Big Red Car here. Yesterday, I had a chat with an entrepreneur who was getting ready to launch his fundraising campaign.
He’s smart, articulate, hard working, honest, and naive.
He said, “I’m having a hard time wrapping my head around the negativity associated with fundraising.”
To which the Big Red Car said, “Do tell.”
“Well, Big Red Car, you told me I needed to have a targeted data base of 200 potential angel investors. I got that.”
“So, brilliant CEO, what is the problem?”
Here is the problem:
1. Yes, you need a database of about 200 potential angel investors. No big revelation there.
2. Yes, only about 10% will indicate true interest. Even if you did go to Stanford. They are busy and get pitched a lot of deals.
3. Yes, only half of those 10% will meet with you with a checkbook in the room or offer a Term Sheet.
4. Yes, only half of that half will actually write you a check.
Here is another version of the same thing.
A. Two hundred — 200 — targeted angels begets 180 “NO”‘s.
B. Two hundred — 200 — targeted angels begets 20 interested parties.
C. Twenty — 20 — interested parties begets 10 parties who will reach for their checkbook and CONSIDER making an investment. Might even give you a Term Sheet.
D Five will actually invest.
And, that, my dear readers, is where all those “NO”‘s come from. To be successful, you have to deal with NO. You can do it.