It’s a very clean question. I usually tailor an answer somewhat specific to their unique situation, but there are common threads that any entrepreneur can understand about early stage money in Atlanta. I do specifically mean this for Atlanta, because raising risk capital in different parts of the country will vary wildly. Some tips.
1. Keep your head down and power forward at all times. Raising capital is a consuming activity. It can be all-consuming for many entrepreneurs. However, at early stage when there are often only 2-4 people on the team, losing 25-50% of the team for any period of time can slow the progress down severely. It’s important to keep your eye on the ball that matters. Until you see that capital is imminently inbound, don’t let its pursuit consume you.
2. Build as if you will never raise money. Always remember that investors want to the guy who doesn’t need their money. So go ahead and build according to the plan of funding your growth with your own profits. Be an aggressive bootstrapper. Build, sell, learn –> then repeat. Keep doing this and your flywheel will start to turn.
3. Act as though you don’t need money. This means really believe in your plan and path to accomplish #2. If you don’t believe in your plan to grow the business with profits, then come up with a plan that you can believe in. I know this advice is contrary to the Valley mentality of users before revenue, avoid services at all costs, etc… but all I’m saying is that if you have this plan but you understand the alternative approaches, you are more attractive to investors. Once you have actually raised some money, you can change the game. But before you do, you are better served behaving like you don’t need it.
4. BE EXTREMELY AND EXCESSIVELY VISIBLE! The keystone to all this working to help you raise money is that the investment community needs to know about you. Paint a mental picture: it’s you sitting in the corner toiling away at something awesome while everybody else is dancing and singing about how great they are in front of the investors. Except, here’s the magic: figure out how to get a spotlight accidentally shining on you while you sit in the corner.
- Network your ass off: but do not directly ask each person you meet if they will invest in your company. Actually build real relationships.
- Be at lots of events: but only the right events, where the right people are attending.
- Pitch at demo days: but don’t pitch your future $100 billion market potential, pitch your traction.
- Go deep (not just wide) with your network: Don’t just meet at networking functions and trade business cards. Follow-up with lunch dates. Ask each lunch date for two contacts, and continue down that path FOREVER.
- Don’t ever disappear or give up on the networking and relationship building. Host parties. Plan trips. Be unpredictable. All these things will put your hard work in items 1, 2, and 3 in the limelight and investors will start to see something shiny that they think perhaps other investors aren’t seeing.
5. Commit to Atlanta. Atlantans love Atlanta. Especially Atlanta investors. The more deals that happen in the local ecosystem, the more everyone benefits. Don’t be shy about being proud of your city, making public your commitment to helping it move forward and thinking about the ecosystem.
6. Be confident and be bold. Building a company takes guts. If you’re up for the challenge and you take it on head first, people will notice. Specifically, investors will notice. Investors are looking for good deals just as much as startups are looking for investors. Have confidence.
It’s a great time to be raising money in Atlanta right now. Access to smart money and the people that come with it who can dedicate energy to your success are abundant. Now go make sure they know about you.
For more reading, here’s a post on Quora about expectations of dollar amounts when raising early stage capital.