Entrepreneur’s initial financing needs to cross many pits.

Alpha said: Financing is a big challenge for the founders of the first venture, especially in an environment where investment institutions are more cautious. Preethi Kasireddy is the founder and CEO of TruStory. She sums up her experience in the integration of angels and hopes to help other entrepreneurs with insufficient financing experience, from psychological preparation to finding investors and how to ensure financing.

When I built my own company, TruStory, I was fortunate enough to get $3 million in angel financing, which allowed me to focus my time and energy on improving entrepreneurial ideas and product development.

Investment agencies are becoming more cautious, how does this startup have a $3 million angel financing?

In this round of financing, I actually encountered a lot of difficulties, but also accumulated real financing experience. I am very grateful to the people who helped me in the financing process. When I found a useful financing methodology on the Internet that was not really systematic (these experiences and methods were privately circulated), I wanted to sort out my own financing experience as the founder of the first venture to help more entrepreneurs Angels go better when they turn round.

Financing is difficult, prepare for pain

Unless you are a well-known person in the industry, such as an executive at a giant or a unicorn, financing would be difficult. You will encounter a lot of painful negation. Some of these denials are straightforward, while others are relatively euphemistic. It may be “Let us stay in touch” after a meeting, and then after a series of seemingly promising meetings, No follow-up.

These negasures are likely to be your burden and can make you feel stressed, anxious, and even insomnia. What’s more, they will make you doubt yourself and wonder if you can do it well, and your thoughts and directions are not correct.

In fact, you are prepared to prepare yourself for the difficulties and setbacks on the road to financing. When some investors challenge your entrepreneurial ideas, don’t be too frustrated. After the meeting is over, don’t leave your emotions for too long. Focus time on your core ideas and long-term vision. The more you think about yourself, the more transparent you understand, the more you will be able to infect investors and the results will be smooth.

Don’t be afraid to be said NO

As mentioned earlier, financing is a difficult process, and you may experience many rejections and denials. For example, in the financing process, your entrepreneurial ideas will be criticized, challenged and evenNegative, some investors hope that you will give up this idea and look for directions. I have experienced this and I have had some shakes. But then I understood that some people questioned your thoughts as normal, because in the angel round, they were not verified.

I deal with this: in the face of doubt and criticism, I will remember the other side’s doubts without the subjective feelings, find out the rational part, remove the unreasonable part, and then see if I want to Based on this, improve your own ideas. In addition, you can also reflect on whether you have not communicated your ideas well and optimized your expressions again and again.

In addition, it is important to find your first Yes. The interpersonal network between investors is not that big. If you have been said No by several investors in a row, then you will be rejected more times in a while, but once you get a Yes, you will probably get more. Yes. Therefore, we must pay attention to the power of “signal transmission”, carefully select the target investors, and prepare for each meeting.

Select a specific partner rather than an investment institution

After being mentally prepared, it is very important to choose the right investor. Getting money from a well-known venture capital firm can really provide you with an endorsement, but you have to realize that dealing with you more and providing more help is more than a specific partner rather than an institution.

I have seen a lot of examples. Some entrepreneurs in the circle have received investment from relatively mediocre partners in top institutions. They can help entrepreneurs in addition to money. Instead, I also saw the outstanding partners of several lesser-known investment institutions helping entrepreneurs weather the storm.

In short, entrepreneurs should find an investor who deserves your respect and confidence in you, not an investor who is not confident enough about you and who does not have the ability to help you.

Study your investors

The vast majority of investors will conduct “due diligence” on entrepreneurs, and I have experienced them. Some parts are talking to you positively, while others are objective investigations that won’t even let you know.

Entrepreneurs should also conduct research and investigations on their potential investors and make rational judgments. In my financing experience, I also learned a lot from the research on investors. Some investors, after I did the research, had a subversive impression on them, and therefore avoided a lot of pits. It was also after investigation that I decided to invest in my investors.

How do entrepreneurs conduct “due diligence”? In addition to collecting investors’ public investment cases, various statements and investment ideas, the real voice is to directly establish contact with the founders who have invested in this investor and ask them to cooperate with this investor. Experience, how they provide help, and what value they bring; also don’t forget to ask what is the investor’s handling when things don’t go well?

The purpose of the investigation,In addition to understanding the advantages of investors, it is more important to understand the shortcomings, because these are the places that may actually go wrong when you get along with them. Ask them in great detail and use your own judgment to see the problem.

Set the time limit for financing

Although financing is not so easy in the current environment, don’t drag the financing time too long. Because the initial time of the venture is very valuable to the entrepreneur, if the time spent on financing is too long, then your product will be difficult to build, and you can’t put it on the market to verify it, or even miss some key time windows.

Another key role in setting time limits is to give investors a more pressing expectation. Without this time limit, investors will not feel nervous and will not make important decisions. Finally, your meeting with this investor becomes a waste of time. If you have a more accurate time limit, investors can more easily enter the serious mode, you will exchange more valuable information, if he has confidence in your project, it will push your financing to the next stage. Without this time limit, without providing enough high-value information, investors will not pull the trigger and write the check.

Learn to communicate with investors

Each investor’s differences in investment philosophy, professional experience and interest orientation will make them different in your perception of your project. Different investors have different depths of digging in various factors (eg, marketing strategies, products, competitors, etc.).

So, to meet with every investor, you should be targeted. This is not to say that you have to develop a different plan every time, but to keep the 3-5 core introductions unchanged, according to the characteristics of each investor (you should study at the same time when you choose the target investor) Their characteristics), make some targeted adjustments. And be sure to form a dialogue with the investor, not your unilateral display, gain investor feedback in the process, and attract him to learn more about your project, and your chances of getting his investment will rise. .

Seeking a direct meeting with a partner

As a founder of a first venture, it is more difficult to meet directly with an investment partner (with a few exceptions). You will first come into contact with the regular colleagues of the investment institution. They usually do not have the power to write checks. Sometimes they may delay your financing process. What’s worse, you will end the process before you see a partner with decision-making power.

But you should still take it seriously, because at this time they are the bridge between you and your partner. You can learn about the interests and concerns of the partners in the meeting with them, so that when you meet with the partners, you can understand what should be focused on, and also let him advance to your company in front of the partner meeting. Have a preliminary understanding.

But since the decision-making power is a partner, you should first try to get a direct contact with the partner. And to getThis kind of opportunity needs to be integrated into your local entrepreneurial ecology and build enough quality contacts, which should be prepared before the official start-up.

The transaction is not over until the funds are deposited into your account

Inexperienced founders can easily make mistakes in this area. I have heard many such stories. The founder got some promises and thought that he had already secured the financing, but he returned empty-handed at the last minute. This kind of blow is quite large for early-stage startups, but it will disrupt the pace of entrepreneurship, and some entrepreneurial teams will split.

So in order not to let this happen to you, the entrepreneur must continue to follow up with the promised investors, until you get the TS, after the tune, the money hits your account.

What to do after getting the money, of course, is to run quickly, recruit the team, make products, and pull customers.

This article was compiled from Medium by Alpha Commune, the original author is entrepreneur Preethi Kasireddy. The original title “How does the social venture TruStory integrate into the $3 million angel financing”