TFF #010: Why you should prioritise your investors

Jan 26, 2023

Hey everyone, it’s been a while!

Last month I went back home to London to spend time with my family.

It had been 9 months since I’d seen them so I decided to take some time off during the holidays.

That 2 week break, turned into 5...

Not exactly what I wanted, but that's the beauty of life!

I am back now and ready to help as many of you as possible through this newsletter.

Looking forward to 2023 and beyond!

"Investors are not born equal"

The quote above is obvious when you think about it, but most founders I speak to don’t realise this simple fact.

Nor do they use this fact to their advantage.

There are reasons for why you should prioritise your investors.

And also some tactics on how you use this prioritisation.

Today I am going to speak about why you should prioritise your investors.

And next week I will show you the process of how to do this for your fundraise.

The investors will know when you are in the market

The investing world is filled with the haves and have-nots.

The haves are the large, established funds who see every deal.

The have-nots are newer, less-established funds. They do not see every deal and lack the reputation in the industry.

Not only this, but investors like to talk to each other.

And the "have-nots" especially like to talk about the companies they are seeing.

Both the ones they are excited by and the ones that they rejected.

Because of this, investors will know when you are in the market.

And they will know which investors have rejected you or not.

You have to make sure investors don’t know that:

  • You have been in the market for a long time

  • Bad investors have rejected you

  • Lots of investors have already rejected you

Investors invest due to fund hierarchy

The newer funds are always trying to co-invest with the larger established funds.

This is because it increases their brand and credibility. Which gives them a higher chance they will raise their next round.

Because of this, a term-sheet from a tier-1 or tier-2 fund is like gold dust. It will completely change your conversations with other investors.

I saw this all the time working at Octopus, a tier-1 established fund in the EU.

We would be talking to founders who were having conversations with different funds.

As soon as the other investors found out that we were giving this founder a term sheet and we were leading the round:

They instantly invested into the company.

The founder went from worrying about how they were going to get the rest of the funding.

To having an oversubscribed round from a single email and less than 24hours!

You can launch your fundraise with the right process

At the end of the day, fund-raising is a sales & marketing process in which the buyer is a VC and the product is equity in your company.

Any great sales & marketing campaign begins with methodical planning and any great process is run with rigorous time allocation on the most important prospects.

Once you prioritise your investors you are able to plan and allocate time in the right way.

Tune in next week where I will show you how to prioritise investors.

As well as how to launch your fundraise with the prioritisation in mind.

Want to learn more from me? Check out how we can work together👇 

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