The Wise Men’s Gifts: Tips for Myrrh-rific Investor Relations

Embarking on the journey of launching a startup is no small feat. It involves passion, resilience, and a fair share of uncertainty. As a startup founder, you’re likely familiar with the emotional rollercoaster of seeking investment. As a startup founder, you need “yes men” in your life. Yes, to your funding ask. Yes, to your sales pitch. 

But sometimes, all you get is “wise men” – bringing advice instead of money. 

December is a time of celebration for many. For Christians, December is a celebration of the birth of Jesus. In the nativity story, three Wise Men cam from the East came to Jerusalem bearing gifts for the new baby. 

Just like the three wise men brought three gifts for baby Jesus, here are three gifts for planning your first fundraise- some tips to help you find your way to startup salvation. 

The Gift of Gold 

Raising money takes work- and it can be a frustrating process. One way to remove some of the frustrations of this process is to fundraise efficiently by considering it as a sales process. 

Build a list of potential investors – build your “sales funnel.” Raising capital is a “numbers game,” you will have to reach out and pitch to a meaningful number of investors at the top of your funnel to end up with a handful of checks dropping out of the bottom. Jeff Bezos famously pitched over 60 investors to raise Amazon’s first $1 million. This dynamic holds for later rounds as well. 

As you work on your list — and later, as you start pitching — the complexity of keeping track of all the names, conversations, follow-ups, and to-do items will grow exponentially. Keep track of your funnel with an Excel sheet or even look into a simple CRM system. 

You will need a plan to manage your fundraising process. You want to avoid ending up in a barn because all the inns were booked. 

The Gift of Frankincense  

Another frustrating experience in your fundraising journey is being ghosted by an investor – the sudden radio silence that leaves you questioning and anxious. Perhaps they took a left at the Star of Bethlehem instead of a right! 

First of all, don’t take it personally. Before jumping to conclusions or succumbing to frustration, it’s essential to understand that investors may have valid reasons for their silence. Investors, like founders, face busy schedules and unforeseen circumstances. They might be dealing with internal challenges, portfolio management, or other unexpected commitments that temporarily shift their focus away from potential investments. 

Some coping mechanisms when an investor ghosts you: 

• Stay calm and be patient 
• Reflect on your pitch 
• Seek feedback, if appropriate 
• Diversify your investor pool 
• Have founder friends to commiserate with 

You can refer to this post about “How to Handling Ghosting as an Angel Investor,” as much of that advice applies here, too. 

Every interaction with investors is a learning opportunity. Use this experience to refine your approach, understand investor expectations better, and tailor your pitches accordingly. 

The Gift of Myrrh 

Honesty is the best policy- with yourself and any potential investors.  

As a founder, you need to be honest with yourself. Founders want to project an image of strength and reliability and may feel that asking for advice can undermine that purpose. Angel Investors understand that this is the early stages of your business, and they are excited to help you get to the next step. And as a founder, you should expect your investors to add value ( or gold… or frankincense…or…). Ask for help and see what doors they can open for you. 

Best honest with your potential investors. Things come out in the due diligence process. It’s tempting to share only the best possible version of the future to persuade investors, but honest communication is essential to building trust with your investors. Don’t try to hide negative aspects of your business- instead, be prepared with a strategic plan to rectify the problem. 

Hopefully, these tips are as good as gold, frankincense, and myrrh and helpful in your fundraising journey. 

No matter what you celebrate this time of year, we wish you a very happy holiday season and much success in 2024!