Managing your Fundable Plan will certainly involve keeping track of all your potential investor prospects along the way.
The problem you run into as you begin talking to an increasing number of investors is keeping tabs on where you stand with each, where you were supposed to go next, and who you’re starting to lose contact with.
The most important aspect of raising capital is remaining incredibly active throughout the process.
This can all be addressed by creating a quick spreadsheet detailing your activities.
Organizing your Prospects
The goal of keeping on top of your capital raise is to continually move your most likely prospects to the top of the stack without losing track of the other candidates you are speaking to.
The capital raising process is a long series of orchestrated follow-ups that requires quite a bit of rigor on your part.
Consider segmenting your list into these categories:
Active Discussion. You are currently having a back and forth conversation with the prospect and the discussion is ongoing.
Waiting on Response. You’ve attempted initial contact with a prospect but have yet to get an initial response. These can easily add up if you’re looking at a broad prospect list. As time goes by it will be helpful to know how long it’s been since you initially tried to reach out to a prospect so that you can attempt to re-connect if appropriate.
Low Interest. The prospect has shown some sort of response to your deal but isn’t actively requesting new materials or information. This tends to happen as investors are managing many deals at any given time making it easy for you to fall off their radar unless they are actively trying to get a deal done with you.
No Interest. This is a category for investors that you’ve spoken to and clearly have no interest in moving forward. It’s important to keep track of these investors so you can catalog their reasons for not investing. You may find later that there is a trend amongst them that you can react to and adjust to accordingly.
Managing Sent Materials
With each contact you make you’ll almost certainly be shipping a fair amount of documents back and forth to bring them up to speed on your deal.
The challenge this presents is that your documents will likely change over time, as you make updates, leaving you with little record of who has seen which version of your documents and even which documents they received to begin with.
To help manage this, it’s helpful to keep a log of what documents you sent and which version you have sent last.
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{C}Use your Prospecting List religiously on a daily basis to make sure you’re not missing any key follow-ups with your candidates.
Managing Follow-ups
The capital raising process is a long series of orchestrated follow-ups that requires quite a bit of rigor on your part. Use your Prospecting List religiously on a daily basis to make sure you’re not missing any key follow-ups with your candidates.
The goal isn’t to prove that no one else will ever compete with you. It’s to prove that when they do, they will lose to you hands down.
To that end it’s helpful to create a column to track the dates of your last contact with a prospect so that you can determine whether too much time has transpired since your last discussion.
Stay Active
The most important aspect of raising capital is remaining incredibly active throughout the process. In addition to identifying new sources of capital, you’ll want to stay in touch with existing contacts on a regular basis, even if nothing major has transpired.
Fundraising is like any other sales process that requires a great deal of planning and a ton of determination.
Investors are inundated with business pitches so the only way to stay at the forefront of their minds is to maintain constant communication with them throughout this process.
Investors see thousands of business pitches, so they often defer quickly to Social Proof to help them determine whether other smart, respected people have spent the time and attention with your product that would, in turn, warrant the investors’ attention.
Summary
Fundraising is like any other sales process that requires a great deal of planning and a ton of determination. It also requires a fair bit of time. A successful capital raise can take over six months.
There are many investors and there are many deals. It’s important to realize you may have to kiss an awful lot of frogs before you find your prince or princess. You’re going to likely churn through lots of hopeful prospects before you get traction with just one, so stay on top of the list – it’s your lifeblood for a capital raise.