019. Target Raise

Text your thoughts directly to Rich.

This is completely counterintuitive but the amount you're telling investors that you want to raise is too high. 

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech, logistics, and marketplace businesses. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $400k to $600k. You can learn more about us and our approach.   

About Rich Maloy
Rich's mission is to rebuild the American dream through entrepreneurship. He works with early stage startups transforming the world, giving all people the opportunity to grow, learn and earn. With prior careers in finance and sales, he's now focused on startups investing through SpringTime Ventures where he is a Managing Partner. He's a father of two young children and loves sci-fi, skiing, and video games.  

Episode Transcript

Rich (00:00):
So you need to raise enough money to level up on the
treadmill.
But what is the right amountthat you should raise?
There's really no specificanswer that I can give to you,
and I'm not dancing here.
You have to make thatcalculation based off the
information that we've alreadytalked about.
Here their runway, hitting yourmetrics, leveling up all of
that.

(00:21):
Here's the catch.
The amount you're tellinginvestors that you want to raise
is too high.
This is completelycounterintuitive, but you
actually want to set yourfundraising target slightly
lower than what you want to hit.
I need to pause here and givehomage to the Jedi Master of
fundraising advice.

(00:41):
David Cohen.
I heard David talk aboutfundraising six or seven years
ago, and it blew my mind.
Setting a lower fundraisingtarget is straight from his
playbook, and I think it's stillrelevant today.
Here's why.
If you told me you were raising2 million and had 750 K
committed.
You have 37% of the way there.

(01:02):
You still have 1.25 to raise andwith small checks that could
take awhile.
I've got plenty of time to sitat the edge of the pool and
watch the party build.
But if you told me you'reraising 1.5 million have 750 K
committed.
Wow.
You're halfway there.
I'm engaged in leaning in.
You may fill out that round.
And if I want to hit my targetcheck size, I need to move.

(01:23):
That pool might fill up and Ineed to make sure I'm in there.
This whole process of seed stagefundraising is about getting
investors to take action.
And one way to get investors totake action.
Is to create scarcity.
You can create scarcity bythreading the needle between the
right amount of runway, hittingthe right metrics and having the

(01:44):
right slightly lower targetraise amount.
And then.
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