Do More Faster India, 2nd Edition

Chapter 62Practice Like You Play

Alex White

Alex cofounded and was CEO of Next Big Sound, a company that provides online music analytics and insights to over 750,000 artists and bands with 30 million songs. Next Big Sound raised about $1 million from Foundry Group, Alsop-Louie Partners, and Uncork Capital after completing Techstars in 2009. The company was acquired by Pandora in 2015.

Raising money from investors was unlike anything else I’d ever done in my life. When I tried my hardest in school, previous jobs, and extracurricular activities, I had a sense that if I exceeded some threshold I’d be able to get the A, promotion, or leadership position I wanted. When raising the first round of financing for my company, I could give the best presentation in the world, but if the investor was uncomfortable with any part of the team, idea, revenue model, competition, industry, market size, amount of money we were asking for, our development time line, how it fit with their portfolio companies, or an almost infinite list of other variables, then the funding wouldn’t happen.

With so many factors at play, numerous issues can derail a financing. The trick is to present a compelling solution to a big problem and then have the right answers to every conceivable question the potential investor might ask. For me, the first part is the easy one since most entrepreneurs wouldn’t be pouring their hearts into a business if they didn’t think they had a great answer to a big problem. The trouble ...