Paul Singh on Venture Capitalists and Raising Money

Guest Author Feb 12, 2012 Tweet

Last week I got a chance to listen to Paul Singh from 500 Startups talk about raising money at The Fort. First of all, I have to say that almost every sentence Paul uttered could have been used as a quote on its own. Below are the best ones, which I broke down into 3 basic steps for raising capital for your startup.

Step 1 – When you are ready to start approaching investors, do not run around knocking on every door. Have a targeted approach.

“Think of investing as phases. Create a hit list of investors and sort them by ranking. Take the people on the bottom and test your pitch on them first. Pay attention to the questions they ask you, because there is a 90% chance you will get those questions again.”

Step 2 – Once you’ve selected your investors, do not cold call them – use referrals.

“Look for mentors who can introduce you. Also, you don’t want to pitch the first time you hang out [with the investor]. Your goal the first time you meet is just not to be weird.”

Step 3 – You got your foot in the door – now it’s time to pitch.

“Stop making decks! Show a demo or use wireframes.  If you have something awesome to share about your startup, do not wait till the last moment to say it.”

One more thing to keep in mind:

“Investors are people too. Their attention span is very short, so you have to be meaningful.”

When you prepare your pitch or create your profile on AngelList or Gust, make sure you share something that makes you stand out, because “there are startups everywhere!”

And finally, a great closing quote:

“Venture capitalism is a business which has to be disrupted.”

Editor’s Note: Author Gulnara Mirzakarimova is the founder of Two-Side Brain, a DC-based organization founded in December 2011 to bring startups, mentors, and investors together.  You can find her on Twitter at @GulnaraDC. 

Photo courtesy of Francis Luong – @francisluong