Funded

Chapter 14. The Top 10 Fundraising Hacks

Fundraising is a sales process, and like any other sales process, much more than the fundamentals of a business opportunity can play into investors’ decision making.

Fundraising is a bit of a zero-sum game. Investors have a limited amount of capital to give out; every dollar another company gets is a dollar that doesn’t go to you. While investors can choose to invest in multiple deals at a given time, you are effectively competing against the other entrepreneurs raising money—for attention, time, and ultimately capital.

While the fundraising process itself is quite straightforward—get introductions, pitch, try to get multiple offers, and then close—many founders implement hacks along the way to get investors to commit faster, to encourage competition, and to get better terms.

Knowing what hacks other entrepreneurs have used, and what effects, both positive and negative, they can have on a fundraise, will help you make an informed decision about whether to implement any of these tactics in your situation.

Here are the top 10 fundraising hacks—why they work, and when they backfire.

1. Set a Deadline to Create Urgency

A common fundraising hack is to set a close date—either an arbitrary date or a company milestone—for your fundraise and state it publicly. Creating this deadline will force investors to act, making them commit faster than they might have otherwise.

The danger in setting a public close date is that if you aren’t able to get ...