At Start Co. many founders need not raise capital to keep advancing their businesses. In fact that is the ideal. If they are looking for outside capital we try to not candy coat the reality of how hard it is to raise money. We instruct them that they will need to take 50 serious investor meetings with 50 different investors in order for them to have a chance at raising investment capital.
Why do some startups get funded? DocSend recently teamed up with Professor Tom Eisenmann from Harvard Business School to conduct research on the process of raising money. Their data verify our thinking. They sampled 200 Companies a subset of which successfully raised $360MM in Series Seed and Series A rounds. Take a look here to see the reality by the numbers:
- Average Number of Investors Contacted: 58
- Average Number of Investors Met: 40
- Average Raise: $1.3MM
- Average Number of Weeks Spent Fundraising: 12.5
- Average Length of Pitch Deck Sent: 19.2 Slides
- Average Time Spent by Investor Looking at the Deck: 3 minutes 44 Seconds
- Slides with the Most Time Spent by Investors: Team and then Competition
- Teams that didn’t raise any funds on average quit after 6.7 weeks
- When should you give up on Fundraising: a few months
The study and more details can by found here: http://www.slideshare.net/
Fundraising Research
Eric Mathews is CEO and Founder of Start Co. He can be reached at info@neverstop.co