to learn more about why humans feel this way about “wins” and “losses” in general.
(The TL: DR is that finding 10 dollars feels the same as losing 5 dollars regarding emotional impact.)
Persistence is something that many of us have had to grapple with in our lives. It takes a lot of courage and dedication to stay the course and keep going, even when things get tough. But what does persistence mean for you in your own life?
Being a founder of any kind means that your full-time job is to collect "no's" on the journey to success.
It may sound cliche, but it's true: success requires persistence.
Not everyone will understand your vision.
Not everyone will trust in you.
Not everyone will believe in your unicorn idea.
Don’t be discouraged. Skepticism and doubt are natural reactions. Humans are hardwired to be risk-averse. Startups are a risk. So that means you need to go into the game with the right mindset.
Your startup is a risk to that investor’s financial security. So it only makes sense that 99% of your conversation with potential investors end in disappointment. Are you prepared to accept the "no's" to unlock the "yes's"?
I think the moment a founder realizes the name of the game; it makes the life of “being a founder” much less frustrating or demoralizing when raising money.
It's not personal. When exploring the idea of raising money for Yonder, the startup I had done for five years, I first approached some angel investors I had gotten to know quite well. It wasn't to ask for money - though that would have been great - but for advice. It became clear after some early conversations that they wouldn’t be the right angels for me. They weren't interested in the idea, didn't know much about the space, and were skeptical about the thesis. That was okay. It's like dating: you don't fall in love with every person you date, and the same goes for investing. Most investors aren’t going to be interested, and you most certainly aren’t going to be interested in every investor.
I dislike using the phrase "it's a grind," but it's accurate. Once you've identified potential investors, you must work hard to build relationships. This means networking, attending industry events, and cold-calling investors to pitch your business. You might go through multiple rounds of pitching before you find an investor willing to commit. Want to know the ugly secret? Sometimes you do ALL of this, and the answer is no. This process can be frustrating and time-consuming, but it's essential if you want to raise the funds you need to get your startup off the ground. Just realize that you will most likely have to do this dozens, if not hundreds, of times to reach your goals.
Is it fair? Hell no, it’s not fair, but it is what it is. Do some have it easier than others? Sure! Does that change our circumstances? No. We’re dealt the hand that we’re dealt. It’s up to us to read the other players at the table and make the right call.
The moment you change the narrative in your head from: “99% of the time, the answer is no” and flip it to “every no gets me closer to that yes,” is an essential change in how you frame it in your mind.
Why did I take the time to write this blog post? Because sometimes, I think it’s important for people to get a reminder that what they are doing is hard and that they aren’t alone.
Collecting rejections is part of the process.
Don’t take it personally (because 99% of the time, it isn’t).
Learn from it and get better for the next conversation.
It may not feel like it, but sometimes they are doing you a favor.
Let the “no’s” motivate you.
Most importantly, don’t forget to celebrate your wins.
In conclusion, raising money for a startup requires persistence, dedication, and a willingness to keep pushing forward despite setbacks and obstacles. It can be a long and challenging process, but it's essential to turn your vision for your business into a reality. By building a solid support system, refining your pitch, and staying focused on your goals, you can increase your chances of success and raise the funds you need to get your startup. Successfully building a startup starts with a foundation of persistence.
I’ve collected many “no’s” in my professional life; some are short and to the point, some are beautiful disasters, but ALL were/are learning moments.