Here is how we did it:
- In the past 60 days, Yu-kai and I have met with more than 35 investors
- In the past 90 days, Yu-kai and I have pitched at more than 20 angel/VC sponsored events
- Yu-kai and I emailed more than 200 friends and professionals in our network asking for funding or for an introduction to funding
- Yu-kai has rewritten and revised our Executive Summary and Power Point Deck at least 8 times in the past 60 days
- Yu-kai and I wrote a blog post on our blog letting our readers know that we’re looking for capatal
The above 5 points illustrate just how much time and hard-work go into raising capital.
This post is dedicated to the bootstrapped entrepreneur in the technology/internet industry looking to raise Angel or VC money. You will learn how we got our investor meetings, how we pitched at investor-sponsored events, and how we utilized our network and blogs to raise capital.
How to schedule a meetings with more than 35 investors in 60 days
Yu-kai and I constantly go to entrepreneurship events to meet people and network with influential individuals. Check out the StartupDigest for a good place to find entrepreneurship events in your area.
We force ourselves to go: At times we get lazy; at other times, we may feel like there is no one at the event worth meeting. During these times, we just suck it up and go to the event with a smile on our faces. All it takes is that one event where you meet that one investor who believes in your startup and invests money. Increase your chances of finding that one investor by going to as many events as possible.
Invest in an iPad: We use an iPad to pitch our product to professionals and investors while at events. Having visuals to accompany your pitch makes it that much more concrete and compelling.
We don’t hang out with each other: At the event, Yu-kai and I make it a point to NOT hang out with each other. This forces us to meet people rather than just hang back and talk to each other.
Follow up with good leads and stay persistent
When you find someone that is interested in your pitch, follow up with an email to meet later for coffee. Here is an example of an email I sent last month:
Subject: Jun Loayza: Great to meet you at the SV Newtech Event
This is Jun Loayza from Viralogy and it was so great to meet you at the SV Newtech event yesterday. I did some research on the question you had and it looks like Aweber is the most popular email newsletter platform for bloggers between the ages of 20 and 30.
I looked over your portfolio companies and feel that Viralogy is a great fit:
- We are in the social commerce industry
- We have a completed product
- We have paying customers
- We have shown to increase revenue for our clients by up to 11%
I’d like to schedule a time to meet for coffee and show you a demo of our product. I’m available the following days and times next week:
- Day and time
- Day and time
- Day and time
Thanks so much David and I look forward to meeting with you.
I prefer to be very direct with my emails so that the person knows that I am interested in his money. I’ve scheduled meetings with professionals before without being clear and specific about what my intention was and it ended up being an ineffective use of time for both of us.
How to contact friends and acquaintances with the purpose of raising money
It’s definitely not enough to limit your funding efforts to the chance investor you meet at events. To maximize our reach, Yu-kai and I emailed 200 friends and acquaintances in our network with the purpose of raising money.
The thought of raising money from a friend can seem intimidating. The way I think about it is that I’m giving my friend a chance to make a lot of money by investing into my company. Got to think positive!
This is the email Yu-kai and I used to reach out to our network:
Subject: How’s it going?
It’s been quite a while hasn’t it. Too long actually.
I’m still with Yu-kai Chou and Stephen Johnson working on the startup. We moved to Mountain View, CA in February to be closer to Silicon Valley and things have just picked up tremendously. How is everything going with you?
I’m writing this email to respectably ask if you or someone you know might be interested in discussing the potential of being an investor for my company. Our company is in a great position right now because of the following reasons:
- We have a finished product
- We have paying customers
- Our product has proven to increase revenue for our clients by over 10%
Viralogy is a social commerce platform that utilizes the Facebook social graph to personalize the shopping experience. Our team has lead social campaigns for LG, Levi’s, and Victoria Secret.
Viralogy won first place at Jason Calacanis’ This Week in Startup’s pitch competitoin, won first place (out of 16) at a CINACON VC Pitch Competition, and Top 10 (out of 140) in a TheFunded.com Pitch Competition! We are in a perfect position to raise another round of angel funding and scale up our business.
Here’s a video that explains more of what Viralogy is about: http://vimeo.com/12590994
Let me know if you or someone you know may be interested and I can send more info about our company. I’ll actually be in Los Angeles in a couple of weeks. If you’re available and interested, I would very much like to meet up for coffee to catch up.
How we won multiple startup pitch events and competitions
The simple answer is to apply to as many as possible. Seriously, if you keep pitching, then you’re bound to win eventually.
But the real truth is that pitching is not enough. Yu-kai and I have pitched at a ton of events in the past three years, and it’s only been in the last 8 months that we’ve finally started to receive recognition and awards at pitch events. We started to win because of the following reasons:
1. We are in an emerging industry: Investors know that social commerce is a HOT industry. If you’re in a compelling industry, investor ears will perk up and they’ll be that much more interested in what you have to pitch.
2. We have a completed (technology-centric) product: Investors love a good idea, but they love a good idea with a finished product so much more. Everyone has great ideas; you will stand out if you are able to show a working product during your pitch.
3. We are making revenue: If you have validated that clients will pay for your product, then investors will love you. Showing revenue reduces risks and makes investors very interested in what you have to say.
So I got the meeting? How do I close the deal?
The first step is to get the meeting. Focus all of your efforts on setting up meetings with investors: go to as many events as possible, finish your product and validate that clients will pay for it, and reach out to your network for connections.
My post later next week will detail how to close a deal once you’ve set up the meeting.
Work hard and good luck!
p.s. Thank you so much to the investors who believe in our team, our vision, and our company. We’ll going to have a big success together.