A bit of news: We’ve closed our seed round, as TechCrunch reported. Andy McLoughlin (co-founder of Huddle) and Christopher Muenchhoff trusted us enough to invest again, and we’re glad to have TMT Investments aboard. We’re going to use the $700,000 raised to speed up product development and having a larger footprint in the United States, our biggest market.
Because we used our CRM tool Pipedrive for fundraising, I thought I’d share what we did and our results – perhaps useful for anyone raising funds for their startup, favorite charity or cause.
We actively started fundraising mid-April. One of the first things was defining stages in our pipeline:
Idea – This stage contained all the investors we wanted to connect with for this round. The main goal in this stage was to get some kind of response. We declared a deal lost when we got no response within two weeks from our follow-up email. By the way, about half of the prospects had contacted us through AngelList at some point, the rest came through AngelPad, our existing networks and actively asking for intros.
Connected – Deals got moved to this stage once we got a reply other than “No, thanks” from an investor. Main goal in this stage was to schedule a call, if investor showed interest.
Call/meeting done – A 30-minute call was a deciding factor for both us and investors about the decision to move forward. Main objective here was to identify mutual fit and serious interest (or move the deal to Lost.)
Considers investment – Deals got to this stage if we found serious interest from investors; in most cases, a number of emails were exchanged to answer additional questions.
Asked/received terms – At this stage we negotiated a lot, as not all interested investors agreed with our terms at first.
Documents signed – Speaks for itself.
We declared the deal “won” once money had been wired to our account. I’m obviously biased, but I must say Pipedrive was great for managing the fundraising process. It was a team effort, and each of us knew what was going on by just glancing at the pipeline. Because we used the email dropbox feature and added notes from calls to Pipedrive, almost all details were easily accessible as well.
What comes to results, this is what our fundraising process and numbers looks like in hindsight, expressed as a pipeline.
5 closed out of 93 – what happened to the remaining 95%?
We tend to be pretty analytical about pipelines, and naturally we’ve done a bit of a postmortem to our fundraising efforts. We got no response from 37 investors, so we don’t know why we were not an appealing investment target for them. For the rest, this is what we learned:
“Drop the ball” means no longer responding to emails without giving a clear reason. Needless to say, it wasn’t us dropping the ball.
We could do very little to overcome some of the objections – for example, in cases where someone had already invested in a competing company. But it was encouraging to see that “Too early, let’s talk at series A” was the No. 1 reason for not investing in us. We know what to do about overcoming this objection in the future!
If you have something similar ahead of you, perhaps the following is useful:
- Make sure YOU are managing the process. Don’t be afraid to declare a deal “lost” if you don’t hear back from someone within a reasonable time. This frees up your time to look for other opportunities.
- Be confident. Perhaps it’s obvious, but confidence in what you’re building and how well it serves the market is more important than the prettiness of your slides or AngelList profile.
- Reach out to more investors than you think is necessary. This may give you the luxury to choose whom you’ll be working with.
If you have any comments or questions on fundraising, or using Pipedrive for that, please get in touch or write a comment below.