September 7, 2016
Everyone hates meetings. Which is a problem. Because meetings are essential. And since no single meeting is perfect, the only solution is to have as many meetings as possible. There’s even a rule of thumb: Plan on enduring 200 meetings over ten weeks if you want to wind up with one million in seed funding.
That’s four meetings each business day. It’s a brutal number. Here’s why you should try it.
The 5-100-500 Rule
500 Startups partner Elizabeth Yin coined the term “5-100-500” after considering the dedication needed for fundraising. How can you look at the process in a way that best clarifies how difficult it is? Here’s Yin’s solution:
“I made up a rule of thumb: 5-100-500. Over 5 weeks, meet with 100 investors to close $500k in your seed round. If you want to close $1m, double all of these numbers.”
How It Works
Well, it might not. This isn’t a science. But you need practice at pitching and you need a sense of urgency. You’ll get both from a jampacked schedule. Better yet, you’ll have a lot of momentum, since you won’t be giving yourself time to cool off or start dreading the next meeting before you have to do it.
And there’s one more important reason behind why you’ll want to take so many meetings:
“If you cannot close $500k after doing about 100 meetings over the course of about 5 weeks, then it’s probably not worth spending anymore time on this fundraising process.
One of the reasons for having this rule of thumb is so you can know when to stop fundraising. Sometimes you just need to throw in the towel on fundraising, make more progress, and then go back out and hit the pavement again later. And that’s ok. There’s nothing wrong with this.”
And, if just the thought of 100 or 200 meetings makes you give up, then you know you should stop fundraising immediately! It’s an even easier way to test your resolve.
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