By 
Fundraising is hard work. It’s a simple truth that every entrepreneur knows: Getting the capital to start or grow your business is often harder than running the business itself.
Or at least, it can seem that way when you’re in the fundraising cycle, with the endless meetings, pitches, and negotiations.
In my experience, the most time-consuming part of the process is relationship building. Although it might seem like there’s a formal process in place to raise capital—an application or pitch deck to submit, an opportunity to pitch, a decision made—nobody ever signs a check based on one interaction. (And for good reason—that would be super risky!) Instead, people want to get to know you, the entrepreneur, and to see your progress, even if over a short time period. If you can build this into your fundraising process, you’re more likely to see success.
I learned this lesson when I raised the first round of seed capital for my startup PopInShop, an online platform that connects brands and boutiques to facilitate short-term, cross-promotional shopping events. I was finishing my MBA, and through the university had access to a fund that invested in student-run businesses. The fund was overseen by an investment committee of 10-15 individuals, and each week, they evaluated pitches from two companies seeking capital.
I heard about the investing group when PopInShop was still very early-stage. We had just finished our business plan, and were still in the process of trying to figure out exactly how we would validate our business model and assumptions. We knew we’d need money at some point, but we thought we should wait to talk to investors until we knew more about our product, market, and plans to deploy the capital.
Fortunately, as we began to discuss the idea in public, our peers and advisors suggested we talk to the investment group. One person even went so far as to make an introduction to someone on the committee. We didn’t want to be rude, so we followed up.
And in that first conversation with the investment committee member, we barely talked about the business at all—instead, we spent most of the 30 minutes talking about our outlook on the retail industry and about our personal experiences with the space.
This led to a second meeting two weeks later, in which the committee member wanted to learn more about the business. Three weeks after that, she offered to sponsor our application and gave us a time to pitch the whole committee.
One of her recommendations to us, as she helped us prepare for the final pitch, was that we should try to get to know the other committee members. She helped us set up meetings with four other people. This was crucial because it gave us a chance to learn what their reservations might be before we really had to make our case. We heard what each of them liked and were skeptical of in our business model, and were able to give them a sense of who we were as entrepreneurs.
When the time came for our final pitch, we’d already had more than 10 meetings with the people sitting around the table. We knew them, and knew what kinds of questions they would ask and how to pre-empt them. More important, they knew us, and believed that we were the right team to tackle the opportunity we were presenting. And best of all, our original conversation had happened earlier than we originally planned, so we were able to show significant progress over time.
A few days later, we got good news: They wanted to invest!
So what’s the takeaway?
1. Scout the decision-makers
While I didn’t follow this step precisely, I still reaped the benefits of it (and I would definitely follow this advice next time): Figure out who the investors are that will be making the decision about whether to fund your company, and learn as much as you can about each of them. What industries do they have experience in? What companies have they contributed to in the past? What issues are important to them? Do you have any personal connections to any of them—a mutual friend or colleague, an alumni connection, a LinkedIn connection, etc.?
2. Get friendly
If you do have a personal connection, this step can be easier to execute. (Not coincidentally, this is also why networking is so important to success in business.) But even if you don’t have a personal connection, this step is still viable—investors are in the business of making money, and if you and your business present an opportunity to make money, they’ll usually take your call (or answer your email, as the case may be). This is especially true if you’ve done your background research, and know how to present yourself to each investor in order to pique their interest.
It’s incredibly valuable to establish contact with your prospective investors and let them get to know you on a personal level. Successful businesses are the result of the management team, not the business idea. The investors want to know who you are and why you’re the right person to run your company, so make it happen!
The more you can build trust with and get to know each of your prospective investors, the better off you’ll be when it comes time to deliver your formal pitch.
3. Make your pitch specific to the investors
You only have so much time to make a pitch and win over an investor, so you want to use your minutes wisely.
Once you’ve gotten to know the team of people you’ll be pitching to, you can tailor your pitch to meet their unique needs and concerns and avoid wasting precious time on issues that don’t matter to them.
At this point, you probably also know enough about your prospective investors and their interests to have a good idea of what kinds of questions they’ll be asking you during and after your presentation. Prepare good answers. Pre-empt the questions and include the answers right in your pitch.
Make your pitch specific to the people in the room you’re trying to persuade—the return on your effort will make it time well spent.
Allison is the co-founder and CEO of PopInShop. She has an MBA from Wharton, and previously worked with numerous tech start-ups on marketing and strategy.
