Fundraising Myths – And The Powerful Truth
Our culture teaches us that people who have, or seem to have, money are somehow superior and founders assume and defer to this myth. This feeling of inferiority, and your ability to overcome it, has a greater impact on the outcome of your raise that any other factor.
Founder commonly believe investors are more:
than they themselves are.
And this is just not true.
If you buy into the mythical status of investors you will then approach your fundraising using a framework that diminishes your power and eliminates your control over a critical process.
Here’s how believing this myth hurts you:
- It causes anxiety, hesitation, stress and even shame, in addition to forcing you into a deferential posture right when you need to be in control and a leader in your own process.
- It distracts you from your actual job – to nurture, educate and engage investors.
- It leads to time wasting as you jump through endless hoops in an attempt to be solicitous while establishing no expectations that investors engage in your process and reciprocate in the level of engagement necessary to get through a due diligence process.
And, as an added “bonus”, it is pretty much guaranteed to make you feel crappy about yourself and who needs that?
Here’s the truth.
The truth is, we all hold equal value and deserve equal consideration.
When I started working with founders on fundraising, I really believed that I was in the business of teaching skills. It was only after seeing a couple of talented entrepreneurs perfectly execute the tactical piece of their fundraising project and fail that I realized I had to explicitly address identity and challenge this investor myth if my advisees were to succeed.
Once I acknowledged this and embedded it in the work, everything changed.
Ultimately, not every raise will succeed but every founder who establishes a level playing field is armed with the ability to negotiate their value in their current venture and any endeavour they take on in the future. When this particular shoe drops, the exercise of fundraising can actually be enjoyable. A process of sharing something you are passionate about with peers who are interested and care about what you are doing.
Seed investors are generally not domain experts in your field, they are often investing their most sensitive asset which is their social and emotional capital. They risk looking stupid if they get it wrong. They need your guidance and support in this process and you need to lead.
Ultimately if you can acknowledge the reality of the seed investor’s position relative to yours, offering a piece of what you have created in exchange for their money will feel like an opportunity and not an ask.
The result? You’ll have a new perspective, greater self assurance and efficacy, and the ability to lead your raise with less stress, less time and better results.
All the best,