Creating FOMO: 9 Fundraising Tips From a Master Networker

Does approaching investors make you a little sweaty? You’re not alone.?

It can be hard to know how to present yourself as a founder when you’re pitching. Do you act too cool for school, or do you wear your enthusiasm on your sleeve??

Fortunately, Brian Gannon of Loop has some tips for creating hype around your company and being smooth while doing it. He raised $8 million over three rounds to fund Loop’s digital photo sharing frame that allows families to easily exchange precious pictures.

So how did he do it? With a little bit of smoke and mirrors and a lot of finding the right investor fit, you can get people excited enough to put up money.?

On an episode of the How I Raised It podcast, Brian shares his thoughts on how to build FOMO, proving you have traction, and numerous other tidbits to help you close a round and get the funding you need.?

1. Prove it

Social proof is a way to show traction from interested funders. Brian describes this in a somewhat crass way: “This kind of famous person believes in me.”?

If you can get an investor who is well-respected or famous in your community to vouch for your startup, you’re off to a great start. When you’re out networking, talk about your idea. Brian did this and garnered the interest of one of the early investors in Ring doorbells.?

2. The early honeymoon phase

You hear it all the time: investors want to see traction. And to some degree, that’s true. However, there’s something to be said for the beauty of the concept phase.?

“There's actually a good honeymoon period right at the beginning, when the dream is there, and you have no data to disprove the dream,” Brian says. “I encourage people to lean into that.”?

Some investors actually prefer opportunities like these, because often the entry price is lower than what it would be once there’s traction. You can position it as a chance for them to get in on the ground floor of an idea.?

3. Streamline your outreach

There’s no need to reinvent the wheel with investor outreach. And like with many things, simplicity is best.?

Does this mean to send out the same form email to every investor on your contacts list? No. But you can create a basic format that you replicate when reaching out. Customize a few details, but keep to the basics.?

Brian recommends keeping it brief and to the point. “This is what I do. This is what we're making. Is this interesting? Do you wanna have a phone call? Super concise, a couple points.”

4. Plan for a lot of meetings

Brian admits that he underestimated how many meetings it would take to close a round. If you’re thinking it’ll be in the tens, think more hundreds. Even AirBnB and Square had 120-plus meetings, and those are massively popular concepts. If you’ve got something more fringe, it could take many more.?

You might even have meetings when you don’t expect them. There was an investor he wanted to contact at an event who was having trouble getting an Uber. Brian offered him a ride in exchange for listening to his pitch. He ended up converting his passenger into an advisor for Loop.????

5. Find your believers

Rather than seeing an investor meeting as a chance to con someone into backing in your startup, see it more like dating.?

“You're not trying to convince people of stuff, you're actually trying to find your true believers,” Brian explains.??

You’re out there looking for the people that already see you and understand you. You’re not trying to change or fix someone into believing in you. Just like your one true love, the right investor will be on your wavelength without you having to sell it too hard. They’ll have experience with concepts like yours or understand your value. That’s the fit you really need, and even if it takes hundreds of meetings to get there, it’s worthwhile when you finally hit your stride with someone.?

6. Confidence sells

Confidence and how you carry yourself signal a lot to investors. That means pretending you’re in the power seat instead of the investor. They have the money, yes, but you have the opportunity. You have the ability to make their money grow and bring them into something bigger.?

Brian recommends coming to a meeting to pitch, but also having some good news in your back pocket. That could be another investor signing on. It could be a new product feature. Anything to show that things are going well and they should be excited to join you.?

Another thing to keep in mind? Your body language.?

“Investors see thousands of entrepreneurs, and they can see through your fears and all your baloney,” Brian says. Have confidence. You’ve created a startup from nothing. You are impressive and have a good investment opportunity to offer.?

7. Sell the momentum, create FOMO

Showing traction is a great way to prove momentum and get investors itchy to be a part of the fun. Brian suggests scheduling some early meetings with potential investors and saying we’re planning to raise in a few months when in fact you might be ready sooner.?

If your pitch is compelling enough, you’ll be getting offers to write checks in exploratory meetings like these.?

Too late to pretend you’re not raising? Another tactic is to put a deadline on your round. In reality, you may not have a firm date to close the round, but it helps give a sense that you need to get your funding in order so you can get to work on the stuff that actually makes the product go.?

Another FOMO inducer? Asking for slightly less money than you need. It’s better to oversubscribe a round than to not make your goal. That looks more impressive from a momentum standpoint. Just make sure not to blow it completely out of proportion by three or four times. Then you’re diluting everyone’s stake.?

8. Combine truth with a sense of mystery

Don’t lie to potential investors or fudge projections. That’s bad news all around.?

However, you can build on the hype you’ve created with the right language. Part of that is making investors feel important. No one wants to know if they’re the last people you’ve pitched to. A better way to frame it? You’re the first round of investors we’ve contacted.?

That might be the first round of investors contacted that week or that month, but they don’t have to know that.?

In other words, you don’t have to give away every detail. Maintaining some sense of mystique without lying is a healthy way to balance it.?

9. Be relatable

It’s tempting to be generic when pitching. If you show a broad concept and broad use of it, it makes your solution look like it appeals to more people.?

But it can be better to bring it down to a granular level with a specific use case. Brian found that bringing a tangible example to pitches was often more impactful than using generalities.?

Once he started using a customer testimonial, walking through all the real headaches that Loop alleviated, he found something a lot of investors with families could relate to. Telling one person’s story brings a product to life in a way that bullets on a slide can’t.?

And that touch of reality can make all the difference in reaching the right investor.?

Nathan Beckord is the CEO of Foundersuite.com, which makes software for startups raising capital, and also leads Fundingstack.com, a new platform for VCs and investment bankers to both raise capital and assist clients and portfolio companies. Users of these platforms have raised over $15 billion since 2016.

This article is based on an episode of Foundersuite’s How I Raised It podcast, a behind-the-scenes look at how startup founders raise money.