By: Olivia Koenig

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In any small business journey, securing startup funding  can deliver thrilling highs and devastating lows.  Any member of an early-stage team can attest that fundraising entails an all-out effort, one that tends to draw on all stakeholder resources.  In some circumstances, however, CEOs will excuse themselves from this crucial endeavor, opting to focus on other responsibilities.  This is a fatal mistake that wastes times and stymies progress.  In this post, we discuss several factors that necessitate founder involvement–and leadership–in fundraising.

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One common misconception about founders and CEOs posits that they are born sellers, presenters, or raconteurs.  In reality, these individuals tend to have one characteristic in common: extreme engagement with (and focus on) their concept.  Unicorn startup founder Melanie Perkins worked as a graphic design software tutor for her own college classmates as a teenager; a young Elon Musk was so fixated on coding his first web venture that he slept in his office at night; Shark Tank entrepreneur Daymond John personally sewed the first articles of clothing he ever sold.  Raising capital was hardly a primary fixation for any of them.  However, each still personally led efforts to do so–and the results speak for themselves.  The success stories behind Perkins’ Canva, Musk’s Paypal, and John’s Fubu all hinge on a founder who personally fundraised.

Maybe you’re a technical expert in a field no one understands, or a fêted business pro who excels in strategizing behind the scenes.  You could even have reached a level of visibility that lends immense credibility to your concept.  Regardless, if your title is “founder”, consider fundraising your top priority. Many founders try to avoid the spotlight or feel less than comfortable networking; you don't have to be an innate performer to effectively pitch. All that's required is the authentic connection any creator has with their creation.

Here, we summarize several rationales behind taking charge of fundraising.

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No one can sell your startup like you.

Founders set the objectives, pace, and tone of an entire organization.  They are, in essence, the concept’s birth parent.  While loyal employee support is an asset to any CEO, the people you pay can’t convey your product/service’s utility as well as you.  After all, an idea’s original patron is the person who conceived it.  Remember the genesis of your startuip: in a world without your concept, you envisioned a reality with it. This experience renders founders utterly invaluable when it comes to inspiring this identical vision in investors.  Playboy Enterprises CEO Christie Hefner said it well: “Being a CEO still means sitting across the table from big institutional investors, and showing your leadership and having them believe in you.” 

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Investors are looking for a long-term relationship.  Give it to them.

It’s not unheard of for startup teams to delegate fundraising to members of the sales, marketing, social media, and PR teams.  Avoid this mistake at all costs.  First, potential investors are never heartened by your absence as a founder.  Think about it: how would you feel handing over checks to an employee whose boss was absent?  Furthermore, “sharks” at all levels seek out fruitful relationships that age well.  While an investor’s interaction with your employee does not preclude a lasting relationship, the startup ecosystem is primarily fueled by symbiosis between founders and funders; not funders and staff.  Investors want connections with multiple yields, ranging from future networking to an ongoing pipeline of lucrative opportunities.  Many of these individuals pride themselves on their ability to seek out founder talent; if they want to meet you and interact face-to-face, take it as a compliment (and take the meeting).

Lastly, funders often thrive on being needed for more than their money.  In cultivating a face-to-face relationship, you encourage their tendency to offer various solutions on an ongoing basis. 

When you’re engaged in fundraising, you’re prepared for the next chapter.

A startup’s very definition is rooted in an intention to scale rapidly, and with that scale comes scope.  Your broad role as a founder and/or CEO is to oversee that transition–your performance will be judged by how well you perform in this regard.  As former PepsiCo CEO Indra Nooyi once explained, “[In the earlier stages of my role], I said, ‘Okay, I can do this – piece of cake.’ Then when you are the CEO, the responsibilities multiply enormously because you worry about everything.”  To her point, your responsibilities as a founder will inevitably diversify. The primary objective, however, remains: money.  Therefore, regardless of whether you’re leading a bootstrapped startup or a company on its way to "unicorndom", fundraising is the key to your performance as CEO.  Keeping these skills sharp; you are investing time in improving one of your most important skills as a startup leader.

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Time is of the essence.

This one is pretty straightforward; time is a massive factor in the context of raising capital, and the actual process of fundraising is a substantial time sink.  Many leaders fall into the trap of thinking quantity of pitches outweighs quality. Nothing could be farther from the truth.  It doesn’t matter how many meetings you schedule; if the presentation is lackluster, that meeting was nothing but a drain on your resources.  In committing to founder/CEO pitches, you decrease the amount of time spent pitching, and increase the success of the meetings you do take; a win-win for any team.  

In The Art of Startup Fundraising, Alejandro Cremades states, “Learning to embrace and savor rejection is one of the best things that entrepreneurs can do. Launching a startup is the time to find your ever-optimistic inner child again.”  Indeed, rejection is inherent to the process of raising capital. However, the pursuit of your organization’s sustenance holds potential to unlock your true essence as a founder.  Use fundraising as an opportunity to reinvigorate your own investment in–and excitement for–your startup’s future.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.