How I raised $10 million over Zoom: Learnerbly’s Raj Dey on tips for raising money
Be open minded. Today fundraising is global and investor appetite is at an all time high. An investor can come from anywhere. Whereas in the past you may have bumped into someone at an event, in a COVID era where these are few and far between you have to look online. A significant new investor who joined our Series A was Cliffe Killam, a US angel investor who runs his family office. He connected to me on LinkedIn and fortunately I accepted. We had never met. Nevertheless, we had mutual connections and Cliffe mentioned he had an interest in our space. After an initial exchange of messages and 3 or so Zoom meetings he decided to invest a 7 figure sum — probably the best return on investment you’ll get on a LinkedIn subscription.
Be prepared. My entire Series A process was conducted from start to finish over Zoom. I hadn’t met any of my new investors in person and a number of them were international. This is a new world of fundraising and you need to track the investors you want to reach out to. Research the most appropriate partner and find the best way to contact them. Have they done a deal in your space? If they have, perhaps you know someone in common. Have they commented about something relevant on social media? That could be a good opening. Then track the process from first outreach to first call to follow up call. Ensure it’s a tightly run process. You want to (as much as possible) bunch together the calls to ensure that when you (hopefully) get to a term sheet outlining the investment opportunity you have a few different options to consider. Remember, some investors are in the business of amassing knowledge about different businesses and sometimes they may simply be wasting your time. Figuring that out early on is key.
Leverage angels. Once you’ve figured out who you want to approach, try and find a “warm introduction” — ideally either an existing investors (angels or other institutions) or other entrepreneurs (preferably from the VC fund’s portfolio). This gives the investors some extra confidence or at the very least increases the likelihood of them agreeing to a call. If your existing investors are following on — also investing in your next round — be sure to mention that to the prospective new investor.
Line up some ‘champions’. When you start raising, word will get out. The VC community is very tight knit. If you work with other VC backed businesses like we do at Learnerbly, your clients may find out too (especially if you’re pitching to an investor who has also invested in your client). With that in mind, start preparing a list of customers who may be happy to act as reference calls for investors as it’ll inevitably come up (but be prepared to also be asked for references which you haven’t necessarily suggested). It’s worth holding back on formal reference calls until the final stage. Your clients’ time is precious. One way of ascertaining if the VC is serious is holding back those calls until a term sheet has been forthcoming.