We are finalizing our $1.2 million Seed round for our startup. A few lessons learned.
1. Have a co-founder. There are ups and downs, and it's great to have someone there to level out the emotions. Plus, having more than one founder is attractive to investors.
2. CB and BYU are powerful. I met my co-founder on CB. We found our lawyer on CB. Our first committed investor came from CB. 7 of our 10 investors are BYU grads. We already have interested institutional investors for our Series A, and they are all BYU grads.
3. Relationships matter. I had one 20 minute discussion with a large-check investor before he committed. The first 15 minutes we chatted about BYU sports. The next three minutes we chatted politics. The last two minutes he asked me how much his buddy was investing and said he would match it. He's never seen our pitch deck. Never read our investment memo. But he trusts his buddy.
4. FOMO (Fear Of Missing Out) is a powerful tool. Every time we got a new investor committed we would go back to all existing and interested investors to share the good news. This provided momentum and led to commitments from undecided investors. The first investor commitment is the toughest. Now that we're closing our round we are way over-subscribed and have to say no to 10+ people.
5. Smart money is extremely important. Not all checks are created equal. Some investors provide value far beyond the cash. For example, we have a couple investors with large social media followings we'll be able to tap into. Their check may only be $25k, but they add a lot credibility to what we’re doing.
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Originally posted on Nov 24, 2021 at 10:46:01am
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