I’m a founder in her fifties with lively presentation skills and a colourful, solid professional background including some excellent brands.
When it comes to fundraising for my online (hugely scaleable) start-up, I sense an (unfounded) expectation that I have unlimited amounts of my own money to invest, and/or contacts to tap very easily for funding.
Potential investors of a similar age/stage/experience seem to recognise that I have a red-hot game-changing idea, that I’m in for the long haul, have made outstanding boot-strapping progress and have broad management experience as well as good leadership qualities, yet I’m not getting the “Wow, let me put some rocket fuel into the tanks and help get this baby stratospheric!”
Does this perception exist, perhaps unwittingly, among investors? Is there such as thing as coming across as too un-needy?
I think there are two separate parts to this: how much investors expect you to invest from your own pocket, and how much they expect you to bring in from your own contacts.
You can deal with the first by being frank with your investors about what your assets are, and what your income is. When you have significant responsibilities, liabilities or dependants, serious investors won’t expect you to stump up money you don’t have or go hungry in order to do the startup. If you’ve had a calm and non-confrontational conversation with your potential investors, and that’s what they are indeed asking for, then you have the wrong investors. I’ve written an article on qualifying your investors, and this may help.
On the second issue, it’s a reasonable piece of due diligence for investors to ask whether you’ve been able to persuade anybody you know personally from your prior career to put money into your startup. That depends partly on your prior job history: the more you’ve had colleagues, managers, clients or suppliers who are personally rich, the more opportunities you have to persuade those people to express their belief in you by making an investment in your startup. If there are lots of those people, but none of them will give you a dime, then that’s a useful (but sadly negative) data point for other investors who don’t know so much about your prior history.
Both cases are an instance of the general point: investors are trying to make their best forecast of how effective you’ll be as a CEO. People who have known you a long time have an advantage in this, and people who just met you have good reason for observing their behaviour in coming to their own decision.