Finding funding is tough. The challenge can be especially daunting as a startup seeking its first investor to write a check. Four San Diego founders shared their advice for landing that first deal.
Exposure and Practice
Samantha Urban gained her company’s first investors through a professional speaking engagement.
Urban advised a healthy balance on pitch competitions and events, for both the exposure and the practice. But she also recommended being judicious about which events to go to.
“You’re putting a lot of effort and time into preparing for those stage pitches,” she said. “Be conscientious as a CEO of which events you’re going to pitch at. If you don’t have the ability to follow-up with people, it’s a big waste of your time.”
Food for Thought
At first, Afif Khoury self-funded Soci. But when he was ready to seek funding, he made a list of everyone in San Diego who had sold a tech company or invested in a company that exited. Then, he started having lunch with those people.
“I have a list of everyone who’s been successful in tech in San Diego,” he said. “My investors are people on that list. That came with a ton of advice.”
Adam Harris recommended a similar approach — he said he would go into every meeting with a game plan, with the idea of whether that meeting could lead to an investment, connections, or a supporter of the company. He was able to get introductions to potential hotel clients and Cloudbeds’ future vice president of sales through these meetings.
“There’s money that comes with value, and there’s money that’s just money. We were good about having a mixture of both,” he said. “We wanted people who would be great cheerleaders for the business and celebrate our success along the way.”
Flip the Table Immediately
Urban advised researching potential investors, including what kinds of companies they invest in and how many investments they make in a year.
“Flip the table immediately. Find out if you even want them. Do as much due diligence on them as they’ve done on you,” she said. “Go to portfolio companies that they’ve invested in, and find out what it’s like to have them as an investor.”
She also said knowing and asking questions about a potential investor changes the dynamic of the conversation. The same as walking into a job interview when you’re employed, she advised walking into meetings with investors before you’re in need of funding, and treating it as a conversation.