This article was written by Sharam Fouladgar-Mercer, who is the co-founder and CEO of AirPR, a technology platform to increase PR performance.
Though many directors haven’t acted, they know how to coach actors because they’ve seen it all: from stars giving award-winning performances to the nosedives of failed up-and-comers. As a former venture capitalist, I’ve witnessed a wide range of performances too, from some of Silicon Valley’s brightest minds to novice entrepreneurs fundraising for companies whose only growth plans are “social media.”
I’ve seen firsthand what to do (and what not to do) in order to be a successful entrepreneur. Here, I share a few insights from this that have helped me excel as a startup founder.
1. Know your funding timeline.
When a VC asks how long the money will last, the answer is generally 18 months. If your answer is six months, it demonstrates that you’re inexperienced. This answer signals to a VC that you’re not asking for enough money, or that you plan on spending that money too quickly. If your answer is 24 months, it means that you’re raising too much money at once, or you’re not planning to spend on what you’ll realistically need to grow at a proper rate.
Eighteen months is generally enough time to grow significantly, but it’s not so long that investors will question how long you need to accomplish your goals. A year can work, but it raises the same issue as six months of funding: You’ll need to start fundraising again fairly soon.
2. Practice your pitch in at least two waves.
It’s easy to assume that, because you’ve seen newbie founders of consumer apps who have zero revenue get funded, you too will raise funding easily. Despite your big idea, pedigree and/or ambition, understand that a firm isn’t going to just hand over money.
Instead of pitching your dream VC firm first, pitch your second or third favorite first. Get some initial feedback, adjust your deck and then pitch to your top tier. Especially if you’re new to the startup game, you’ll get a lot of feedback that may surprise you. And the last thing you want to do is mess up your chances with your dream firm because you…