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Tip For Startups: Build A Relationship With Your Investor Long Before You Will Have To Ask For Money

Danielle Morrill is really cool! Named by the Forbes ’30 Under 30′ for Social/Mobile Technology in 2011, she has over 10 years of entrepreneurial experience at Y-Combinator, Twilio, and Seattle 2.0. Currently Danielle is the CEO of Mattermark, a platform which is basically Bloomberg for Startup Investors. Mattermark  provides signals and reports for investors on startup opportunities out there.

As Danielle said herself, “Most startups don’t know what kind of traction they have. With Mattermark I can find out whether your startup has traction or not without your help”.During her interview at the Lean Startup Circle meetup, Danielle raised a curtain for us on collecting funds and, what’s more important, on building relationships with potential investors. Here are a couple of things I picked up.

Where to begin?

Finding an investor is kind of like dating. You look for prospects, make a move and hope not to be rejected. There is no hard sales or pitching here. You can build a relationship on some common interests. Get to know people, use your soft skills. That’s the way to go. Build a RELATIONSHIP long before you will have to ask for money. Then when the moment comes, you’ll have someone to talk to.

How to choose an investor?

Anchor investor is the MOST important person in the history of your company. He not only gives you the money, but he gives you confidence. When you walk in the room, people feel that you’ve got money in the bank :) Don’t pick someone super famous or rich. Pick a person you truly admire, someone who has built something, someone who will care.

Party round vs individual investors?

Be careful with party rounds. Chances are that with many investors coming in at the same time, nobody will really care enough to find a unique part of the company they could help. You have to make them CARE about your company. Do thorough research of the firms. Seek for partners who would be both interested in and useful for your company.

Finally, do investors really want to give out money?

Sure. People love helping. We all want to be a part of history.

You can and you should follow Danielle at @DanielleMorrill and start building the relationship with your investors today!

June 21, 2013

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