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Raising Money? These 4 Questions Will Help You Find The Right Investors For Your Business (Written By 2 Female Co-CEOs)

Kelly Oriard

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Any founder will tell you that raising money is a trial-by-fire process.

We recently closed our seed round for our venture, Slumberkins, raising $2.8 million led by Listen Ventures and SeaChange Fund. After bootstrapping the company for almost three and a half years, we decided to raise money in order to continue expanding the Direct-to-Consumer brand while gearing up for the exposure from an upcoming preschool TV series in partnership with The Jim Henson Company. 

However, my co-founder Callie and I will be the first to admit there is no “one right way” to go about raising money for a venture.

When you first begin to entertain the idea of raising money, it’s the “money” piece that consumes your attention. But as we began the journey of meeting with angel investors and VC funds, we started to realize that while money certainly played a role (a big role), we also thought hard about what types of partners we wanted to bring into the business. Until eventually, the money started to take a backseat to another question, which was, “Is this someone we want to spend time with? Is this someone we can learn a lot from?”

As two first-time female founders, we certainly learned a lot about fundraising by the time we closed our seed round. These were the 4 questions we asked ourselves all throughout the process in order to make sure we found the right investors for our venture.

1. “Are we meeting with a wide range of investors? Are we practicing?”

When it comes to raising money, there is no substitute for just getting out there and doing it.

You could take a class, you could hear stories from other founders, you can even read articles like this one and gain a bit of perspective or extra context, but the truth is, you need to sit in the room. You need to explain your mission, your business, and what you’re trying to solve in the world, over and over again. You need investors to ask you hard questions so you can see where you need to spend some time thinking harder about things. You need all these moments in order to grow.

For us, we actually raised a safe note round before this seed round, so there was a bit of a confidence difference between then and now. We had accumulated hours and hours of practice, we had met with a wide range of investors from so many different backgrounds, and we had learned what we were really looking for. 

Especially if you are an early-stage venture, you have to remember that VCs and angels are betting on you—the founder. Your business just started. There isn’t much of a track record. So a lot of the decision is emotional. It’s based on their belief in your ability, your work ethic, and your vision. 

And the only way to communicate that belief is through practice.

2. “We know what we’re bringing to you—what are you bringing to us?”

One of the big mistakes founders make, and one we had to learn ourselves, is that you need investors as much as investors need you.

It’s hard finding compelling businesses to invest in. It’s hard finding passionate entrepreneurs worth betting on. So while the whole fundraising process might feel like you trying to prove yourself, realize you have every right to ask that same question back to potential investors. During our seed round, if someone asked us a question we weren’t sure about, we would turn the question around and ask, “Well, what’s your experience in that? How would you be able to help us with what you’re talking about?” 

There’s a fine line, of course, since investors want to know you are going to be responsible on your own. However, we found that by doing our due diligence right back, we ended up weeding out the angels and funds that probably weren’t a good fit from the beginning. And the ones who appreciated that quality about us, and saw how they could be helpful, have ended up bringing a monumental amount of value to us and the business.

3. “Are these people we would want to spend time around?”

One of the things that makes my co-founder, Callie, and I unique is the fact we are co-CEOs.

It’s something we decided at the very beginning, and very much represents what we are trying to communicate through our brand: building healthy, balanced relationships. However, because the co-CEO approach doesn’t exactly fit the entrepreneurial mold, it’s something a lot of investors asked us about.

And the way people responded told us a lot.

Some investors asked very hierarchical types of questions, which told us where they were starting from and how open they were to the way we wanted to work. Other investors loved it, loved what we stood for, and trusted we were making the right decision for our relationship as co-founders. 

Remember: investors don’t just write you a check and then vanish. They become part of the business—part of the family. So you need to make sure you are bringing people on board who fit well into your “family dynamic.”

4. “What do we really need help with?”

There’s nothing wrong with someone writing you a check and leaving the rest up to you.

It just depends whether that’s what you really want—or need.

At the end of the day, what you’re trying to find is a balance between someone who writes a small check and expects a lot of time, attention, and financial success in return, and someone who writes a big check but doesn’t want to roll their sleeves up and help you reach the next level. It also takes a while to understand that some investors will pass on an opportunity simply because it’s outside their wheelhouse. They don’t really know how to help the business, so they would rather focus their time elsewhere.

Fundraising is like speed dating, where you’re trying to figure out who is the best match for you. So instead of focusing too much on whether a certain investor or fund wants (or doesn’t want) to invest in your business, spend more time questioning what you’re really looking for in the first place.

Fundraising is not an easy process. Some parts of it are logical, others are emotional, and all of it requires you to really trust your intuition. You should feel good about who you’re bringing on board before taking any money.

The good news is, you can take your time. You can always say no.

I am the co-founder and co-CEO at Slumberkins, an educational children’s brand working to empower parents to teach positive social-emotional life skills to their children. As a mother and educator, I'm on a mission to use my educational background to create an intentional children's product line.

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