While fundraising is a necessary part of running a startup, it can really suck. For many founders, it takes a ton of attention and energy away from doing what they actually want: running their startup.
Here are a few tips to protect your time and make it suck a little less.
The first type of investor is the Lookie-Lou. This type of investor doesn’t care about your time. They will think nothing of wasting it chatting with you without any intention of even considering your proposal. Avoid them at all costs.
The second type is the active investor. These investors invest quite frequently and are actively looking for good startups to invest in. They care about your time and are not only aware that you are actively running a business, but are sensitive to it and respectful of your resources.
The best way to safeguard your time as a startup is to choose the right investor.
How do you know which investor is which?
There are a few sites you can use to give you some good indications like Mattermark and AngelList. If an investor has only invested in a few things, and even then not recently, it may be a good indication that they are a Lookie-Lou.
Another way to vet investors is to set clear expectations of what you are looking for. This includes being forthright about desired meeting topics, setting a time limit for how long you can spend meeting, and that would you prefer a yes or no answer to your proposal.
A good way to set these boundaries with a potential investor is to send a calendar invite with a meeting agenda included. In the last minutes of the meeting, you can focus on asking about the next action step to avoid being given a “maybe” answer. This ensures that your intentions are completely clear. Not only does this protect you from Lookie-Lou investors wasting your time, but it also shows serious investors that you value theirs.
To avoid getting into unnecessary and time-consuming meetings with Lookie-Lou investors, try to preemptively vet them when you do cold outreach. You can simply tell them what you are working on and ask if that is something they are interested in.
When courting potential investors, it is a good idea to spend your time pursuing investors you’ve deemed to be active and a good fit for your brand rather than using a scatter-gun method of querying.
All of these tips are fantastic ways of preserving your resources and working smarter, not harder, for the benefit of your startup.