3 Tips for Raising Venture Capital Funding


Every upstart wants to know how they can raise money for their venture. Johnson offers three tips for catching the attention of VCs and gaining monetary support:

There is strength in numbers. At the seed stage, angel investors focus a great deal on your team. “[Investors] are betting on your ability to execute and succeed against the odds, as most startups will inevitably fail,” explains Johnson.

Have a great product. “A common phrase in the area is ‘code wins arguments,’” says the startup’s co-founder. “Having an amazing product–a truly amazing product–will get you attention. Build something people love, and you’ll become attractive really fast.”

Show your social proof. Demonstrate social proof before approaching investors is critical. Having lots of users is great, but having lots of revenue is even better. “Lean Startup guru, Eric Ries, is one of SendHub’s investors/advisors now, but told us ‘no’ months ago because we didn’t have the ‘social proof,’ says Johnson. “We explained our ideas and assumptions. He simply replied, ‘That’s great, but I don’t believe you. Show me some numbers.’”

— Terrance Gaines


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