Introduction

In the high-stakes world of startup fundraising, practice isn't just beneficial—it's essential. Given my background sitting on every side of the table from being an investor, to being a VC-backed founders and now an advisor to nearly a hundred fundraises, I've observed a critical factor that separates successful fundraisers from the rest: relentless practice.

This article delves into why and how practicing your pitch can make a monumental difference in your fundraising journey.

Understanding the Fundraising Practice Gap

The disparity in experience between first-time founders and seasoned investors is stark. Investors, like myself, engage in numerous funding rounds annually, while you'll probably only fundraise every two years. This gap underscores the need for founders to practice rigorously.

Reading about fundraising is just the starting point. Malcolm Gladwell's 10,000-hour rule for mastering a skill is particularly relevant here. While fundraising might not require as many hours, the principle of dedicated practice stands.

So what is the power of practice in fundraising?

Here's 4 points:

1. Building a Network Through Practice:

   • Personal Insight: Networking is an art honed through practice. Early in my career, I learned that effective networking wasn't about the quantity of connections, but the quality of interactions. If you focus on practicing early enough you can work on building your network in the right way, and not make mistakes too close to your fundraise.

2. Storytelling: A Skill Sharpened by Repetition:

   • Crafting a compelling narrative about your startup is crucial. Each practice session refines your story, making it more engaging and investor-friendly - it's about seeing how you speak about you and your opportunity and make sure you are being clear and concise.

3. Answering Tough Questions with Confidence:

   • Practice helps you anticipate and confidently respond to investors' queries. I've seen well-practiced founders handle challenging questions with ease, leaving a lasting impression. I've also seen the opposite, where you can see a founder who hasn't done any preparation and misses the boat in everything they say.

4. Simulating the Launch Process:

   • Rehearsing your launch process can uncover potential pitfalls. It's akin to a dress rehearsal in theater, ensuring the actual performance runs smoothly.

Strategies for Effective Fundraising Practice

1. Embrace the Learning Curve:

   You have to be honest about the difficulty of learning how to fundraise properly new, especially when you are a first-time founders. It’s not an easy task, you have to think long-term and you lack the knowledge to know exactly what to focus on. It is important to expect mistakes and celebrate effort, but also you have to think about risk-taking, rather than solely focusing on expertise and skill level. You have to keep trying things and using data to iterate on what is work and what isn’t.

   Don’t just think you have your narrative sold for example. Try different ways you speak about your company, or you as a founder.

   On your network, test different channels or ways in which you build your network. Don’t just download investors lists and think you are done - think about how you can research investors through social media like linkedin or other methods.

2. Schedule Regular Practice Sessions:

   One common mistake I've observed founders make during their fundraising efforts is procrastination. They simply don't put in the necessary work, and a significant factor behind this is the lack of dedicated practice. Fundraising preparation should not be done on an "ad-hoc" basis. It requires a commitment of time every week, preferably every day, for practice. Protect this time on your calendar and don't let anyone take it away from you. Fundraising is not an add-on to your company; it is a crucial element for your success, so you must allocate time to refine it.

   During practice sessions, minimize distractions and approach skill development with the same seriousness as any other project. The whole fundraising OS is about giving you the systems to learn fundraising, but also give you deadlines and projects to make sure you are actually doing the work.

3. Leverage Your Network for Mock Pitches:

   Fundraising should never be a solo-game for you. They say, “takes a village to fundraise”, and a key part of that is building a network of people who can help you practice and give you the right feedback you need to be better. Use your network to simulate pitching scenarios. Feedback from these sessions is invaluable for refining your approach and you can leverage the high volume recordings to see yourself speaking from the other side.

4. Engage with a Variety of Investors:

   You don’t want to practice with the top-tier investors too early. So you want to get your practice pitches in at the most a month before you “officially” launch. This is your chance to find out:

   1. What you need to improve on
   2. What the major questions of the round will be
   3. What the market thinks of you and your company
   This strategy helps you improve without risking your reputation with top-tier investors.

5. Consider Professional Coaching:

   Expert coaching can provide structured and objective feedback, accelerating your learning curve when it comes to fundraising.

Conclusion

As a venture capitalist and now as an advisor, I've witnessed the transformative power of practice in turning good fundraises into great ones.

Remember, in the world of startup funding, it's not just about what you say, but rather how your prepare to create a high perception about you and during meetings how you talk about your business.

Therefore, the path to successful fundraising is paved with diligent practice.