Raising Money for your Startup? Stop Talking to Investors!

It was mid April and things with Kibin were cranking along nicely. Jim and I both had our heads down and were working like crazy to push the product forward. Unfortunately, keeping your head down doesn’t pay the bills or quiet your grumbling stomach.  I had decided we neede

d to raise some money.  It should be easy, right?  Hell, I remembered back when I had time to read TechCrunch… it seemed 80% of their posts were about a company raising a round.

Turns out, its not easy. Turns out, when people tell you that raising money will always be a lot harder than you thought, they’re actually telling you the truth.So, I decided to start tapping into my “network” and see who I may know that knows someone.

Scrolling through my list of contacts on my iPhone definitely turned up some interesting ones: “Polish Balboa”, “Angela Vegas MGM”, “Bruise Buddy!!!”, and “Cowgirl Stephanie” just to name a few.  But as it turned out, I didn’t have much of a valuable network when one wishes to raise some cash for a new venture. It didn’t take me long to have the epiphany that I needed to start networking.  The idea of it had always been repulsive to me.  In my mind, the word translated to sucking up to people, making small talk, and sitting around listening to people talk at length about their favorite topic: themselves. But, I realized this as a necessary evil and got to work.

Its easy to be a professional networker in the bay area’s startup scene. With multiple events every night, planning your days is much akin to planning a rainy Saturday movie hopping extravaganza. I got busy. I started meeting some interesting people, and even some important ones.  I practiced my elevator pitch and literally pitched an investor in an elevator at one point. I was 100% focused on meeting investors and trying to get them interested in Kibin.  I was 100% wrong in doing this.

I don’t know what the catalyst was, but something clicked.  It was April 16th, 2011 and I was headed down to the Stanford campus from San Francisco; driving my buddy’s decade plus old BMW with a missing radio and busted out window.  It made for a cold ride.

It was an EduTech mixer at the Design School.  A few education incubators were present with their most prominent pupils, showcasing them to a crowd of about 300 investors, entrepreneurs, and educators.  But again, I was only interested in finding the investors.

After some presentations, we broke for mingling.  I made my way through the crowd with quick looks at people’s name tags and the sticker colors they wore. Yellow, red… red, red, yellow again were the only colors I kept seeing.  Blue was the color I wanted, designating the individual as an investor.  I couldn’t find any.  After about 45 minutes of wandering and being stopped for small talk by other over-eager entrepreneurs, I froze and realized how pathetic I was being. For whatever reason, it struck me that I was wasting my time.

I looked to my left and saw Jeff Evans of MindSnacks.  He had a designated area to showcase his company’s product as they were part of one of the incubator programs present.  I suddenly realized I had been playing the part of an enterprise salesman stepping foot into a high-rise, public company’s office building and declaring that I needed to speak with the CEO. 

At that moment, I realized I needed to be networking with Jeff.  He was just like me, not years ago, but months ago.  He’d already been through what I was just now starting to embark on.  Maybe he’d see the value in what I’m building, introduce us to people he knows and investors he’s worked with.  It seemed like a much more viable option, and speaking with Jeff was as easy as walking up to the table he was demoing at and saying hello.

I spent the rest of my time at the event attached at the hip to the MindSnacks table.  I said a couple intelligent things to Jeff to get his attention.  When I left, he’d agreed to meet up for lunch the coming week.

For the first time, I left a networking event realizing that I hadn’t wasted my time.  There were more than 300 people there that night and my network only grew by one.  But quality supersedes quantity and Jeff would later play a role in how Kibin got into 500 Startups. When I attend events now, I try to find the entrepreneurs in the room.  We’re the most accessible and you’ll be surprised at the ways you’ll find to help each other out.

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