After Blank Label raisedÂ outside funding throughÂ a seed round of $1.1 million, I started getting emailsÂ asking me how we did it. The email senders would writeÂ that they didnâ€™t attendÂ Harvard Business School or University of Pennsylvaniaâ€™s Wharton, and thatÂ they didnâ€™t have a big network with deep pockets.
For context, my co-founder dropped out of college, and Iâ€™m from inner-city New York. Having a large network isnâ€™t the most important part of raising money, and neither is your idea. The most important thing is traction (how far youâ€™ve comeÂ on your own), whether itâ€™s six weeks, six months or six years. As successful entrepreneur and angel investor Gabriel Weinberg states,Â â€śTraction trumps everything.â€ť
When my company first started thinking about raising money in 2013, we had tractionâ€“probably enough to successfully raise moneyâ€“but we didnâ€™t know how to do it. These are the steps we wish we knew then, and what we have learned as we raised our first $1 million and continue to grow.
Make Sure You Have Time for It
Before you start, realize itâ€™s a sales process. Like landing your first customers or your first hires, or even interviewing for a job, itâ€™s about building a wide funnel at the top and then converting your leads over time. At first, we thoughtÂ that we could email a few investors to see if they were interested in coffee, and theyâ€™d happily give us money over a latte. Make sure the business can still be a going concern as youÂ spend up to 50% of your time working on presentations, paperwork, traveling to meet investors, following up with investors, etc.
Danny Wong is an entrepreneur, marketer, and writer. He is the co-founder of Blank Label, an award-winning custom clothing company.
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