A Definitive Guide to Efficiently Raising Capital During a Market Crippling Period of Quantitative Tightening

The North Star when raising capital is term sheets or signed sub-agreements, not appointments or meetings. It may sound obvious to say, but it's crucial to begin with the end in mind because that's what we're optimizing for.

Money > meetings for the sake of meetings.

As a founder, exec, or GP, your time is best spent developing your product, running operations, and building your team. Far too often, we see those members of a team tasked with fundraising lose focus on what should come first. Raising capital doesn't need to consume 40 hours of your week if done right.

Thesis: Solving For Investor Message Fit

North Star: Term Sheets / Signed Sub Docs In The Shortest Amount Of Time Possible

1. Investor Segment
2. Messaging
3. Channel
4. Presentation
5. Investor Due Diligence

Achieving Investor-Message Fit

Understanding Investor-Message Fit: Investor-Message Fit is a business state that occurs at the intersection of the investor segment (investor type), the messaging (what you say to them to get a meeting), the channel (how you reach them), presentation (the meeting), and due diligence process (what happens after the meeting).

When you achieve this state, you're able to pack out your calendar with mandate-specific investor meetings, have 10 groups in due diligence, and meet your funding requirements in weeks.

Solving for Variables: One must solve each of these variables or steps in order, with rapid iteration in real-time, to reach Investor-Message Fit state. The time it takes to close the round or meet your target depends on how quickly you can solve all the variables and reach the sweet spot. This is the same scientific approach one would use to optimize a marketing funnel.

Iterative Process: Starting with CPM, CTR, CPL, opt-in rate, lead-to-appointment rate, qualified appointment rate, closing percentage, cash collected, ROAS, and net return on spend.

Once the first metric is within KPI, you move to the next. In our case, when solving for Investor-Message Fit, you must use more deductive reasoning than cold hard data, although data is a part of it. However, the process remains very much the same.

Strategic Execution

Hypothesis Development: First, you create a hypothesis on the investor segment using deductive reasoning. This involves understanding the types of investors who would be most interested in your business and tailoring your approach accordingly.

Compelling Messaging: Next, create compelling messaging that garners attention and turns it into meetings. Your messaging should be clear, concise, and specifically designed to resonate with the identified investor segment.

Channel Identification: Identify which channel will be used to generate attention. Whether it's through direct emails, social media outreach, or networking events, choosing the right channel is crucial for reaching your target investors effectively.

Presentation Iteration: Create and iterate on your presentation. Your pitch should evolve based on feedback and data, ensuring it effectively communicates your value proposition and business potential.

Due Diligence Preparation: Ensure your data room and due diligence materials are thorough and provide confluence to your presentation. This helps build trust and credibility with potential investors, facilitating a smoother due diligence process.

Key Takeaways:

?? Focus on Investor-Message Fit: Achieving this state is essential for efficiently raising capital and meeting your funding goals in a timely manner.

?? Iterate and Optimize: Continuously refine your approach based on feedback and data to improve your chances of success.

?? Strategic Preparation: Thorough preparation and strategic execution are key to building trust and credibility with investors, ultimately leading to successful capital raising.

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