The following excerpt is from the staff of Entrepreneur Media’s book Finance Your Business. Buy it now from Amazon | Barnes & Noble | iTunes
As the founder and CEO of the HR platform Namely, Matt Straz has experience raising a growth round of funding. The following is his advice, from his point of view, on the process.
While there are many thousands of people and firms that can provide money to get a startup going, far fewer entities, perhaps just a couple dozen depending on the business, can fund a Series B or C. I raised my Series B round in 2014, and here is what I learned.
Kiss a lot of frogs
Finding the right venture firm requires meeting many of them, since most will pass on the investment no matter how well the company is doing. Whenever I realize there isn’t a fit, I often break up with the firm quickly, sometimes emailing a nice “no thanks” note as I leave their office. This makes company founders feel more in control of a process that is riddled with rejection.
Define growth
Many venture firms claim to be “growth” stage investors, but that term can mean different things to different people. When you get a call from a VC firm, establish upfront whether they have an established minimum revenue or annual “run…