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I can’t emphasize enough the importance of engaging in conversations with investors and building relationships with them. This approach can significantly impact your company in the long term, providing valuable industry insights and establishing connections that can expedite funding when needed.
Here's the real key: you need to initiate these conversations well before you're ready, willing, or wanting to raise money. One of the most common mistakes I see is founders starting these casual discussions while actively seeking funds. In reality, the optimal fundraising strategy is to approach VCs years—or at least months—before you intend to raise capital. This approach allows you to build relationships over time. Then, when you're ready to raise funds, you can be upfront, honest, and straightforward with them.
https://x.com/jefielding/status/1793821451608301728
👈🏽This is precisely why building relationships in advance is crucial. By establishing connections early on, you're not just another email in a sea of messages that might be overlooked. Instead, you become a familiar name with a pre-existing rapport, significantly increasing your chances of getting a response when you're ready to discuss funding. This proactive approach sets you apart from the countless others who only reach out when they're in immediate need of capital.
How to start these conversations
The best way to start these types of casual conversations is to:
Many VCs are always looking to learn more about industries. It’s their job to know as much as possible so they can make the best investment decisions. If you are able to provide them with interesting information and insights, then you’ll open the door to building a relationship. This is something that can easily be done virtually, if you are trying to get attention from a VC on Twitter/LinkedIn, then this strategy works.
Asking for help is more effective when meeting a VC in person or through a warm introduction. The key is to request something small that allows them to work with you briefly without a significant time or monetary commitment. Use this chance to showcase your team's operations and skills. As an advisor, I observe teams in action; when you treat an investor as an advisor, they'll see the same. If they witness a well-oiled machine, they'll already have trust in your team's abilities when you eventually open the funding conversation.