The truth about momentum in fundraising

Greetings, Chief Storytelling Officers.

I recently finished the original Red Rising trilogy. One of my deepest held beliefs is that great storytellers read fiction. Especially sci-fi and fantasy as they teach us how to world build. If you’re looking for something interesting, I highly recommend it.

Let’s get into how to build momentum for a fundraise.

-Robbie

The truth about momentum

I got this text from one of the founders I coach this week and I have to say I get so hyped when I see these messages. I know how stressful fundraising can be, especially in the current market. So here’s how this came about and how you can pull off an oversubscribed round too.

Things are never smooth at the beginning. That’s because fundraising isn’t a natural thing for the vast majority of founders. They’d rather be working on the product, building the tech, and working with the team.

So the initial stages are always shaky. The founder has doubts about how the round will play out.

That’s step one to overcome.

If a founder has doubts about the round, the doubts will destroy the raise. It’s the famous Henry Ford quote in action “whether you think you can or you can’t, you’re right.”

Now I will tell you something about this raise in particular. There wasn’t any momentum at the start. It was a cold start.

It wasn’t in AI so it wasn’t hot. This wasn’t a multi time founder with deep connections.

So without those things we needed to create initial momentum.

Step two of the approach is all around storytelling.

I know you’re shocked. Here’s why I say this is the initial momentum.

The Founder Origin Story and Startup Vision Story gives founders something tangible to believe in. When they see it and hear it they become more confident. (This is exactly why we’re building Potential AI for founders)

There’s a weird thing about confidence. Studies show that people think confidence makes someone more competent. What this means for a founder is that by having a story the believe in, they start showing up as more competent to the people they share it with.

So in this case the founder had a few conversations with advisors, customers, and a small handful of investors to test the story.

It worked.

All of a sudden the founder had both internal validation from themselves and external validation from these other people.

Now realize this process took around 4 weeks to get it right.

With some initial momentum it was time to step things up.

This is where we work on becoming compelling or magnetic. Step three reminds me of this scene from Talladega Nights…

A bit aggressive but it’s the right idea.

I have a first meeting process I teach founders when I work with them. It’s aggressive, high difficulty, and for that reason much more effective when done right.

It’s not something I give out publicly because it is simply too easy to mess up without guidance. What I can tell you is that the first meeting process is a big part of the secret sauce.

We leverage massive frame control, pattern disrupts, and psychological signaling. These were things I found wildly effective as a criminal prosecutor and now we use them in fundraising.

The toughest part here is that founders feel scared that they might push investors away. What happens is the exact opposite. The founder shows up as a winner in the investor meeting.

Which is exactly what happened in this fundraise. The founder went all in.

This is where momentum really took off.

Once momentum was flowing with first calls moving into second calls and second calls moving into diligence, the race was on to secure a lead.

This was the final step.

Combine the belief from step one with the storytelling of step two with the compellingness of step three and add in a tight and professional process to push it over the finish line.

That’s exactly what happened. A big lead came in.

All of a sudden even the people who had passed earlier in the conversations wanted back in.

In 3 months we’d gone from a founder unsure if they could raise their round in the current climate to an oversubscribed round with a cap table of amazing investors that perfectly aligned with the founder and the vision.

At first there was no momentum. Then there was a little bit of momentum. Over the course of that final month it went from a little bit to overwhelming.

Nothing had changed in the business.

Raising capital is about perception.

You might not like hearing that but it’s the reality. I’d rather tell you the truth than say what you want to hear.

I want more founders having oversubscribed rounds. You deserve it for the work you put in day after day to build your company.

So remember…

Step 1: Get rid of your doubts

Step 2: Storytell like your startup depends on it (because it does)

Step 3: Become compelling

Step 4: Professional process to seal the deal

I can’t wait to hear about your successful round in the future.

Resources for founders

Great podcast from Paige Finn Doherty on fundraising and pitching (VC at Genius Ventures).

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Podcast I did with Alex Lieberman of Morning Brew on pitching, storytelling, and fundraising.

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Interesting data from Peter Walker and the team at Carta on time between funding rounds.

Two ways I can help with your storytelling or fundraising.

1. Join the waitlist at Potential AI. At Potential AI we’ve built the platform for founders to walk through our process and let our AI craft your 3 minute long Founder Origin Story and Startup Vision Story. Another way to say it, our AI builds your story to raise capital.

2. Apply to work with me privately over at Competitive Storytelling. This is one on one work typically for Series A and later companies given then expense and criteria I look for in a founder.