Tactics for Creating Investor Demand …
So I’d like to share some tactics I’ve seen successful entrepreneurs use for raising money.
1. Your first investors should be your last investors. If you make people money in the past they tend to invest again and will likely give you good terms.
2. Come to the table with a structure that you are willing to accept. Don’t state it out front what it is but if you allow your investor to start dictating, you’ll see a significantly worse deal. Say I am looking to raise X at Y valuation with Z terms. Be confident when you state what you are looking for and justify it. (no one will believe your projections but its not actually your projections that matter, it’s the process you used for creating them and the confidence (not arrogance) you have in hitting them.
3. Create personal relationships with your investors, even if they don’t invest. Talk to people as people, not as dollar signs. “I’d like to work with you, you’re a cool guy and I think would be great to have on my board” will make someone feel good. If you make people feel good, they are more likely be a little nicer and flexible.
4. Create false boundaries.
This is a tactic to always use. Set up multiple terms and in ranges you’re wiling to accept. Make sure some of the terms are ones that you can completely concede and set up boundaries where the minimum is higher than you actually want.
5. Don’t need the money and people will want to give it to you.
6. Make sure you’re being talked about. When people socialize around something it creates more demand.
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