The vast majority of SaaS companies started today need significant funding to get off the ground. This has created an entire investment ecosystem that includes tens of thousands of angel investors, thousands of venture capital and hedge fund type companies and hundreds of thousands of eager founders hunting for money.
In the middle of my own Series A fundraiser for Readers Legacy, I decided to get help to make sure that I was doing more of the right things and less of the wrong things. One of my business advisors and an expert in raising funds for young companies, Judy Robinett, introduced me to John Livesay, the principal over at Selling Secrets For Funding. Livesay specializes in helping early stage companies to get their presentation down so they have the best hope for fund-raising success.
In a coaching session with Livesay, I asked him what where the three biggest mistakes that founders make when they are trying to raise money. Here's what he told me:
1. There is no confidence.
Investors want to invest in people who are confident, but not arrogant. Founders think they can "wing it" when they pitch, and they don't practice enough. They are afraid of sounding too robotic. The solution is to practice enough to be prepared, but still be authentic and have a conversation when you pitch.
2. There is no connection.
Most founders wrongly think investors will invest if they like the idea or app. Founders spend too much time on a product demo talking about how something works and giving details that are not important to the investors. Founders need to shift from their left brain and giving information on stats, to their right brain to become master storytellers. Founders need to sell themselves more than their product. Investors remember stories not numbers.
3. There is no commitment.
Many founders close their pitch with a very weak statement like "Any questions?" Instead, they need to invite investors to join their team "where they can make them a great return on their investment as well as make a positive impact on the world." Get the investors to want to take the next step by being very specific about what you want them to do and why they should do it.
Raising money is not easy. You have to take the time to get prepared. Follow Livesay's advice, and increase your potential for raising funds.