TBC: How to Build Momentum During a Fundraise

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Hey friends. Welcome to another episode of the back channel and today's episode. I want to talk about a call that I had with a startup founder who was running a pretty hype-y consumer app. And the advice that I gave this founder on how to build momentum during their fundraise and actually drive it to a close. Now, this is a pretty interesting founder with great logos in their background. Uh, and who was part of a great accelerator program that was introduced to me by a good friend, someone who also has a good eye for founders and startups.

Now this consumer startup. Was about to exit an accelerator program that was helping them build momentum and create introductions into great investors. but we're still not in a great market for fundraising overall. And in particular, I don't think consumer is all the way back yet. So this founder being a good founder, wanted to make sure they could do everything [00:01:00] they could to maximize their chances of not only closing, uh, around overall, but closing a great round. So the founder said, look, we have some meetings going on.

We have an interesting VC who wants to spend more time with this. I really want to build pressure. I really want to build momentum. Around what we're doing and show them what this could be. So the first thing they said was I have an idea for a post. A piece of content, a way to use our platform. And I think could go viral that I think could do well. And I want to know exactly how I should apply this to driving momentum towards a close. And my first reaction was, this is a pretty good idea. I had some notes on it, but it is a pretty good idea in a framework for all founders to think about not just consumer startups On what it means to drive towards a close. And at a high level, it's about [00:02:00] showing traction and newness in progress.

Wow. A fundraiser is taking place. I'll often talk about this analogy of a parked car versus moving train. Uh, parked cars. What a lot of founders do when they go out and fundraise, which is look at this company, my parked car. It's got a great door. It's got nice wheels. It's got a great color. Please invest in it so that my car can keep going.

Jason Yeh: What the best founders who are amazing at fundraising do maybe by design, maybe not, maybe just because their company is moving is they instead will show a moving train. Something that is going to continue going with or without an investor's capital.

And the feeling that they create is, wow. Look at this moving train. It's plowing ahead. It's making progress. I got to get on this train. One of the ways you do that is by showing progress. while Having conversations with investors. So while you're having [00:03:00] conversations with investors, you ship a product. While you're having conversations with investors. You put up numbers and close deals with customers. While you're having conversations with VCs. Something goes viral about your company. Right. So this high level approach to building momentum makes sense.

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[00:04:00] My note to her was don't have this be one hail, Mary. That has to work in order for it to show progress. Right. I challenged her to say. You know, have that one idea, but don't, don't rest on your laurels. Don't fully depend on one idea hitting. In order to create the momentum that you need to close instead, come up with five different ideas. Decide and focus yourself that you will push to launch one of those [00:05:00] each week leading up to a close so that with, or without a fully viral post, you at least show a pattern of shipping ideas, shipping, marketing ideas over the course of call it five weeks.

And so that was my first bit of advice for her around how to build this momentum around her clothes. And the note that I'll give you is, a lot of things in fundraising can be thought of as the thing that you do for fundraising. But really the, those things. The reason that they're good for fundraising is that they're actually good for business. And so when I said, Hey, come up with that market.

That marketing idea is nice, but why don't you come up with five? Yes. We're saying that in the context of fundraising, But actually overall thinking about marketing ideas, things that you keep doing on a consistent basis. That's good for business. Don't just think about one viral idea, but think about a process for continuing to come up with and ship [00:06:00] marketing ideas on a consistent basis.

It's just good for business. The next thing we talked about was, well, as I'm doing this, should I be sending this to the VCs? Who are looking at my deal as in, Hey guys, look at what we just did. Uh, it's really great. And it's growing or it's going viral. Now. I did say that. If it is going viral and you share that with him. That's good.

And you want them to see that? But even better would be if someone else sent it to them. If you send something directly to a VC, it can come off as desperate or thirsty. And if you just do a little bit of jujitsu, a little bit of indirect messaging, it will come off even more powerful. So what I liked sharing with this founder and other people is. Come up with a. Message an email, a Ford to your existing supporters that updates them on the new, amazing things that are [00:07:00] happening in your company.

Like say a viral post. And write it in such a way that it can be easily forwarded to investors and then go to those people and say, Hey. What'd you think about this update? Do you mind sending it over to the VCs that we're talking to ask them? If they've seen this? This indirect messaging. While seemingly no different than sending them the message yourself Can actually make a huge impact on how this update is perceived.

Okay. So those are a few of the ideas that I have around how to generate more momentum during a live process and how to make sure. VC's see it in the most powerful ways.

after advising this founder, they came back to me a little bit later saying that they were progressing to final meetings with investors. And had some questions for me. And the next episode of the back channel.

I'll talk about the questions that they had and my advice in response around them. All right.

I hope this episode of the back channel was helpful for [00:08:00] y'all. I'll see you next time.

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