At Visible, we tell startup founders that fundraising is a 24/7/365 proposition. Even if you aren’t actively raising money, you’re still engaging with current and prospective investors, building your brand, and telling the story of your company. All of those things make raising the next round easier.
But if you are actively raising, the intensity cranks up on everything. It’s little wonder why many regard raising money as the most important responsibility of a founder-CEO. Doing it properly demands a great deal of time, energy, and effort.
The problem, of course, is most founder-CEOs also have a company to run. Even if you agree as CEO that fundraising is the most important thing you should do, you still may cringe at doing it. The idea of taking valuable hours out of the business’ day-to-day probably seems, if not impossible, at least very impractical.
Luckily, that doesn’t have to be the case. Don’t get me wrong: If you’re actively raising capital, you will spend less time in the day-to-day of your company. But if you follow these five steps, you can raise money without seeing your business suffer.
1. Decide on a Point Person
In many startups, CEOs act as lightning rods for emerging problems, tough decisions, and other high-level obstacles that come up. This approach has issues to begin with, but during a raise, it doesn’t work. Period. That’s why the first step in preparing your company for a raise is appointing a new lightning rod.
The most likely candidate is a co-founder, but any senior-level employee you trust can be the new go-to. Sit down with them, make sure they’re comfortable taking on the extra responsibility, and then talk about how you’ll stay in sync while you focused on raising.
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I’d suggest setting up a new meeting between yourself and your point person, one that takes place every 1–2 weeks. In this meeting, you’ll touch base on anything your point person thinks you should be aware of, plus discuss any major decisions you need to make.
Once you’ve established your point person and set up a communication rhythm, there’s a follow-up step to take. In order to truly save yourself time and effort, the rest of your team needs to know about this new arrangement.
2. Communicate With Your Team
When a CEO focuses on raising funds, the entire team must know about it. A fundraising cycle can bring a great deal of energy to a growing startup, but only if everyone is kept in the loop. If you’re already writing a Friday note, make sure to include details about fundraising progress when you can.
Team communication is most important as you begin the fundraising process. Your team should know that you’ll be spending less time on the day-to-day as you fundraise, and you should set expectations for what that means for the business. Make sure your team knows who the designated go-to person is, and what other responsibilities you plan to hand off. This helps keep everyone on the same page.
Also, empower your team to tackle problems on their own whenever possible. One of the incidental benefits of actively fundraising is it can give the rest of your team a chance to step in and level up. You should let them.
3. Hand Things Off
Most founder-CEOs are surprised when they discover all the responsibilities they keep for themselves. That goes especially for what could be handled just as well (or better!) by someone else. It makes sense why this happens. Founders are often doers, willing to spend time in the weeds of the business to accelerate progress.
But this behavior, which is so essential when the company is in its earliest stages, becomes a hindrance as the business grows. Jeff Seibert, co-founder of Digits and Crashlytics, argues that your most important job as founder-CEO is to find out where you spend most of your time—and then fire yourself from that position.
Easier said than done? Yes. But the demands of a fundraise offer a great opportunity to put this theory into practice. Here’s the best way I’ve found to this:
- Make a list of every responsibility that occupies a significant portion of your time.
- Get detailed and granular, listing each individual responsibility separately.
- Put a single line through anything you feel you must keep for yourself.
- Write down the names of team members who can take the remaining responsibilities.
Most of what you delegate will go to co-founders or company leaders, but consider what you can hand off to other team members, too. Don’t try to do this alone: Bring in team members to help you figure it out. Have them go through your list and see where they agree or disagree.
When you have your list, have the necessary conversations to start handing items off. Once you’ve done that, do your best to truly let those items go so you can focus on the task at hand. You’ll have to, or this next step will feel impossible.
4. Block Your Time
Effective fundraising isn’t something you can get done in neat little time blocks. But there are certain elements of a raise that can. Tasks like outreach, follow-up, and even some meetings can be kept to time slots that you set aside for fundraising activity.
If you can knock out most of those items during designated times throughout the week, you should be able to focus on other important issues outside of these blocks. This technique brings a little order to the chaos of raising a round of funding, and a little order can make a big difference.
There are plenty of great resources on how to do this. Here’s a great blog on how time blocking can help you get more than 60 hours of work done in a 40-hour work week. Blocking your time is a great way to self-automate, which sets you up to crush the last step.
5. Track Your Raise
From list-building and prospecting to pitching and follow-up, fundraising is very much a sales process. That’s why it’s so perplexing to see founders fundraise without any sort of tracking in place. Trying to fundraise without a system for tracking it is like trying to sell without a CRM.
The number of investors you speak with will vary. Entrepreneur-turned-VC Mark Suster recommends that you start with a list of 40 investors when preparing for a raise. At Visible, we’ve had founders tell us they talked with anywhere from five to more than 50 investors before making a deal.
Regardless of the exact number, the volume and complexity of investor interactions during a raise are too much to manage in your head.
Some founders look to an actual CRM to manage these interactions. More commonly, founders opt for a spreadsheet, which provides focus and flexibility while keeping potentially sensitive information out of a company-wide system. At Visible, we built a Google Sheets template called The Fundraise Tracking Tool, which we give away for free to anyone who wants to use it.
All founders should choose the method or tool that works best for them, but I’d strongly caution against the “I’ll just keep in my head” approach.
Parting Thoughts on Raising as a Founder-CEO
Most founders, understandably, feel uncomfortable at the prospect of spending less time in the day-to-day of their business. The reality, though, is there is no way to fundraise properly without taking time away from other responsibilities.
By following the advice above, leaning on your team, and keeping yourself organized, you will raise funds faster and smoother than charging ahead without a strategy in place. You’ll also secure essential resources and set your company up for future success.