A number of entrepreneurs have lamented to me how difficult it is to raise money for their startup. Now, they are trying to raise seed rounds of less than $1 million from angels and aren’t having much luck. Of course, the best time to raise money or get a bank loan is when you don’t need it, but that’s rarely the case for startups. One of the most important aspects of fundraising, and least discussed, is that of investors wanting to invest in and work with people they genuinely like — potential friends if not already friends.
Entrepreneurs would do well to read How to Win Friends and Influence People by Dale Carnegie at the start of their fundraising process (if not right away). The idea isn’t to be fake but rather to be genuinely interested in the person and the relationship, as that sets the foundation for everything going forward. Some of the most successful fundraisers are also the best at making friends.
Fundraising starts with friend making as investors want to invest in startups that have entrepreneurs they truly want to hang out with for many years. In addition to finding investors generically, entrepreneurs would do well to find investors that they enjoy being around and have complementary personalities.
What else? What are some other reasons fundraising starts with friend making for startups?