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I want to share publicly the advice I've been giving so many of my portfolio companies of late.
1) tl;dr only fundraise now if you are wrapping up a raise or really need a little bit of money. But NOW is really a horrible time to be raising.
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1) tl;dr only fundraise now if you are wrapping up a raise or really need a little bit of money. But NOW is really a horrible time to be raising.
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2) First, there's the usual issue of the end of the year. US Thanksgiving is in a couple of weeks. Major holidays are in Dec.
If you don't wrap up your raise by Thanksgiving, it's going to be tough to get things over the finish line in Dec.
If you don't wrap up your raise by Thanksgiving, it's going to be tough to get things over the finish line in Dec.
3) In addition, this year is a CRAZY yr! There's just so much more going on at a macro level. There's COVID. There's the elections today (which will be a big thing on people's minds for many days or weeks)
The mindshare for your round really isn't there.
The mindshare for your round really isn't there.
4) So if you're out raising & even if there are investors interested but they don't seal the deal this yr, it will look bad if you're on the mkt in Jan.
People will wonder, why didn't you close your round? There must be something wrong. This has happened to portfolio cos before
People will wonder, why didn't you close your round? There must be something wrong. This has happened to portfolio cos before
5) The truth is - a lot of investors are not working on new investments. Many ppl are out phone banking or glued to election news. Others are trying to check in on family and make sure they are ok with COVID. And then there's just the usual checking-out because of the holidays.
6) There's a rush right now for companies that are *wrapping up* their rounds. If you have been actively fundraising in Oct, I would really try to push to get answers this wk or next wk.
7) Even for investors who are usually active (such as us!), our top priority right now is in helping our existing portfolio companies with their raises so they can get across the finish line in time. And the ppl they are pitching are doing the same with their cos.
8) So what do you do if you are running out of money? Maybe you try to raise a small round - just to tie you over until Feb. And then go out in Jan and do a full-fledged round then.
Focus on quick checks even if they are small.
Focus on quick checks even if they are small.
9) This means mostly angels. Maybe a handful of microfunds. Ppl often ask me - how do you meet angels if you're not well connected? These tips might help:
10) tl;dr
if you've been doing investor mtgs, wrap them up - by Thanksgiving if possible.
if you need $$, do a small tranche w fast $$ to tie you over
doing a full raise ($1m+) starting now is a BAD idea IMO. I have advised all my port cos NOT to do this. but just my $0.02
if you've been doing investor mtgs, wrap them up - by Thanksgiving if possible.
if you need $$, do a small tranche w fast $$ to tie you over
doing a full raise ($1m+) starting now is a BAD idea IMO. I have advised all my port cos NOT to do this. but just my $0.02
