A few weeks ago, I had the pleasure of speaking with Samir Kaji on the Venture Unlocked podcast about various topics that venture capitalists think about on a daily basis. These topics included building a generational firm, the state of venture today, the psychology of decision making, and how to get LPs to become true believers.
One particular topic that stood out to me was the similarity between enterprise sales and venture fundraising. In both cases, there are three key questions that need to be answered: why buy anything, why buy me, and why buy now?
When it comes to fundraising, it’s important to focus on the mid and bottom funnel rather than spending too much time on top of funnel prospecting. Qualifying potential investors and finding those who are interested in your fund’s size and focus is crucial. Wasting time on conversations with the wrong investors can be detrimental.
To convince investors to choose your fund over others, you need to differentiate yourself. What makes your fund unique and complementary to their portfolio? For example, Upfront focuses on investing in Southern California firms, which sets them apart from other funds.
Creating a sense of urgency is also important in fundraising. Investors need to know that there’s a chance they could miss out if they don’t invest now. This can be achieved by showcasing consistent success and limited availability for future investments.
By addressing these three key questions and implementing effective strategies, venture capitalists can improve their fundraising efforts and increase their chances of success.
If you’re interested in learning more about these topics and our conversation, you can listen to the full podcast episode.
