I used to hate fundraising.

But I did it anyhow.

I knew it was a necessary evil to get to my goal, which was to start a business that no longer depended on capital.

I hated fundraising because it was hard. A lot of people told me "no, thank you".

Then one day I realized why a lot of people were telling me "no".

I was selling a bad product.

In my first startup company, StudySoup, I met with 250 investors while fundraising.

It was a grueling process.

I was 22 years old and didn't have a network, so I cold-emailed hundreds of people to talk about my business with them. I grit my teeth and pushed through. Eventually, I raised the money I needed to grow the business.

This is a good example of the "market was speaking" to me. But I wasn't listening.

I was inexperienced. The business model was mediocre. And there were issues in my strategy. Put simply, if I had pitched StudySoup to me today I would not invest.

When you are fundraising, you are selling a product. The product will help investors turn their investment into more money.

The investor will look at two main drivers to decide if you are likely to turn their money into more money 1) your team's experience and 2) the company business plan.

Imagine you're a miner, mining for gold.

If you have a small pick axe, you may still be able to mine for gold but it will take you a long time and a lot of work. If you have a large pick axe (or a jack hammer) you can make the work go by quickly.

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When I raised money for Enduring Ventures (my current company), I now had experience, a network, and a good business plan.

Most of the people we talked to decided to invest after a first call. The market was speaking. We were selling a good product.

This contrast in experience changed how I think about fundraising.

I've reframed my thinking around it.

As a capital allocator I no longer dread it. I see myself as a responsible conduit for capital.

I believe in my ability to make money for my investors. So I now relish the opportunity to share what we're doing with people who are looking for ways to build wealth for their families.

Fundraising no longer feels like I'm pushing a ball up hill.

It feels like I'm connecting the dots between people who want to invest, and our businesses.

You need to decide the following for yourself:

are you in a business that requires fundraising? If yes, are you selling a great product? If you're selling a great product, then you need to get comfortable raising capital.

Some challenges you may face:

• you're shy
• you have no experience
• you don't like to talking about yourself (this is a unique characteristic of Americans, my European friends struggle with this)
• you're not great at telling a story about the future of your company
• you hate rejection.

None of these things make fundraising impossible. You just need to resolve to work much harder. Remember our example above, you can still mine for gold with a small pick axe. It's just going to take much more effort, and that's ok too.

🔑 Turkey Growth

I enjoyed this post from Romeen Sheth. I think a lot about this when buying a company.

• Where in the company's growth cycle am I?
• Did the company achieve unsustainable growth before I bought it?

I never want to pay top price for a company that is at the top of its peak growth curve.

Here is a snippet of the post

Question From Reader #1: I’ve recently had really good growth in my business. But I can’t tell if it was because of me or because of something else. What I’m really concerned about is that I’m not seeing something around the corner - maybe this growth will fall away as quickly as it came to me. How would you think about this situation?

There’s a parable I love referencing when thinking about growth: The Thanksgiving Turkey.

The idea goes like this.

You can separate the growth of a Thanksgiving Turkey in 3 phases.

• Phase I (Strong Momentum): On Day 1, the Turkey is at a good starting point. It’s kept in a good environment and sanitized.
• Phase II (Steady Growth): On Day 1-999, the Turkey grows. It continues to be well fed over the subsequent year.
• Phase III (Surprise): On Day 1000, the Turkey dies. Humans have Thanksgiving to celebrate after all.

The lesson? Your intuition is correct. All growth is not created equal. In fact, some growth is a train wreck in the making and has been since Day 1. The more the Turkey grows, the closer it gets to its death.

Have a great week!

Sieva