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Ambition's Co-Founder and COO Brian Trautschold offers his advice for Y Combinator startups in the midst of fundraising efforts.
Fundraising during Y Combinator can be an intense experience. When I wrote my 7 Step Guide to Surviving Y Combinator, I mentioned I'd post a fundraising focused piece closer to demo day.
Well, by my calculations we are now exactly 3 weeks away - and I'm sure on the mostly sleepness nights, many founders have now allowed fundraising to infiltrate their dreams.
Advice from a W14 Y Combinator Alumnus
Here are a few strategies and lessons we learned while raising our post-YC Seed round for Ambition.
1. Put in Your Work Ahead of Time.
There is a reason I'm writing this guide 21 days in advance. Between now and DD, you have more than plenty of time to set up a few meetings, ask for a couple introductions, drink coffee/ talk too fast, and impress a few investors.
You should not - I repeat not - dedicate all (or even the majority) of those days to doing investor meetings. Once again: growth solves all problems.
But, as you all know, fundraising is important - and you should start putting your work in now if you haven't.
At Ambition, we made a concerted effort to begin taking targeted investor meetings (based on fit, recommendations, & market) about 18 days before Demo Day. What that meant, is on DD, we had put in our work ahead of time: we had a number of committed Yes's, we had completed a number of Safes in the bank, we had been able to generate referrals, and finally, we had practiced our investor pitch dozens of times.
2. Tell a Story People Can Believe In.
Storytelling is key in fundraising. On DD, most investors will only see your company for about 3 mintues. Before DD, maybe you'll get 20 minutes of non-phone checking time. If you don't tell a powerful story, investors will not remember or care about you. If you can identify what excites people about your business, product, or market - and guide them through a story that they can emotionally* invest in, they will be much more likely to physically invest in it.
(emotions like: pain, excitement, frustration, greed, fear, happiness)
3. Find Your Feathers. (aka Plumage)
Every startup is going to find an up-and-to-the-right graph to showcase. Why does yours matter and why will it attract investors?
It is incredibly important to determine the angels or aspects of your startup that attract people (like YC batchmates or partners) and make sure you showcase those extensively. Don't waste time on boring.
If you haven't honed in on this yet, schedule office hours or start polling your friends for help.
4. Make a Few Layups Before You Take Any Threes.
In basketball, whether warming up or playing a game, its always nice to make a layup or two before attempting any longer shots. Fundraising is the same way. Practice your pitch with a few valuable, low risk (i.e. not star-studded) angels before you set up that pitch with your dream investor.
Even better, get a few commitments and then utilize those to get referrals up the chain to said dream investors. Warm up and build confidence before launching the deep ball.
Remember, investors are spineless. Its much easier to jump off the high dive when a few others already survived making it to the pool.
5. When Possible, Manufacture Demand/ Deadlines/ Limits.
Ambition is based in Tennessee. We told every investor we talked to before, on, and after DD that we would be on the red-eye back to TN the Thursday night following DD to go rally around our team and celebrate our progress during YC.
It wasn't a lie, we really were - and that flight became an excellent (artificial) deadline to complete all but two of our key deals before that flight.
6. Keep Your Head Up.
You will get a lot of No's. Many times, people just don't respond, skip meetings, or forget to follow up. It sucks and its unprofessional. But you have to shake it off, keep your chin up, and keep moving. There is no time for a pity party or founder infighting or the blame game. Rally around your team and keep slogging.
Remember, it was exceptionally hard to raise money for even the best companies; as Sam recently said, "because great companies often look like bad ideas at the beginning".
7. Realize Your Company is a Marathon.
Don't mistake Demo Day as a finish line with clear winners and losers. In the days after DD you may be insanely busy finalizing Safes or you may be hearing crickets - regardless, you must focus on the fact that your business will thrive based on customer or user growth. Not the number of angel investors pinging you or the VCs who want you to come by for lunch.
Fundraising takes an amazing amount of energy and time. It is distracting. It takes your focus away from other aspects.
It will at times be so frustrating you question your business, which means you must summon even more energy and resolve. Realize it is a means to an end: the companies that breeze through fundraising still have to wake up in the morning and build the business - just like the companies that struggle.
Your company will not win because "you fundraised really easily". Your company will win because you figured out how to make it grow and continually build stuff people want.
Good luck in a few weeks YC s14. If you have any questions, feel free to ping me at @btrautschold or @AmbitionSales.
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