Fundraising 1.2MEur in times of COVID: a thoughtful journey
1. I made it all happen by myself
Good, now that I have your attention and you think Andrea Orlando is a big idiot with an ego problem, we can set the record straight. Although you could say that the final responsibility was on my shoulders (if we hadn’t reached at least EUR 300 000, I would have resigned, said bye-bye to Wise Guys, and spent the rest of my life playing guitar), this fundraising campaign was 100% a team effort. Without the marketing team helping on the visibility, without our Venture Partner sharing her investor network, without our Head of Growth sharing tips on how to contact potential investors…this would have not happened, especially considering these difficult times. Have that in mind when you write on your CV “single handedly fundraised EUR 1.2 million!”
2. Fundraising started 24 months before fundraising
In 2018 I did not know about Cristobal and Wise Guys’ expansion plans. Nor did I know the unexpressed potential of the Italian ecosystem where we were all headed. But I was alert, assertive, and very welcoming to network opportunities. I openly shared my experience, my vision for investing, building successful startups. When there was an opportunity to facilitate an introduction, I acted upon it. When I was asked for mentorship, I gave my mobile number. And when I was asked for career advice I sat down and opened my phone book. I have never asked for a fee or anything in return for making things happen. 24 months later, I had built a network and credibility that led us, in the middle of a global pandemic, to secure financial resources to invest in 40 startups in the next 2 years.
3. Skin in the game
Skin in the game doesn’t only mean being fund’s no. 1 private investor, but also delivering passionately at meetings why you made this the most important project of your adulthood. I answered passionately all the questions about Startup Wise Guys in Italy. I made sure to deliver all the channels’ requests, all the opportunities for visibility, all the paperwork to perfection, as I knew that not only investors would have not forgiven a mistake, but I would have not forgiven any mistake to myself.
You are investing so much time and your expectations are so high, but you may not always get the investment ticket you were hoping for: you will get respect thou. And respect in this game you can use.
4. Transparent 200%
I cannot stress this enough. The moment you short cut your answers to a Q&A session you lose in 1 second half of the credibility that you built through months of hard work. You cannot convince everyone about the opportunity that you are presenting but you can convince a good portion if you open your books and share your track record, your experience, and also… your failures. My first startup did not last more than 15 months but was second to none in terms of lessons learnt. Why not share that knowledge capitalized transparently bringing the curious souls that you will meet in this journey on the same page?
5. The digital animal
Fundraising in 2020 is more than anything a digital effort at its finest moment. but if you think only about the travelling limitation overcome by a webcall, think again! Obviously, the main channel to access investors was digital and we cannot compare the level of visibility we got from there to any other non-digital channel. But more than that: I qualified potential investors of my network using PROSPECT LABS, I kept track of investors using a CRM, in over 75 days I had 14 evening Zoom web sessions, a total of 18 short web calls booked via Calendly, 362 messages sent via LinkedIn. The opportunity to be supported out there is enormous. If you think your calendar, your email, and your phone is all you need… you are underestimating the game.
6. Speak your investors’ language
For many reasons, you could compare fundraising to sales, and sales cannot happen without reaching your prospect’s mind. A dear professor at INSEAD used to quote Alan Greenspan “I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant.” The power of that sentence has always been in the back of my head while talking to potential investors. So, in a world with an excess supply of financial instruments, how do you get somebody’s attention and finalize an investment deal?
Well first, make them an offer your prospect can’t refuse. I don’t mean generally a prospect. I mean your prospect. For example – is tax credit more interesting than other factors? You just have to deal with it and find a way to highlight it in your proposal. Is internationalization something your prospect is interested in? Well, Startup Wise Guys has 200+ international startups, so you could have not come to a better place?
Do you follow?
Secondly, respect their tempo. Don’t spam, don’t clog their mailbox or telegram – they are busy. If they are interested, they know where to find you.
Thirdly, understand their questions. I mean understand them. Are they asking about a startup Business Plan? Why? They have probably never invested in startups before so here’s your chance to share the metrics that really count in this game.
7. Don’t spread yourself thin
This is a game of stamina and the last thing you want to do is start chasing every lead. I have received countless offers to talk to this VC or this other club deal maker. The truth is that I knew exactly who our proposal would be attractive to, and while always thankful for the offer, I pursued only the channels that I knew were going to lead me somewhere.
8. It ain’t over till it’s over
We fund raised half of the money in the last two weeks of the campaign. In the final week, we raised almost EUR 500 000, after a dormient period of nearly 4 weeks. I sent the last reminder to some interested investors on the night before we closed the campaign. This is the marathon of finance related jobs. You can’t just give up halfway through your race and assume somebody else or the “market” is going to do your job.
Fundraising is not an ATM (nor is crowdfunding). Whether it’s a EUR 3 000 ticket or a EUR 30 000, it is somebody else’s money and they are trusting you with it. You have earned your investors’ trust because you showed respect for their availability to invest. If you grew up where I grew up, you learnt respect for money from your father. You learnt that respecting and fearing are not the same thing, and while you are aware of the responsibility you have been given, you are also aware that you will deliver what you promised.
Andrea Orlando – Managing Partner (Italy)